Reps & Warranties: Environmental Matters
Essential Question:
Do you or have you ever used materials that are subject to environmental regulation, or is there a similar threat posed by neighboring landowners?
In Brief:
Many “Have you ever?” and “Are you aware?” questions related to your use or knowledge of hazardous materials being used in or around the Business’s properties.
Information on compliance, claims, permits, CERCLA listings, investigations, claims, treatments and findings.
Category: Continued Diligence & Fact-Finding; Risk Allocation
What is it?
In effect, you’re making statements to create a timestamp after diligence related to the existence of environmental permits and reporting, potential issues from your own storage, treatment, and disposal of hazardous materials at current and former sites, and any potential issues posed by neighboring properties.
When does it matter?
This representation is highly dependent on business and industry (if you’re not using hazardous materials, these representations may be quite narrow in scope.
What to look out for?
Not only are you making representations about your current business location, but you are also attesting that you have not had any issues or violations for which the Business may be liable at previous business locations or work sites. As above, you can think about these as “Have you ever?” questions about any information related to current or previous releases, spills, etc., and “Are you aware?” questions about the existence of anything happening on or near the property, CERCA liability or superfund site status, PRP letters, etc. Also, be sure to indication if you’re ever received any communication from anyone alleging any actual or alleged violations – there’s a level of risk involved in ongoing potential liability or investigations.
