Buying and Selling Environmentally Sensitive Properties

Contracts involving environmentally sensitive properties or businesses are not routine, normal transactions.  They usually carry much greater risk of loss for all parties.  Some transactions require the acquisition or transfer of permits.  Others require the seller and buyer to allocate liabilities for prior environmental contamination and cleanup.  In some cases, a prior environmental cleanup has imposed development restrictions on the property.  In all cases, each party should understand the risks, liabilities and opportunities involved.



It’s not as simple as obtaining a Phase 1 or Phase 2 Environmental Site Assessment that identifies “recognized environmental conditions.”  Those reports include many subjective decisions which can affect the stated conclusions, and parties can influence those decisions.  Whether you are obtaining an ESA or evaluating an ESA, parties need legal guidance to understand the report and its methods.

Other issues unique to environmentally sensitive properties or businesses include:

  • representations and warranties of property condition and the seller’s knowledge
  • insurance to cover environmental risk
  • indemnities
  • transferring permits or obtaining new permits
  • evaluating how the site’s history will affect the buyer’s TCEQ compliance history
  • evaluating whether any outstanding environmental fines or liens will affect the buyer

Parties to these transactions need an environmental lawyer experienced in real estate law.  Mark McPherson has practiced commercial real estate law for over twenty years.  He has the experience you need to draft and close contracts for the sale, purchase, and use of environmentally-affected properties or environmentally sensitive operations.


More and more, state and local laws restrict or otherwise affect construction and development plans.  Examples include rules limiting impervious cover, well spacing requirements, stormwater discharge management, and LEED standards.  Mr. McPherson has the experience to guide clients through the maze of regulations, helping developers and construction firms comply with environmental requirements while bearing in mind their effect on profitability.


A newer trend in Texas is for landowners to sever water rights from their land, either by reserving them in a sale, or transferring them separately. Consequently, buyers should no longer assume that water rights come with the land.  Documenting the severance of water rights is very different than documenting oil and gas severances.  Whether your issue is retaining water rights, buying water rights, or selling water rights, Mr. McPherson has the experience to assist clients in this rapidly developing area of law.



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