Environment admin on 15 Nov 2007
Environmental Assessment For The Real Estate Investor
by Anton Brule
Whether you are planning to invest in or develop a real estate holding, one of the most important studies that you are advised to carry out, is an environmental assessment. Due to the passing of the Superfund act in 1980, all landowners are financially responsible for the cleaning up of any contamination on their land, even if they were not originally responsible for the contamination in the first place.
As a legal defense against this liability, potential landowners are able to carry out environmental site assessments. This allows any landowner to make use of the ‘innocent landowner’ defense should they ever become involved in legal action. The first stage of this inquiry is known as the phase 1 esa report. The phase 1 esa report is used to identify future and current environmental contamination liabilities.
This first stage of an environmental assessment does not involve the collection of actual chemical samples but simply performs an inventory of both the existing environment and existing man-made structures. This is achieved through the use of aerial photography, title searches, and inspection of fire insurance maps. This survey may also include adjacent properties in order to determine whether any contamination may already have occurred.
Through the collection of this data, it becomes possible to determine whether soil contamination has already occurred along, while also gaining an understanding of the local groundwater and surface water dynamics and how the existing wildlife makes use of this water. All of this information will be essential for the later stages of the environmental assessment.
From the analysis of this information it is also possible to determine whether there is any liability from materials used to construct buildings, chemicals stored on site or from the current indoor air quality. One such example of this type of liability is the removal of Asbestos used for the insulation of walls and roof spaces.
Once the first phase of the study has been completed, any potential purchasers can moved to the second phase of the study. This will take chemical samples of soil and water to validate the conclusions from the first study. At this point in time any potential land purchaser or seller may choose to renegotiate the purchase or suspend negotiations until the contamination has been removed. Otherwise, if no contamination is found, then the purchase can go ahead.