Environmental Due Diligence
Phase 1 ESAs | Phase 2 ESAs | Limited ESAs | SBA Transaction Screens
The purpose of environmental due diligence is to evaluate the liability risk prior to acquiring any real property. This is because new landowners can be held liable for the environmental liabilities of a contaminated property, or buildings with hazardous materials.
There are a few options to conduct environmental due diligence. Limited reports are less comprehensive, and provide environmental information about properties assumed to have lower liability risks. The more comprehensive options are site assessments for properties assumed to have higher liability risks, and also provide buyers with CERCLA liability protection as Innocent Land Owners (ILO).
Each environmental due diligence option is geared to encompass different levels of liability risk. Please see the options below, listed in order from “low-risk to “high-risk.”
Environmental Desktop Reports are limited environmental reports for properties assumed to have lower liability risks.
(Example: Buyer orders a desktop report for a property used by a restaurant, because it is adjacent to a gasoline station).
A Transaction Screen Assessment is a limited environmental due diligence report that is geared towards the loan qualification process of the Small Business Administration (SBA).
(Example: Buyer orders a Transaction Screen Report to finance a car wash).
Sometimes, a commercial property owner may find it in their best interest to independently conduct a series of limited subsurface investigations (such as a sub-slab soil gas screening, shallow discrete soil sampling, shallow soil gas screening, etc) prior to conducting a full scope Phase II Subsurface Investigation. By taking smaller steps in the form of limited subsurface investigations, landowners can use the limited results (low risk information) to help determine whether pursuing full scope Phase II Subsurface Investigation is in their best interest.
(Example: Landowners requests subslab soil gas survey to determine whether to follow through with a loan).
Phase I Environmental Site Assessments are comprehensive due diligence reports that evaluate liability risk at a standard established by the EPA to defend innocent landowners.
(Example: Buyer orders a phase I report for a shopping center that previously occupied a dry cleaning facility).
Phase II Environmental Site Assessments are comprehensive field investigations for properties with reported environmental concerns.
(Example: Buyer orders a phase II investigation at a gasoline station, to test and disclose whether the soil and groundwater is contamination).
Forward-Thinking Geologists, Engineers & Contractors