USA – LOUISIANA Law and Practice Contributed by: Jeffrey P. Good, Susan M. Tyler and B. Trevor Wilson, Jones Walker LLP
necessary – for example, if the Phase I environ - mental report indicates a potential site condition such as a recognised environmental condition (REC). Zoning diligence and real estate apprais - al are also completed during the due diligence period. Increasingly, buyers are conducting property resilience assessments to evaluate climate- related risks, particularly for properties in coast - al areas or flood zones, and reviews of digital infrastructure capabilities, reflecting the growing importance of technology in commercial proper - ties. 2.5 Typical Representations and Warranties Unless there are unique circumstances, most commercial properties are sold with limited rep - resentations or expressed or implied warranties, other than the typical authorisation representa - tions of selling entities. As a default rule, Louisiana law provides that the seller warrants title to the property. Lawyers representing a seller will often negotiate a more limited warranty of title so that the seller provides either a warranty against their own acts (referred to as a special warranty deed in other states) or no warranty of title whatsoever. In such circum - stances, the buyer will rely on a policy of title insurance in lieu of a seller’s limited warranty. Regarding the condition of the property, Louisi - ana law provides that the seller warrants the buy - er against “redhibitory” defects or vices which, generally, are defects that render the thing use - less or inconvenient (or diminish the property’s usefulness) such that prior knowledge would presume “that a buyer would not have bought the thing” . Depending on the defect, the buyer may have the right to rescind the sale or obtain
a price reduction. Defects known to the buyer (or which should have been discovered through inspection by “reasonably prudent buyer” ) are not covered. Almost all commercial sales include a waiver of such warranty of condition. 2.6 Important Areas of Law for Investors A foreign investor must consider federal, state and local income, franchise, sales/use, property and occupational licence taxes when acquiring real estate in Louisiana. Special considerations must also be made in relation to foreign notaries. Critical areas to understand include Louisiana’s civil law system, which differs significantly from common law jurisdictions throughout most of the United States, the state’s property tax struc - ture, and environmental regulations given Louisi - ana’s coastal location and industrial history. For coastal properties, investors should understand the coastal zone management programme and wetlands regulations. 2.7 Soil Pollution or Environmental Contamination Provided that a purchaser obtains “clean” Phase I environmental site assessment where no RECs are found to exist, and that such assessment is compliant with the American Society for Test - ing and Materials (ASTM) legal standards, the purchaser will be entitled to an “innocent land- owner” defence to clean up liability under federal (CERCLA 42 USC 9607(b)) and state law (Louisi - ana Revised Statutes 30:2271, et seq). “Innocent landowner” status means the owner has no legal obligation to clean up the property from offsite environmental conditions. If the owner later finds evidence of contamination, they are required to report to the Louisiana Department of Environ - mental Quality and allow that agency to access the property.
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