1. HOT ENVIRONMENTAL ISSUES IN REAL ESTATE AND DEVELOPMENT Peter E. Hapke Advocates Law Group www.advocateslg.com phapke@advocateslg.com 206-714-6444

2. Model Toxics Control Act (MTCA) Overview Codified at Chapter 70.105D RCW Strict, joint and several, retroactive Three year statute of limitations from Ecology approval of cleanup Status liability – owner, operator, generator, transporter Prevailing party attorneys’ fees Peter Hapke, Advocates Law Group

3. MTCA Sets Legal Agenda for Transactions Involving Contaminated Property or Assets Forces investigation and cleanup Forces parties to allocate environmental risk Provides hammer of cost recovery lawsuit Peter Hapke, Advocates Law Group

4. An Indemnity is Not a Release: A Cautionary Tale Seller indemnified Buyer for three years and cleaned up the property, but did not get a release of MTCA or other environmental liabilities Buyer discovered new contamination 15 years later when it began to develop property Buyer sends PLP letter to Seller for MTCA cost recovery Seller brought summary judgment asserting that Buyer has no statutory right under MTCA to recover from it Superior Court grants summary judgment in favor of Buyer and Division I affirms Peter Hapke, Advocates Law Group

5. Cleanup Approach May Impact Cost Recovery including Attorneys’ Fees Taliesen v. Razore (144 P.3 rd 1185 – 2006): Another cautionary tale Kaiser Shipyard cleanup: “must be ecologically necessary and economically efficient Peter Hapke, Advocates Law Group

6. As Seller do your own environmental investigation, even if Buyer does one Trust and Estate cautionary tale MTC – RCW 70.105D.020 (17)(iii) Trustee liability Trust and estate assets not protected Trust/estate beneficiary liability: MTCA is silent; CERCLA case law is persuasive authority Best course is to distribute trust/estate assets ASAP per applicable probate law Peter Hapke, Advocates Law Group

7. Seller’s Commercial Real Estate Disclosure of Environmental Conditions Chapter 64.06 RCW Buyer should specify time for Seller’s disclosure early in due diligence period Buyer can waive disclosure, unless “yes” on environmental checklist Buyer has right to rescind before closing Buyer has common law remedies if Seller was dishonest in disclosure Peter Hapke, Advocates Law Group

8. Residential Real Estate Disclosure of Environmental Conditions Chapter 64.06 RCW – Form 17 Similar analysis as commercial real estate rule Leaking underground heating oil tank is issue Grey v. Leach (244 P.3d 970 -- 2010) Court of Appeals essentially eliminates innocent owner and domestic use exemptions Broadmoor home cautionary tale Peter Hapke, Advocates Law Group