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Environmental Damage Sinks Most Property Sales

NEW YORK CITY-Increased governmental scrutiny and litigation fears are making environmentally damaged properties a tougher sell than ever. New Research released by Chubb Environmental Solutions says less than half of such deals ever make it to closing.

By Glen Thompson | Updated on October 25, 2002

NEW YORK CITY-When it comes to environmentally damaged property, it’s a buyers’ market, with most potential purchasers opting to turn tail and run, according to new research conducted by Boston’s CFO Research Services on behalf of locally based Chubb Environmental Solutions Inc.

According to the CFO survey, more than 33% of chief financial officers report that a business transaction has failed because of unresolved environmental issues. Among heavy manufacturers, 60% reported that they have had a deal fail because of environmental concerns.

The most common stumbling blocks include refusal, by either buyer or seller, to clean up contaminated property (59%), and failure to disclose contamination (29%). Inability to secure insurance scuttled deals in roughly 10% of the cases studied.

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