Commercial Buildings Environmental Inspections & Testing
The Environmental Site Assessment Phase is an environmental due diligence report prepared for real estate transactions such as land purchases, building purchases, leases, business purchases, new residential developments and bank loans.
Reports must be performed in general compliance with American Society for Testing and Materials (ASTM) Standard E-1527-13. This ASTM standard adheres to the Environmental Protection Agency All Appropriate Inquiries Rule, codified into the federal regulations by the EPA (40 CFR Part 312). This Phase 1 Environmental report typically required by lenders and it is highly recommended prior to purchasing commercial or industrial real estate, or prior to starting new residential developments.
When you purchase a home or business most lenders and insurers require things like home inspections and termite inspections in order to complete the transaction.
When do you need a assessment?
The report investigates the environmental conditions of commercial properties and, if no risks are found, frees a new owner from any liability under federal environmental cleanup laws. Called CERCLA or Superfund laws, these are serious regulations and liability impacts can be huge. For that reason, many lenders, insurers, municipalities and regulators require reports for commercial property transactions. This is especially common for properties known to have been used for industrial purposes, that are old enough to predate hazardous materials restrictions, are vacant in an urban area, or are residential complexes that could have been exposed to hazardous materials.
What does the assessment involve?
A assessment is an investigation of a current condition and historical use. Typically, it involves a visual on-site inspection with detailed photography to document conditions, a review of records for information about past ownership and uses, and a review of these uses to determine if any of them would have likely involved hazardous materials. Similar searches are done on nearby properties. Interviews with past and present building occupants, and with owners of neighboring properties are also conducted to validate past uses. This phase does not typically involve any lab testing of things like paint, soil, air or moisture, through a visual inspection may indicate the presence of hazardous materials.
Once a Phase 1 report is completed
That depends in part on the findings, and in part on the requirements for a specific transaction. If a report turns up any evidence of possible contamination, this may trigger a an additional assessment to determine if the possible contamination in fact exists. Also, different lenders and public agencies may require additional due diligence reports. These might include:
Hazardous Materials Survey
Property Condition Assessment (PCA)
Probable Maximum Loss Report:
American Land Title Association Survey
Local experience can be important because local planning departments often have specific processes they use, and knowledge of these processes can expedite reporting. The most important thing to think about in performing a report is to get it done right. If there are risks associated with a property, you want to know about them as early as possible.
Physical Needs Assessments (PNAs). We tailor our PNAs to the type of loan you receive, with each funding agency (HUD, FHA, etc.) having their own set of requirements.