Understanding Environmental Due Diligence

Posted: October 28th, 2009 | Author: | Filed under: Phase I ESA | Tags: , | Comments Off on Understanding Environmental Due Diligence

Environmental due diligence seems to be a byword in today’s real estate industry. But what is it really and how does it impact the way business is conducted?

To further understand this, we need to first define due diligence in relation to the industry. When we hear the term “to exercise due diligence”, it simply means being extra cautious in the way we conduct the business. Everything needs to be further scrutinized to ensure that nothing is out of place and that all is in proper order.

Environmental due diligence is simply making sure that the land being purchased does not pose any potential risks or environmental hazards that may affect the area’s development or its future occupants.

This procedure, although commonly done today, was not really practiced before the 1980s. During that time, there were already concerns regarding the non-disclosure of property developers of potential risks to their buyers. A well known case was about the residents of Love Canal in Niagra, New York during the late 70s. They were not properly informed that they built their houses on an environmental time bomb of hazardous materials that eventually found its way to their water sources.

However, in spite of such news, and the dramatic increase in the awareness of an existing law on this, it still did not gain much popularity and was utilized mostly by large corporations with businesses in Europe. It was only during the early 1990s that EDD started to be widely used when proper implementation guidelines were determined.

The growing worldwide awareness regarding the environment and widespread concern on the impact of past land usage on current properties served as catalysts that made environmental due diligence a necessity. Property owners, developers, sellers and buyers understood the need to protect themselves from future liabilities.

The environmental site assessment is conducted in different phases depending on the requirements and the extent of information needed regarding the property. Phase 1 ESA is primarily based on data collected from researching the history of ownership of the land and how it was used. Usually, a property condition assessment is also done at this phase to create a more comprehensive report for the use of buyers and sellers.

Should anyone need a more thorough investigation of the site where actual samples will be collected and processed, then there is a need to go to the next levels or phases.

The nature of the work involved requires a specialized team. Companies providing environmental engineering services and industrial hygiene consultants are called upon to implement this. They should not just be Baccalaureate degree or Professional licensee holders in the fields of science or engineering, but more importantly, must possess the necessary experience in such field of work.

Environmental due diligence is a matter taken very seriously by people in the industry. It is not limited to determining the hazardous nature of a property. It goes beyond that. EDD help safeguard the environment. It is therefore important to hire competent consultants who will maintain a sense of impartiality so as to submit credible reports.

Environmental Due Diligence By ESA

Posted: October 27th, 2009 | Author: | Filed under: Phase I ESA | Tags: , | Comments Off on Environmental Due Diligence By ESA

Doing Environmental Due Diligence is a win-win situation for our environment and for the property owner. That’s why in United States the government is highly recommending every site property to undergo ESA before anything else. It must be the responsibility of the property owner to do this. They need to remember that money isn’t everything and that they need to think of their site’s health and what would be its effect to the environment if they let it be contaminated. So what is ESA?

An Environmental Site Assessment (ESA) is a report prepared for a real estate holding which identifies potential or existing environmental contamination liabilities. It typically addresses both the underlying land as well as physical improvements to the property. When conducting ESA, it is the phase 1 ESA that you need to undergo first.

Phase 1 ESA tells people what lies beneath. Beneath the surface of the subject property as Phase 1 inspect the land. Scrutiny of the land includes examination of potential soil contamination, groundwater quality, surface water quality and sometimes issues related to hazardous substance uptake by biota.

Phase I Environmental Site Assessment reports are normally performed for commercial properties, residential developments, agricultural properties and industrial properties. They are usually required by banks for real estate purchase loans or refinancing. Even if a lender is not involved in the real estate transaction, a Phase I report is recommended as protection from any future environmentally-related liability after taking title to the property.

A property condition assessment also includes a review of local governmental documents regarding the site to determine what the past usage of the site was, along with extensive document review of the surrounding area. It also entails a very involved and detailed site visit by a qualified professional. In addition there is data base information that is gathered and reviewed of the surrounding vicinity to determine if there is a potential risk from an environmental stand point in the immediate area.

These potential risks can be anything from a past gas station on or near the site that might have contaminated the ground water to there having been a dry cleaner on the site that might have spilled chemicals into the ground. There could have been past dumping on the site or an auto repair that did not handle the oils properly, lead in the paint, asbestos, and on and on. Industrial hygiene consultants can detect all of that.

The Phase I ESA is generally considered the first step in the process of environmental due diligence. Standards for performing a Phase I site assessment have been promulgated by the US EPA and are based in part on ASTM in Standard E1527-05. If a site is considered contaminated base on results of Phase 1 ESA, A Phase II Environmental Site Assessment may be conducted, ASTM test E1903, a more detailed investigation involving chemical analysis for hazardous substances and/or petroleum hydrocarbons. If contaminants are already found and that require removal, A Phase 3 ESA will soon be conducted. This includes remediation of the site.

In the United States of America demand increased dramatically for this type of study.
Mainly because property holders already realized how important it is for their property to undergo ESA before anything else.

In looking for an environmental engineering service to conduct ESA in to your site, remember that you need to find professionals that have the expertise and experience on handling it. Environmental Consultants should have a thorough understanding of environmental laws and practices so that they can quickly provide turnaround on Phase I & Phase II Environmental Site Assessments.

Environmental Site Assessment – Why Do You Need It?

Posted: October 24th, 2009 | Author: | Filed under: Phase I ESA | Tags: , | Comments Off on Environmental Site Assessment – Why Do You Need It?

In the movie Erin Brockovich, the character of Julia Roberts was neck-deep in investigation about the suspicious activities of Pacific Gas and Electric Company, which led to the eventual poisoning and death of the residents nearby the area. After going through a series of unproductive meetings among lawyers, residents and owners the company was soon charged of buying a piece of land that was already contaminated. So what does the movie have to do with you, you ask?   It tells you that you can avoid this situation by getting an Environmental Site Assessment (ESA) for your subject property.

Of course, nobody wants his company to undergo the same mishaps as seen in the movie.   Court trials are time consuming and litigation lawyers charge too expensively that you just want to settle things under the table.  Plus a suspicious site would lessen its credibility and drive people away from it.

Naturally, you would want to retain the value of your property and not get into any kind of legal trouble of any sort. You can do this through Environmental Site Assessment.   Through Phase 1 ESA, you can rest assured that your property is free from potential environmental liabilities like toxicity or contamination.  Professional consultants will determine whether the land you own or are planning to buy is a potential environmental threat because, or what are better known as “brownfield sites.”

In the 1970s, a similar study was done in the United States to inspect commercial properties and to test them whether they are potentially hazardous to health. Now, the US has stricter monitoring than ever when it comes to environmental issues. Before you could actually have an acquisition or a management buy-out, you need to abide first by the environmental due diligence – a kind of investigation which identifies environmental hazards. It will give you details on how a former or a current operation poses a potential risk for your employees and nearby residents.
The inspection will tell you in detail the history of the chosen property, how the former operations contributed to possible environmental hazards, and how you could verify legal compliance from regulation authorities.
Tests are conducted by industrial hygiene consultants. These professionals see to it that every nook and cranny of your would-be land acquisition is scrutinized, looking for loopholes such that lead to toxicological risks.  A property condition assessment is done to check whether if the health and safety requirements mandated by the State are met.   Industrial hygiene consultants perform samplings and assessments, all of which are then turned over to an accredited laboratory for further evaluation. They also see to it that investigations, which include an expert witness testimony and an assessment of workers compensations claims, are done in a discreet and professional manner.
Aside from industrial hygiene consultants, you may also seek help from other companies on environmental engineering services. The services included on this one are feasibility studies, construction oversight, waste management consultation and other facility design services. You can address the underlying issues of pollution or contamination through environmental remediation. Avoid getting into grave legal issues on environmental safety by having your company go through Environmental Site Assessment.