Contaminated Properties

Mon. Jul. 15, 2024

About Contaminated Properties

New Website Coming Soon

We are working on a new web site (L2G) that will be focused exclusively on Cherokee's efforts to rehabilitate environmentally impaired properties. This web site will offer information resources for contaminated property owners, mortgagees, and their host municipalities, enabling them to better understand the process of evaluation and recovery. If you would like to be notified when that web site is available, please send an webform mail from our Contact Us page.

Until then, we offer the information on this page as a summary of this topic as it relates to ways Cherokee can help you better understand and resolve your liabilities associated with polluted properties.

A contaminated property is one that is, or appears to be, environmentally polluted. In the context of this web page, we are not discussing naturally issues such as radon or indoor air pollution. While these are certainly pollution, they are generally mild and fairly easily abated. This web page deals primarily with contaminated commercial and industrial properties, and vacant land.

Cherokee has developed additional information on this web site on topics related to this web page:

  • We've provided information on how owners and occupants of residential properties can protect their families and tenants from the dangers of indoor air pollution.
  • Properties impaired by environmental contamination can create tremendous liabilities, sometimes even more than the properties are worth. Except under certain circumstances, such as when you can be declared an innocent landowner under CERCLA , once you enter the chain of title you may become personally and unconditionally liable for the remediation of the entire contamination. This is why institutions often write-off loans associated with contaminated properties, and why many investors will not buy tax liens or non-performing mortgages associated with these tainted properties.

Cherokee has experience resolving the complex issues associated with environmental contamination, including regulatory, engineering, liability and marketing. Determining the latent value, if any, of such properties, and orchestrating the many professionals who effectuate the recovery is a very specialized skill set.

Having the vision, focus, patience and resources to manage these long-term projects is as important as having the requisite funds.

For institutions that hold loans associated with contaminated properties, the FDIC (US Federal Deposit Insurance Corporation) has published this discussion regarding the negative effects of environmental contamination on real estate values.

The process of evaluating the history of a property to determine environmental conditions and assess the potential liability, whether you are considering buying, lending or foreclosing, is generally called due diligence or a Phase 1 assessment.

Under federal environmental laws, property owners may be held liable for contamination on or from their property. There are some carve out exceptions for innocent owners of nearby properties, innocent foreclosing lenders, and bona fide prospective purchasers, especially for Brownfields.

However this is a very complex, legally and technically, and parties must be exceptionally careful, following often arcane protocols in order to enjoy these limited protections from liability.

Cherokee is committed to improving the circumstances of people and places. This mandate includes cleaning up polluted properties, so that the health and welfare of the neighborhood is improved, and the surrounding property values are improved because they are no longer stigmatized by their proximity to an apparently dangerous property.

If you or a family member may inherit a polluted property in the future, we suggest you review our web page entitled Inheriting a Contaminated Property.

Cherokee is an opportunity real estate investor, which is sometimes otherwise termed vulture investing. We acquire distressed, non-performing assets, including real estate, mortgages and tax liens, and then restore them to productive use. This includes the acquisition of contaminated properties that we clean up and repair.

If you or someone you know owns a troubled piece of property, including contaminated properties, and are interested in exploring the possibility of having Cherokee help you shed the liability, please call our Acquisition Director, Jay Wolfkind, at (732) 741-2000. All discussions are completely confidential. Alternatively, you can send a webform email from our Contact Us page.