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DUE DILIGENCE You wouldn't buy a building without checking
to make sure it was structurally sound and the roof didn't leak, so why would
you buy a property without checking its environmental condition?
It is important for a buyer to understand the environmental condition of
any property considered for acquisition to ensure that all potential liabilities
are appreciated. To help the buyer, the American Society of
Testing Materials (ASTM) has developed a standard for a Phase I Environmental
Site Assessment (ESA). This standard
was developed to help satisfy one of the requirements to qualify for the
“innocent landowner defense” to Superfund liability.
Without this protection, purchasers of real estate with environmental
problems are much more liable to be held accountable for cleaning up
environmental contamination, even if the contamination is the result of some
operation or practice at the site which occurred long before the current owner
acquired the site. The Phase I ESA is a “non-intrusive”
assessment of the environmental history of a property, and includes the
following basic components: · Site
history review using interviews and historical documents · Regulatory
status, as determined from EPA and other agency files · Visual reconnaissance to assess potential environmental issues · Interviews
of persons with knowledge of the site history The ASTM standard provides specific requirements for the files and materials to be reviewed and methods to be followed. Some financial institutions require additional steps to be
followed, or data to be gathered. Regardless
of the requirements, ECL is capable of providing this
service. ECL’s Phase I ESA reports
include color photographs, copies of all pertinent data, and scaled drawings of
the site. With over 15 years
experience in the environmental consulting field, ECL is familiar with the
conditions and operations which might cause environmental impairment at a
property. And, if the Phase I ESA
suggests that additional investigation is warranted, ECL will work with the
buyer to assess the costs and benefits of performing more work.
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