Environmental Property Audits are an objective and investigative tool designed to assist public and private sector clients at the time of property sale, acquisition or refinancing.

The purpose of the Environmental Property Audit is to identify any actual or potential sources of environmental contamination stemming from past property usage.

Environmental problems are not always readily apparent and can significantly impact the value of a piece of property. If, for instance, asbestos-containing building materials, underground storage tanks, PCB-containing equipment, or other potential hazards are determined to exist, these can create far greater potential liability problems for the owner than many mechanical or cosmetic problems. Please note, the use of other professionals in review of the property's suitability for construction or the existing building function and structure is also advisable.

The basis for this type of service is in response to the strict liability requirements established by two Federal Laws: the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), and the Superfund Amendments and Reauthorization Act (SARA). Under these two laws, a purchaser of property is automatically responsible, in part, for the cost of environmental cleanup of contamination found to exist, unless a thorough investigation is completed prior to their acquisition of the property with no contamination disclosed.

These laws also provide for liability of former owners of properties for contamination created during their ownership, as well as present owners becoming potentially liable for certain aspects of future activities on a property. Legal concerns are far more serious when environmental hazards are not identified until after the property has changed hands.

An Environmental Property Audit can provide a crucial framework for negotiating purchase prices and controlling the costs of remodeling or remediation after a purchase. Environmental Property Audits are mutually beneficial for all parties involved in the real property transaction.

For the buyer of a piece of real estate, the audit limits the potential liabilities associated with undisclosed environmental, health or safety problems. The biggest advantage realized by the buyer is that environmental problems can be identified at the site before any financial obligations occur, beyond the cost of the audit. The audit can further identify the extent and scope of any potential problems as well as the financial liability and costs of remediation. By determining if any undisclosed risks or liabilities exist at the property, the buyer is better able to determine the conditions and negotiate accordingly for the acquisition of that property.

Financial lending institutions are aware of the potential for acquiring contaminated property through the foreclosure process. If the lending institution is forced to foreclose and acquires the property through default, the lending institute may face the potential of becoming responsible for the liability involved in cleaning up any environmental impacts resulting from the operations or occupations of the previous owners.

With foresight and previous knowledge of any site problems the seller can greatly improve his negotiating stand by providing documentation up front that the site in question is free from any known environmental liabilities at the time of the sale. Also of importance to the seller is the reduction in their long-term liability, and reducing the chance that sometime in the future the buyer will return, requesting assistance with the cleanup of a previously undisclosed problem with the site.

The Environmental Property Audit process attempts to document the existing site and facility conditions as well as identify any corrective or remedial actions which may be required. The process is split into three phases:

Phase I

Phase I is primarily a historic review and initial site investigation. This phase attempts to document any past activities through the review of historical information and compiling a physical description of the site as it appears at the time of the investigation. Typically, the completion of a Phase I will involve the review of historic aerial photographs, public and owner records, as well as the chain of title.

Site profiles are also produced, identifying geological considerations, existing operations and land use features. Interviews with current/past owners and/or occupants are conducted, as well as a site survey to identify any visual evidence that would suggest sources of environmental contamination.

A report is developed which includes the findings, identification of any potential environmental liabilities, and offering specific recommendations.

Phase II

Phase II is based upon the results and findings of the Phase I investigation.

This phase is designed to confirm or disprove the preliminary findings from Phase I and quantify the extent of any environmental problems associated with the site. Phase II typically involves analyzing samples of soil, water, building materials not associated with the Phase I investigation, and any other suspect substances.

Phase III

Phase III involves the design, implementation and project management of remedial actions deemed necessary upon completion of the Phase II portion of the audit.

This phase could typically involve, but is not limited to, asbestos removal, underground storage tank cleanup, or hazardous waste disposal.

In today's environmental/liability-conscious world, it is important that buyers, lending institutions, and sellers realize the potential liabilities involved with the transfer of a piece of property containing hazardous or toxic contaminants.

The earlier these problems are found to exist, the greater the likelihood that they can be resolved without significantly interfering with the course of the transaction. You will also be providing a service to the greater good of the community by discovering and remediating these environmental problems before any further damage is done.