Environmental Indemnification Agreement
(Pro-Lender) (CA)

Summary

This environmental indemnification agreement template is used in commercial real estate loan transactions in California where borrower and guarantor agree to indemnify lender for environmental issues related to the mortgaged property. This template includes practical guidance, drafting notes, and alternate and optional clauses. The California Environmental Protection Agency has been charged with promulgating and enforcing environmental laws in California. Additionally, various federal environmental protections have been adopted by the state of California in addition to the federal Comprehensive Environmental Response, Compensation, And Liability Act, 42 U.S.C. § 9601 (CERCLA) which impact the transfer and financing of real property. Counsel for all parties to this agreement should carefully review the nature of the property along with its past and present use to determine if any specific environmental concerns or conditions are present at the property that would require disclosure or remediation pursuant to any environmental law affecting the property. This template is drafted from the perspective of the lender but also contains drafting notes, and alternate and optional clauses, for borrower and guarantor. For additional guidance on drafting environmental indemnity agreements, see Guaranty and Indemnification Agreements in Acquisition Loan Transactions and for additional information on real estate financing transactions in California, Commercial Real Estate Financing Transactions (CA) and Commercial Real Estate Financing (CA). For additional information on environmental due diligence see Environmental Due Diligence in Real Estate Transactions.