Contributed By McGuireWoods LLP
Similar to other States, lenders who take title to real property through foreclosure have potential liability as an owner of a property with environmental liability, or as a lender if they actively participate in the management of the property. Such liability under federal and Virginia law is subject to standard exemptions available to lenders. Most lenders will obtain an updated environmental review of the real property prior to taking title to the property by foreclosure. Most commercial loan documents require both borrower and guarantor to indemnify the lender for all environmental matters, and such indemnity survives both foreclosure or payment in full of the loan.