Environmental Due Diligence

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Environmental Due Diligence

Due diligence, is a legal phrase, defined by Merriam-Webster as “the care that a reasonable person takes to avoid harm to other persons or their property”. In other words, it’s the research you take before engaging in a financial transaction, for example:

  • Will the used car I purchase be reliable?
  • Is there anything structurally wrong with the home I’m buying?
  • Could there be a hidden environmental problem with the commercial property I’m investing in?
Each of these questions indicate risk involved with a purchase. To mitigate that risk you need to solicit the help of a mechanic, home inspector, or Environmental Professional. In purchasing commercial property, the professional you choose will perform an Environmental Site Assessment (ESA). The ESA may be required by a financial institution by a lending institution, to determine if there is a significant environmental impact. Such an impact could lower the value of the property, or open the lender to liability. Understanding the particular risks associated with a property can help mitigate the risks associated in these transactions.

The first phase (Phase I) involves a review of available documentation regarding the history of the property. This allows the Environmental Professional to identify when the property was first developed, what businesses operated there, and what records may have been filed with regulatory agencies. Any potential problems will be identified as a ‘Recognized Environmental Condition’, and may require a second phase (Phase II) – the collection of soil, groundwater, or air samples. A third phase (Phase III) consists of the remediation of contaminants identified at the property.

Conducting a Phase I ESA is a standardized process. Methods used by an Environmental Professional must conform with the US EPA “All Appropriate Inquiry” and with the American Society for Testing and Materials ASTM Method E1527-13. Importantly, meeting these standards can offer legal protections for the purchaser. ReDevelopInc. offers a cost-effective and high quality due diligence product by a qualified Environmental Professional. Potential concerns will be communicated promptly.

Through a collaborative effort, the services provided by ReDevelopInc. are not limited by geography. We are proud to serve as part of a nationwide cooperative to provide with quality service, regardless of location.

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