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Environmental Issues in Secured 
Transactions 
Daniel S. Schleck, Esq., P.E., CHMM, C.E.S. 
Halleland Habicht, P.A. 
33 South Sixth Street #3900 
Minneapolis, Minnesota 55402 
A Professional Association 
(612) 836-5500
A Professional Association 
OVERVIEW 
 Real Estate Issues 
 Operations 
 Contract Provisions 
 Pricing and Alternatives Risk 
Management
A Professional Association 
General Provisions 
 Attorney/Client Privilege 
 Scope Definition 
 Contingencies 
 Requirements of Lender
Real Property Evaluation 
1. Title Issue 
2. ASTM Due Diligence 
3. Non-ASTM Considerations 
4. New Federal Legislation 
A Professional Association
Title Issues in Environmental Due 
A Professional Association 
Diligence 
Leased vs. Owned 
Past Owner uses 
Seller’s Business
1527-00 is the Standard for Phase I 
Items included in Review: 
Property History 
Adjoining Property History and Use 
Review of Regulatory Databases 
On-site Review of Property 
A Professional Association 
ASTM Due Diligence
Non-ASTM Scope Considerations 
1. Asbestos Building Materials 
2. Lead Based Paint 
3. Wetlands 
4. Mold 
5. Radon 
6. Lead in Drinking Water 
A Professional Association
The Small Business Liability Relief 
and Brownfields Revitalization Act 
A Professional Association 
of 2002 
 New Standards for Phase Is 
 Clarification of the Innocent 
Landowner Defense 
 Exempt Bona-fide Purchasers from 
Liability 
 Definitions of Bona-fide Purchaser
What if an Issue Arises? 
 Conduct a Phase II Assessment 
1. Intrusive Soil and Groundwater 
Sampling 
2. More Expensive than a Phase I 
3. Should have plan for closure prior 
to initiation 
4. In Minnesota, seek protection of the 
MPCA Voluntary Investigation and 
Cleanup Program 
5. Insurance 
A Professional Association
Environmental Concerns in Business 
A Professional Association 
Acquisition 
1. Permitting 
A. NPDES – Wastewater 
B. Air 
C. Stormwater 
D. Noise 
E. Wetlands 
2. Permit Transfer 
3. State and Federal Reporting
A Professional Association 
Contract Provisions 
1. Asset Only Acquisition 
Continuing Business Enterprise 
2. Definition Section of Agreement 
3. Express Allocation of 
Environmental Liability 
4. Representation and Warranties
Pricing and Alternatives to Risk 
Management 
1. Price Adjustment 
2. Regulatory Protections 
3. Environmental Insurance 
A Professional Association
A Professional Association 
Regulatory Protections 
1. Voluntary Investigation and Cleanup Program 
A.No Association Letter 
B.Off-Site Source Determination Letter 
C.No Further Action Determination 
D.Certificate of Completion 
E. Proposed (Voluntary Party Certificate of 
Completion)
A Professional Association 
Environmental Insurance 
1. Cost Cap 
2. Third Party Liability 
3. On-Site and Off-Site Issues 
4. Specific Contaminant 
5. Change in Law

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Environmental Issues in Secured Transactions

  • 1. Environmental Issues in Secured Transactions Daniel S. Schleck, Esq., P.E., CHMM, C.E.S. Halleland Habicht, P.A. 33 South Sixth Street #3900 Minneapolis, Minnesota 55402 A Professional Association (612) 836-5500
  • 2. A Professional Association OVERVIEW  Real Estate Issues  Operations  Contract Provisions  Pricing and Alternatives Risk Management
  • 3. A Professional Association General Provisions  Attorney/Client Privilege  Scope Definition  Contingencies  Requirements of Lender
  • 4. Real Property Evaluation 1. Title Issue 2. ASTM Due Diligence 3. Non-ASTM Considerations 4. New Federal Legislation A Professional Association
  • 5. Title Issues in Environmental Due A Professional Association Diligence Leased vs. Owned Past Owner uses Seller’s Business
  • 6. 1527-00 is the Standard for Phase I Items included in Review: Property History Adjoining Property History and Use Review of Regulatory Databases On-site Review of Property A Professional Association ASTM Due Diligence
  • 7. Non-ASTM Scope Considerations 1. Asbestos Building Materials 2. Lead Based Paint 3. Wetlands 4. Mold 5. Radon 6. Lead in Drinking Water A Professional Association
  • 8. The Small Business Liability Relief and Brownfields Revitalization Act A Professional Association of 2002  New Standards for Phase Is  Clarification of the Innocent Landowner Defense  Exempt Bona-fide Purchasers from Liability  Definitions of Bona-fide Purchaser
  • 9. What if an Issue Arises?  Conduct a Phase II Assessment 1. Intrusive Soil and Groundwater Sampling 2. More Expensive than a Phase I 3. Should have plan for closure prior to initiation 4. In Minnesota, seek protection of the MPCA Voluntary Investigation and Cleanup Program 5. Insurance A Professional Association
  • 10. Environmental Concerns in Business A Professional Association Acquisition 1. Permitting A. NPDES – Wastewater B. Air C. Stormwater D. Noise E. Wetlands 2. Permit Transfer 3. State and Federal Reporting
  • 11. A Professional Association Contract Provisions 1. Asset Only Acquisition Continuing Business Enterprise 2. Definition Section of Agreement 3. Express Allocation of Environmental Liability 4. Representation and Warranties
  • 12. Pricing and Alternatives to Risk Management 1. Price Adjustment 2. Regulatory Protections 3. Environmental Insurance A Professional Association
  • 13. A Professional Association Regulatory Protections 1. Voluntary Investigation and Cleanup Program A.No Association Letter B.Off-Site Source Determination Letter C.No Further Action Determination D.Certificate of Completion E. Proposed (Voluntary Party Certificate of Completion)
  • 14. A Professional Association Environmental Insurance 1. Cost Cap 2. Third Party Liability 3. On-Site and Off-Site Issues 4. Specific Contaminant 5. Change in Law