The following Environment guidance note provides comprehensive and up to date legal information covering:
For more information, see: Post-completion environmental issues (asset purchase)—checklist.
Legal due diligence reports and asset purchase agreements (APAs) will sometimes set out specific issues that need to be dealt with post completion.
Actions can include the following:
carrying out a baseline phase 2 environmental audit
undertaking a phase 1 compliance audit to rectify items raised during due diligence
preparing an asbestos management plan
addressing recommendations in a fire risk assessment or legionella report
The buyer will undertake these tasks having control of the property.
The APA can include mechanisms for the seller’s lawyers to have input in the post-completion work, such as:
agreeing the scope of work for any environmental audits
having access rights to complete certain works, and/or
for the seller to pay the costs incurred by the buyer
See Precedent: Environmental rectification work clause.
The key technical findings and recommendations may already have been incorporated in the legal due diligence report mentioned above.
Post-completion actions recommended by environmental reports can include a wide variety of issues, some of which may be more technical in nature, for example:
remove underground storage tanks
capex upgrades to septic tanks
improvements to bunding for above ground storage tanks
While the seller may have accepted responsibility for rectifying some of the environmental report recommendations in the APA post-completion, buyers will often decide to carry out other environment, health and safety (EHS) improvements post-completion at their own cost.
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