An environmental restriction is a legal limitation on a property's use tied to environmental conditions or regulations, such as contamination, wetlands, or floodplain designation, that restricts development or specific activities on the property. Environmental restrictions can significantly affect a site's usability and should be identified during due diligence, often through a Phase I environmental site assessment.
Common types of environmental restrictions
| Restriction type | Impact on property use |
|---|---|
| Contamination/deed restriction | Limits certain activities or requires remediation before development |
| Wetlands designation | Restricts or prohibits development in designated wetland areas |
| Floodplain designation | May require flood-resistant construction or limit certain uses |
| Conservation easement | Permanently restricts development on all or part of the property |
What to watch for before committing
Deed and title review
Review the property's deed and title documentation for recorded environmental restrictions or easements.
Phase I ESA findings
Obtain and carefully review a Phase I environmental site assessment to identify potential contamination or environmental concerns.
Wetlands and floodplain mapping
Check federal and state wetlands and floodplain maps to confirm whether the property falls within restricted areas.
Impact on intended use and expansion
Confirm any identified environmental restrictions don't conflict with your intended use or future expansion plans.
Remediation responsibility and cost
If contamination is present, understand who bears remediation responsibility and cost under your lease or purchase agreement.
Insurance and liability implications
Consult with legal counsel about your potential liability exposure related to any environmental restrictions on the property.
When you need to know this
- Purchasing or leasing industrial property — identifying environmental restrictions that could limit use or require remediation
- Properties with historical industrial use — assessing contamination risk from past operations
- Sites near wetlands or floodplains — confirming development or use restrictions don't conflict with your plans
- Long-term site planning — understanding permanent environmental restrictions that could affect future expansion
Frequently asked questions
Ready to conduct thorough environmental due diligence?
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