Environmental Due Diligence is a Crucial Step
Nov 06
The first step is to hire a reputable environmental consulting firm and insist on careful inspection of any environmental issues that might be present in, on, or around the property. Typically, the bank providing the mortgage can recommend a consultant. The results of the due diligence investigation should be reviewed with the seller prior to the sale. If the investigation determines that contamination is likely, due diligence may be broadened to include soil and groundwater testing. The responsibility for the costs of any remediation work should be clearly stated in the agreement of sale.
The environmental firm should complete the following steps in order to gather as much information as possible about a property's past. By doing so, they will be able to get a better idea of potential environmental issues that should be more closely examined.
• Records on file with the local municipality and the DEP should be reviewed.
• Interviews with past and present owners, operators, and occupants of the facility should be conducted in order to determine previous uses of the property and how they may have changed over the years.
• Historical sources since the property was first developed - including chain of title, aerial photos, and land-use records - should all be reviewed.
• Federal, state, tribal, and local government records need to be reviewed to learn about any spills or releases that occurred on the property.
• Searches of recorded environmental liens against the facility that are filed under federal, state, or local law should be conducted to examine any unresolved issues.
In addition, visual inspections of the facility and adjoining properties should be conducted in order to learn about potential impacts from existing use and offsite sources that may contribute to environmental issues on the property. By adhering to state and federal procedures and making sure to complete your due diligence, you can usually protect yourself from environmental liability.
For example, Brennan Environmental, Inc. was retained by a potential property buyer to conduct a Phase I Environmental Site Assessment prior to the buyer's purchase. Through our research, we identified one problem area that would have cost the buyer approximately $50,000 to clean up. The buyer went back to the seller with this information and negotiated a lower selling price based upon this added expense. We were able to complete the remediation for well under the amount of $50,000 and the buyer ended up gaining money from the transaction. This is a key illustration of why it is so crucial to complete your environmental due diligence prior to closing on a commercial property.
John Brennan is the president of Brennan Environmental, Inc., an environmental consulting firm located in Summit, New Jersey. The company's growing roster of Northeast clients covers a broad range of law firms, real estate brokerages, as well as insurance, engineering and financial institutions. Visit the company's website at www.bei-env.com.
Project Announcements
AeroVironment Plans Salt Lake City, Utah, Manufacturing Operations
02/15/2025
Amazon Plans Salina, Kansas, Distribution Operations
02/15/2025
Loukus Technologies Expands Calumet, Michigan, Operations
02/15/2025
Great Lakes Sound & Vibration Expands Franklin Township, Michigan, Operations
02/15/2025
Taiwan-Based Syntec Precision Technology Plans Henderson, North Carolina, Operations
02/15/2025
Key Tronic Plans Springdale, Arkansas, Manufacturing-R&D Operations
02/15/2025
Most Read
-
2024's Leading Metro Locations: U.S. Cities on the Rise Amid an Economic Reshuffling
Q4 2024
-
The Workforce Factor: How States Are Competing to Build Tomorrow's Talent
Q4 2024
-
Best Practices in Incentives Procurement
Q4 2024
-
NEW NIMBYism: A Threat to The U.S. Economy
Q4 2024
-
Five Strategies to Tackle the Data Center Talent Shortage
Q4 2024
-
Microsoft-Three Mile Island Deal Could Signal Path for Nuclear Power to Strengthen Partnerships with Big Tech
Q4 2024
-
Industries Look for Employees in Nontraditional Spaces Amid Labor Shortage
Q4 2024