The importance of working with skilled and knowledgeable lawyers and environmental consultants when buying or selling commercial property and negotiating purchase agreements and access agreements was recently confirmed in a federal district court case from North Carolina entitled Metropolitan Group, Inc. v. Meridian Industries, Inc., case number 3:09-cv-440. The case demonstrates the pitfalls with asbestos inspections and the need to hammer out the details of access agreements should the parties’ future positions be adverse for whatever reason.
The seller, Meridian, operated a textile dying plant on property in North Carolina for a century before ceasing operations, transferring unused chemicals to another plant, and performing asbestos remediation on the property to prepare it for sale. The buyer, Metropolitan, purchased the property intending to demolish the buildings and construct residential units at the site. Less than a year after closing, Metropolitan’s demolition contractor ran into a retaining wall rupturing a fuel line at the site. The rupture resulted in an oil spill into an adjacent river for which the contractor was criminally charged and convicted. (His attempt to clean up the spilled oil with kitty litter was unsuccessful, and the contractor failed to notify the authorities of the spill leading to the prosecution.) As a result of the criminal investigation, chemicals and other hazardous materials were discovered behind a wall at the plant, the existence of which (according to the evidence) neither the buyer, the seller, nor their environmental experts were aware of prior to the demolition.
To learn more. please read Bill Wagner's recent blog post on Commonground.