Dumping Ground

Seller Beware

If you're selling commercial property and have reason to suspect a toxic waste problem on the site, do you have to disclose the problem? That depends on your state since disclosure laws vary widely among states. In times past, the legal principle was caveat emptor, which means "let the buyer beware." It was the buyer's responsibility to inspect the property; if problems surfaced later, courts tended to rule that the buyer should have known better. Now, however, many states require sellers to disclose contamination if they know or should know about it.

If you suspect a problem, don't ignore it. You're better off investigating it and either getting it cleaned up before selling or telling the buyer about it to avoid unpleasant surprises for everyone.

If you discover a minor problem on your property, such as an old leaking fuel tank, check with your state's EPA to see if there's a fund that could help cover the cost of cleanup. Most states charge a small fee for intrastate and interstate shipments of fuel, putting the money into a fund for contaminated soil cleanup.

Toxic waste poses an enormous problem for our country. Some large companies are trying to help by knowingly buying abandoned industrial "brownfields" and committing the resources to rehabilitate them for future development for the good of the community. Until your business has the resources to do that, make sure you don't buy property with environmental problems that could put you out of business.

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This article was originally published in the January 1996 print edition of Entrepreneur with the headline: Dumping Ground.

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