Sonnenschein Nath & Rosenthal LLP

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Buildings and Structures

Virtually every piece of real estate, and particularly those with buildings or structures that house people or things, are subject to environmental controls - too often to the surprise of the owners and operators. Our clients include a number of significant real estate concerns in the U.S., as well as owners and operators of individual parcels. In other pages of this site, we address issues related to what may exist below a building (such as soil and contamination or underground tanks); here we focus on regulatory issues for the structure itself.

COMMERCIAL BUILDINGS AND RESIDENTIAL HOUSING ISSUES: LEAD, ASBESTOS, MOLD, RADON AND INDOOR AIR

Our attorneys have extensive experience in handling environmental issues arising from the construction, management, and disposition of commercial buildings and residential properties. Our practice includes regular counsel to clients on matters involving lead-based paint, asbestos, and indoor air quality, including mold and radon. Our clients include property managers, institutional investors, building owners and real estate developers.

Lead-based paint enforcement and litigation is national in scope and should be of concern to real estate owners, investors, and managers wherever their properties are located. We believe many passive owners, including syndicated investors and REITs, are unaware of the large potential liabilities presented by lead-based paint, which typically cannot be insured and can be difficult to avoid under private indemnification agreements.

On behalf of a large urban property manager, we recently concluded one of the largest settlements under the federal Residential Lead-Based Paint Hazards Reduction Act of 1992 and its implementing regulations. This federal law imposes civil and possibly criminal penalties, and creates a private right of action with triple damages awarded to the plaintiff, for failure to properly disclose and document the known presence of lead-based paint and/or lead-based paint hazards in connection with a residential lease or sales transaction. Federal authorities, working with state and local governments, have made aggressive use of this law to require the costly abatement of lead-based paint in older residential properties. The case involved a joint enforcement by six government agencies (the U.S. Department of Justice, the U.S. Department of Housing and Urban Development, the U.S. Environmental Protection Agency, the Illinois Attorney General's Office, the Cook County State's Attorney's Office, and the City of Chicago) and an initial demand for relief in excess of $10 million. Federal authorities have filed suit against other similarly situated urban management companies, seeking potentially millions of dollars in penalties and other relief, and in one case seeking the clean-up of dozens of properties directly against a management company's building owners.

While asbestos is no longer a "deal breaker" in most commercial transactions, there are numerous requirements under federal and state law which will apply in the event the asbestos is in poor condition, or if construction, renovation or demolition will take place. Our lawyers provide concise advice on the management, removal and notification requirements pertaining to asbestos.

EPA has concluded that indoor air quality (IAQ) is one of the five most significant environmental threats to human health. IAQ problems can occur in both commercial and residential settings; the underlying causes include the presence of radon or mold, and inadequate ventilation. Our environmental lawyers are skilled at conducting investigations of employee complaints, working with air quality experts to determine the cause of IAQ problems, and advising clients on legal issues such as disclosure, liability, corrective actions, and actions against third-parties who may be responsible.

Of course, many structures come with their own power sources, as well as stand-by or back-up power supplies. These facilities have their own sets of environmental requirements. We often assist clients in meeting those obligations and avoiding enforcement attention.

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EMERGENCY PLANNING, RESPONSE AND COMMUNITY RIGHT TO KNOW

Sonnenschein lawyers have a wide breadth of experience in advising clients on issues related to safety hazards posed by the storage and handling of toxic chemicals, namely emergency planning, emergency release notification, hazardous chemical storage reporting requirements and toxic chemical release inventory (TRI) reporting. Our clients call upon us to provide them with immediate and urgent advice in emergency situations involving federal, state and local reporting of chemical spills and releases, and for assistance in handling post-release inquiries and investigations by governmental entities. On behalf of a large domestic manufacturer of plumbing supplies, for example, we recently completed a comprehensive audit of its historic practices, resulting in recordkeeping and reporting.

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UNDERGROUND AND ABOVE-GROUND STORAGE TANKS

We are adept at providing assistance on issues related to Underground Storage Tanks (USTs) storing petroleum and hazardous substances, one of the most common environmental concerns in commercial transactions. Our projects have ranged from advising clients on requirements for UST operation and upgrades, removal and permitting, to the remediation and redevelopment of properties containing USTs. We have also assisted clients in obtaining reimbursement under various state “UST Fund” programs. Our lawyers are particularly skilled in UST corrective action, and the use of risk-based cleanup standards. We assisted in the remediation and redevelopment of a large municipal-owned property that had been significantly contaminated by historic petroleum USTs; we were able to obtain access to the state UST fund for a large part of the cost of the cleanup. The property was successfully developed into residential housing and retail stores.

For more information on Sonnenschein’s Real Estate Practice, click here.

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