Environmental issues are addressed in commercial leases in a number of ways. First, most leases will prohibit the Tenant from bringing any hazardous material on the property. Tenants who generate hazardous waste such as medical office Tenants will typically be required to hire a licensed contractor and dispose of such waste in accordance with all applicable laws and regulations. The lease will typically indemnify the Landlord for any environmental claims caused by Tenant.
In some cases, a Landlord will agree to indemnify the Tenant with respect to any pre-existing environmental conditions. In other cases, the Landlord will allow the Tenant to conduct its due diligence, but the Landlord will not make any representations or extend any indemnification regarding environmental matters.
For certain types of properties with manufacturing uses or gas stations, for example, the extent of the due diligence and the allocation of risk may require a more detailed discussion.
*Thank you for taking the time to read this article. This article is part of our “Commercial Leasing for Non-Lawyers,” a Blog Series on Commercial Leasing. Other aspects of commercial leasing transactions in New York are discussed in other Parts of this series.
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