An environmental questionnaire is the preliminary task in the environmental due diligence process by lenders and other information-seekers. The questionnaire screens the environmental hazards of a property undergoing any transaction. It consolidates the known facts of a property up front, for a basic level of contamination and health risk presumption. Typically, the questionnaire takes place in the pre-loan qualification process. And in the same way, the form applies to sales and title transfers. Ultimately, any possibility of contamination could lead to the ordering of a transaction screen assessment, desktop report or Phase 1 ESA report. Updated August 16, 2019.
The environmental questionnaire form is only a basic screening tool in a loan process. This is a preliminary step for risk assessment, and isn’t a comprehensive ESA report. Unlike a Phase 1 ESA, the questionnaire does not require completion by an environmental professional. It is merely a tool for lenders or other entities to use before obtaining an ESA report. However, a Phase 1 Environmental Site Assessment is a comprehensive report, and requires the certification and oversight of an environmental professional. Consequently, this form does not replace a proper Phase 1 ESA.
If an environmental questionnaire indicates any chance of environmental risk, the services of an environmental professional then become a requirement. This might begin with a transaction screen review, or an environmental desktop report. In the same way, the requirement for a proper Phase 1 ESA report may become necessary.
On the other hand, this form can also be requested by an environmental professional, during a transaction screen review, desktop report or Phase 1 ESA. For instance, an environmental engineer can utilize the written statement of the current tenant or property owner, by asking them to document their official land-use in the questionnaire. Similarly, an engineering consultant may request their Client or the report user complete the form as well. The objective in the case, is to cover all grounds during a comprehensive assessment.
The Small Business Administration (SBA) specifies its own requirements for an environmental questionnaire. For instance, the SBA environmental questionnaire can request information about an adjacent property, as well as the Subject Site itself. For instance, a multi-family lot which is adjacent to a gasoline service station may have a contamination migration concern. Thus, a further investigation may be in order. The SBA suggests lenders complete this form in good faith, upon visiting a property. Similarly, consultants also request users of an SBA Phase 1 ESA, to complete the form as well.
Similarly, the USDA states any activity that may adversely affect the environment must not be undertaken without completing a “Rural Development Environmental Report.” Thus, in the same way as the SBA, the USDA implements additional pre-screening requirements. Moreover, other entities and institutions are also requiring a preliminary due diligence process, on the basis of an environmental questionnaire.
Most environmental questionnaire forms do not require a signature or certification. However, it is not uncommon for consultants or institutions to include their own signature requirement on the questionnaire. The objective is to maintain an authentication factor, and hold those completing the form accountable for their answers. Nonetheless, all questionnaires (regardless of purpose or origin) are required to be performed in good faith.
A User Data Request Form, or a “User Data Questionnaire,” is a little different from an environmental questionnaire. The two forms should not to be confused with one-another. However, there may be some overlapping information. To illustrate, a Phase 1 ESA report user must provide a User Data Request Form to the environmental professional, in order to qualify for Landowner Liability Protection. This is a part of the Brownfields Revitalization Act of 2001.
There are at least four pillars to the standard User Data Request Form. The first inquiry involves the potential knowledge of environmental cleanup liens against the site. The second question pertains to any knowledge of activity or land-use limitations currently on-site, or whether any have been recorded before. The third inquiry involves specialized knowledge or experience of the person potentially seeking to qualify for the Landowner Liability Protection. And lastly, the fourth question clarifies the relationship of the purchase price to the fair market value of the property, if there is no contamination. Failure to provide the User Data Request Form information could result in a determination that the “all appropriate inquiry” requirement is incomplete.
At the very least, a typical form requests information about the historical and current occupants of the property, the land-use, utility service providers and whether any prior reports or concerns took place. In the spirit of training and sharing information, Geo Forward provides a free Environmental Questionnaire Example online. The complete form is available in PDF format via the Geo Forward website. Additionally, the images below demonstrate the comprising inquiries and information.
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