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A Better Partnership
October 08, 2010

COA Opinion: Defendant's failure to disclose environmental contamination rendered lease void

On October 7, 2010, the Michigan Court of Appeals published its per curiam opinion in 1031 Lapeer L.L.C. v. Rice, No. 290995 (originally released on August 5, 2010). In this case, the parties had entered into an agreement for plaintiffs to lease a gas station from defendant for a period of ten years. Defendant was aware that the gas station was a site of environmental contamination, making it a 'facility' under Part 201 of the Natural Resources and Environmental Protection Act ('NREPA'), MCL 324.20101, but he did not disclose that information to plaintiffs. Under NREPA, a person who has knowledge that his real property is a facility shall not transfer an interest in the property unless he provides written notice to the transferee that the property is a facility and discloses the general nature and extent of the contamination. MCL 324.20116(1). Because defendant violated this statute, the court held that the lease was void.

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