REITs
Liability Risks for Environmental Problems
DOI:
https://doi.org/10.1016/1057-0810(95)90040-3Abstract
Real estate investment trusts (REIT) investors and managers should take steps to protect themselves against class-action lawsuits involving properties with asbestos and lead-based paint contamination. The presence of asbestos and lead-based paint could significantly affect the value of properties. The cost of cleaning up affected properties could be greater than the actual value of the property. A prepurchase environmental assessment is an essential ingredient in negotiating the final cost of a building, letting the buyer know how much a cleanup will cost, if necessary. Massachusetts has adopted provisions that ensure the availability of liability insurance for owners of residential property. It remains to be seen if insurance companies in other states will remove environmental exclusions forproperty-casu- alty policies. Real Estate Finance Journal, Summer 1994, 10(l): 45-48. (Reprinted with permission of ABV/Inform, Copyright UMI.)
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