Reducing Environmental Risk

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All Required Permits

Although the possession of and compliance with all necessary permits is important information for a buyer expecting to continue a business or a lender depending on the viability of a business, representations regarding permits do not necessarily cover potential liabilities for remediation or third party damages.

Although the possession of and compliance with all necessary permits is important information for a buyer expecting to continue a business or a lender depending on the viability of a business, representations regarding permits do not necessarily cover potential liabilities for remediation or third party damages.

1. A typical provision provides: “Seller has all permits, licenses, authorization, orders or approvals of, and any required registrations with, any Governmental Authority, that are material to the conduct of the business of seller, including, without limitations, all permits relating to compliance with Environmental requirements. All such permits are listed in schedule x.x and are in full force and effect. No material violations have been recorded in respect to any such permit.”

2. Buyer may want an additional representation that there has been no change in facts or circumstances assumed in the application for the permits, as environmental permits are generally based on the application on the application and incorporate the statements and assumption in the application as part of the permit. If those facts change, the permit may no longer be valid.

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