Curren Environmental Blog

Oil Tank Pit Falls  Buyer Beware

Posted by david sulock on May 18, 2018 12:50:08 PM

It should be common knowledge that buried oil tanks can be a problem. We get questions from unsure clients regarding liability of buying a home with an oil tank. - here's the 7 Most things you should know that can potentially save you a lot of money:

1) A buried oil tank will not necessarily be known or disclosed by the property seller.  Buyer Due Diligence is critical in performing a tank sweep.Tank Sweeps with GPR

 

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The buyer, buyer's attorney and the buyer's real estate agent should assume the responsibility of finding if they are buying a home with a buried oil tank.

2) Oil tanks and roofs have similar life spans (20 to 30 years are reasonable).  The vast majority of buried underground oil tanks have exceeded their expected life expectancy. That means the risk of a leak increases with each day until the tank is removed.

3)  Construction code places the burden of tank closure (when taken out of service) on the owner.  In most cases, the seller should and will pay for the cost of oil tank removal and/or soil remediation before closing - even when a tank is found to exist with a tank sweep by the buyer.

4).  Mortgage and insurance companies will not provide a mortgage or insure a home with an old buried oil tank.

 

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5)  Holes in a tank did not necessarily mean that remediation is required.  Every State allows a certain amount of oil to remain in the ground from a tank leak.  Meaning just like cholesterol, there are good and bad levels of oil.   Contracts for tank removal should include testing as it is naive to believe that some oil may not have leaked from a old buried oil tank. Holes or petroleum odors in a tank excavation are not conclusive evidence that remediation is warranted.

6)   Buying a home where an underground oil tank was removed and no report with laboratory testing is available (or completed) is taking a risk.   Many tank leaks go unreported, not remediated or unknown to current owners of a property.

 

7) Luck number 7, if you are reading this and have questions regarding an oil tank or about a property you are buying where a tank may exist?  Call the experts, we offer a free initial consultation   888-301-1050

Black Mold? Mold comes in many different colors...not just black.

Posted by Tiffany Byrne on Apr 24, 2018 3:02:00 PM

Did you know that Mold comes in many different colors? The color doesn't matter, what matters is if it there is mold growth and if you stopped the water filtration. 

At Curren, some of the most common questions are regarding the color of mold. For example:

  • "Is this mold bad because the mold is black or grey?
  • "What type of mold is black mold?"
  • "Is black mold toxic?"

The most popular used term for describing mold is Black Mold. Technically, there is no mold that is named black mold, many sources attribute the term black mold to the media. In reality there are many different types and colors of mold. Some types of Mold can be harmful (regardless if the mold is black) and can cause health issues.

Molds come in many different colors and can mean many different things. As you can see below, mold may be black, grey, orange, green, brown and even white. Many molds may not be harmful. Black mold may be completely innocuous (not harmful or producing no injury) or it could be problematic. Mold can be difficult to determine on your own. The mold you think you see might just be mildew or dirt. Remember, mold is usually not a problem unless mold spores land on something wet  indoors. Mold evaluation and interpretation is best left to the experts. At Curren, we have over 20 years experience testing mold, air testing and mold remediation.

 

Black Mold                                          Green Mold

Mold_in_Basement3-424194-edited                             Green_mold

White & Black Mold                           Brown Mold

IMG_5501-877705-edited                           Brown_mold-968330-edited

Grey Mold

Grey_Mold-078065-edited

Please don't hesitate to call us for your mold testing, mold remediation and mold questions.

1-888-301-1050 

 

 

 

Tags: mold, Mold Testing, mold remediation

Earth day is April 22nd. What can you do on this day?

Posted by Tiffany Byrne on Apr 20, 2018 9:14:00 AM

 

Earth Day Friendly Things to Do

No one wants to do bad by the environment, and sometimes doing good things for the environment is hard.  Here are easy ways to help the environment for Earth Day and Every day.

  1. Go a day without drinking bottled water.

  2. Buy and use a refillable water bottle, just so you can keep promise number 

  3. Always keep a receptacle by your desk (Home or Office) to place non-trash items.

  4. Rather than drive around for the closet parking spot, park farther away where the spots are plentiful. Face it, you can use the exercise and less driving is less fuel consumed.

  5. Half a cup of water on your counter? Pour it in a houseplant.

  6. Buy fragrance free cleaning supplies, those fresh scents are chemicals.  Less chemical means cleaner air inside your home.

  7. Buy small reusable water bottles for your kids and stop buying juice boxes.

  8. Use a quality doormat and place them at every entrance to your home.  Doormats capture dirt, particulate and contaminants prior to entry to your home.  All that fertilizer on your lawn and on your shoes from the golf course will now stay outside.

  9. Start a compost pile for grass and leaves, the decomposition of both items will give you nutrient rich soil for next season

SBA Phase I & Phase II ESA Changes Effective January 2018

Posted by david sulock on Mar 13, 2018 1:10:04 PM

SBA 2018 CHANGES TO THE PHASE I & II

SBA SOP 50 10 5 (J)

(Phase One Environmental Site Assessment & Phase II Investigation)

 

As of January 1, 2018, the SBA has changed their environmental due diligence requirements.  These changes relate to Phase I ESA's completed and Phase II requirements for certain sites applying for SBA funding.  The changes are more conservative and reflect SBA experience with Due Diligence completed and the need for stricter standards.

 

 

January 1, 2018 marks the effective date of SBA SOP 50 10 5 (J) relative to Phase I and II requirements.    These new requirements must be followed by parties going through SBA lending.  The Nine Key Areas of the most important changes are as follows:

  1. Dry Cleaner Requirements
  2. Gas Stations
  3. Records Search with Risk Assessment
  4. Phase I Environmental Site Assessments Recommendations
  5. Shelf Life of a Phase I
  6. Reliance Letters
  7. NACIS Code List
  8. Historic Places
  9. Insurance

 

1.       Drycleaners

If lending occurs to any site where dry cleaning was EVER performed then a Phase I Environmental Site Assessment (ESA) and Phase II ESA must be performed.   This is a change to the prior requirement where  the SOP only required a Phase I ESA for current or former dry-cleaning operations and the Phase II was not necessary is if prior dry cleaning operations were under 5 years.  Now if the target site has current or former onsite dry-cleaning facilities that used, likely used or uses chlorinated and/or petroleum-based solvents a Phase II is mandatory.  If the Phase II ESA finds any soil and groundwater contamination and soil vapor intrusion, it must be addressed.

 

2.      Gasoline Service Stations

The Environmental professional must document with professional judgement that the facility complies with all regulatory requirements relating to tank and equipment testing i.e. the tank system.

The SBA loan will not be completed until full compliance is achieved, and deficiencies have been corrected, which would require monetary outlay by the borrower.  

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3.      Records Search with Risk Assessment

In a Records Search with Risk Assessment (RSRA), historical sources, regulatory databases and an environmental questionnaire are used to determine current and historical uses of a property in order to provide a risk determination. Site reconnaissance activities are not part of a RSRA. The new SOP has additional requirements for the historical sources used in a RSRA. The historical records should identify property uses back to the first developed use or back to 1940, whichever is earlier. In addition, the RSRA should include the database reports and historical records used to develop the opinion noted in the RSRA.

 Get answers to Phase I Questions

4.           Phase I Environmental Site Assessments (ESA) Recommendations

Any Phase I ESA will include a conclusion by the Environmental Professional whether there is risk of contamination so minimal that no further investigation is warranted or that sufficient risk warranting additional investigation is present. Recommendations, including Housekeeping recommendations of the Environmental Professional’s recommendations are to be followed.  In short, if further work is recommended, it is to be accomplished.  Noncompliance requires the party to provide to the SBA Environmental Committee justification for not wanting to follow the recommendations of the Environmental Professional, which requires review and approval or denial from the SBA Environmental Committee.

 

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 5.       Shelf Life of a Phase I

SBA will accept an All Appropriate Inquiry (AAI) compliant Phase I if it was performed within one year of submittal to the SBA. The prior version of the SOP had a 180-day limit.

 6.       Reliance Letters

Reliance letters are required for Transaction Screen Reports, Phase I ESAs and Phase II ESAs. The SBA Reliance Letter template cannot be modified.  Lender and CD’s are not supposed to alter the terms of the SBA’s standard reliance letter.

 

7.        NACIS Code List

The NAICS code(s) for the Property’s current and known prior uses must be obtained or a good faith effort exerted to obtain the number(a) and a comparison must be made to the NAICS code(s) to the list of environmentally sensitive industries. Two new categories were added and four were amended.   The NACIS can trigger a Phase II:

  • 484 – Trucking (if service bays, truck washing or fuel tanks are present)
  • 713990 – Other recreational industry (indoor and outdoor shooting ranges only)

In addition, four clarifications were added. The clarifications are noted below.

  • 316 – Leather & Allied Product Manufacturing (not required if assembly only)
  • 326 – Plastics & Rubber Product Manufacturing (not required if assembly only)
  • 332 – Fabricated Metal Product Manufacturing (not required if assembly only)
  • 8122 – Death Care Services (unless no embalming or cremation at the property.

8.     Historic Places

Potential to impact listed/eligible to be listed properties on the NRHP, the SBA counsel should be consulted. If impacts to historic places are anticipated, the SBA is required to consult with the applicable State Historic Preservation Officer (SHPO), who typically has 30 days to provide feedback on the property. If no impacts are anticipated, the SBA counsel may determine that no further review is required.

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9.       Insurance

A new section relating to Indemnification was added to the Environmental Policies and Procedures section of the SBA SOP. Environmental errors and omissions liability insurance with a minimum coverage of $1,000,000 per claim (or occurrence) must be provided and that evidence of this insurance must be attached to all reports. This insurance must cover environmental work completed as of the date of the Phase I, provide coverage up to $1,00,000.00 and have no time limitation on liability.

 

 

 

Trust the Experts our Due Diligence Experience is Decades in the Making.

 

  1. Over 20 years experience.
  2. Thousands of Phase I & II ESA completed.
  3. Peer reviews performed on Phase I & II reports.
  4. In house Drilling, Geophysical & Excavation equipment for cost control.

 

Tags: Phase II

How long does an Oil Tank Last?

Posted by David C Sulock on Mar 6, 2018 4:01:00 AM

What is the life expectancy of an oil tank?

How long does an oil tank last?  When do you replace an oil tank.  These are popular oil tank questions.  All things have a finite life expectancy. Both aboveground storage tanks (ASTs) and underground storage tanks (USTs) have a usable life. The problem is your tank can fail (holes appear) and you may never notice.  An industry average for the life span of an oil tank is 20 years, some tanks last longer and some shorter.  This time frame is greatly dependent on the type of oil tank, construction of the tank (meaning thicker walled tanks generally can last longer). environment the tank is in (indoor - outdoor),  and the contents of the tank.  Harsher environments tend to shorten the lifespan of pretty much anything, including steel tanks. 

 
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When I ask people how long they think a tank is supposed to last I typically get silence or "I don’t know".   Then, I tell them thank you for not saying "Tanks last FOREVER".   A simple rule of replacement is if the roof has been replaced, so should the tank.    This is for all the people who are using a tank TODAY and if your house was built between 1950 and 1995, your tank is beyond any reasonable expectation of usable life and should be replaced.  No there is not a likely possibility that the original tank from the day your house was constructed has been replaced.  The saying 'if it isn’t broken don’t fix it' is unfortunately followed when it comes to oil tanks.   Simply put, if people replaced tanks within a reasonable amount of time, you wouldn’t have tank leaks and expensive environmental cleanups.

How do oil tanks leak?  Many oil tanks rust through from the inside out.  This most often occurs when the oil is not present, meaning upper portion of the tank where the tank is empty and the oil is not present to lubricate the steel.  Tanks can also leak due to the use of low sulfur fuel.  Heating oil tanks that have low sulfur fuel and water can allow microbial growth to occur.  Secretions from these microbes can produce acids that can corrode a steel tank.

Click Here to Learn about Testing Oil Tanks for Leaks

Aside from corrosion inside the tank, an oil tank can deteriorate from the outside due to environmental conditions.   Rust never sleeps and for corrosion to occur you need metal, oxygen and moisture.   How fast a given metal rusts is based on the environment the metal is exposed too. 

 

Holes in Underground Oil Tank

 

Aboveground oil tanks may look fine from a cursory exterior view but in fact, could heavy corroded on the inside and be ready to fail. 

Underground oil tanks are thicker than comparable aboveground tanks due to a more corrosive environment.  In short, an indoor rated AST is thinner than an outdoor rated AST, which is thinner than a buried UST.  Curren has found that there is a wide variation in indoor aboveground and outdoor aboveground oil tank life spans due to the considerable variation in both the quality and thickness of steel (older tanks seem to have been a heavier gauge steel), which helps prolong the life of the tank.

 

Tank Questions? Click Here

We have seen indoor oil tanks in good condition that are 60 years old or older, and we have found failures in newer oil storage tanks that may have been made of thinner or cheaper steel and that did not last as long as the original ones.  The tanks made immediately following WWII are of higher quality, saying things are not made as good as they used to be is a very true statement when it comes to oil tanks.

Rather than guess a tanks oil tank condition, we suggest that if your home has an older aboveground oil storage tank, twenty years old or older, you should replace the tank.  Keep in mind many brand new oil tanks have a 1 year warranty.

What Can Cause an Oil Tank To Leak?

  • Exposure of the oil storage tank to wide temperature swings, especially in cold and humid climates can increase in-tank condensation leading to corrosion
  • Exposure of the tank fill or vent pipes to rain, especially to roof runoff for tanks mounted under the eaves of a home and especially if the oil fill cap is not securely tightened after filling with oil.  
  • External oil tank rust due to exposure to the weather. Many small tanks, 275 to 300 gallon tanks were used for unintended uses.  Meaning many of these size tanks, were never rated for outdoor use, but have been used for outdoor use and some even buried.   You can tell what use a tank is rated for by reading the UL label that is affixed to the top of the tank.  Manufacturers of newer oil storage tanks in this size range often have removed this "indoor use only" wording from the UL label.
  • Improper oil tank installation  of improper oil tank type.  Meaning the tank was not designed for the current use.  We have found indoor oil tanks that were moved outside and placed onto the underground in the soil surface below a deck, and then partially to half buried. What is this tank, an underground tank or an aboveground tank?  (The government definition of a UST is one where 10% or more of the tank is buried below ground.) These tanks were not rated for outdoor use at all and are at extra risk of leakage due to placement of the tank body directly in contact with the soil.
  • Improper oil storage tank supports, such as failure to keep the outdoor tank off of the ground, to install it at the proper pitch and direction of pitch, and to install it on level surface, unsecured legs of the tank can lead to the tank tipping over, ripping open an oil line, and obvious discharge of oil from the tank.   This is more common with out-of-service tanks.

Want information on tank removal? Clock here Oil Tank Removal

Tags: oil tank, tank leak, OIl Tank Sweeps, tank removal grants, oil tank removal nj, oil tank removal new jersey

Green Lawn Tips

Posted by David C Sulock on Mar 3, 2018 9:01:00 AM

Green Lawn Tips

Americans spend over $6.4 Billion a year on lawn care, according to the Professional Lawn Care Association of America. Why not get started in the spring to ensure a beautiful green and healthy lawn.

Start out by checking the soil pH levels. Winter can alter the soil pH and create conditions that are friendly to weeds and disease. The soils pH should read between 6.5 and 7.0 which are slightly acidic. You can test your soils pH by purchasing a pH tester. After the soil has been checked, invest in a rental aerator. In high traffic areas grass becomes compacted. The aerator will draw wine cork-sized plugs out of the lawn surface giving roots the room to spread and allow for air, nutrients and moisture to penetrate the soil.

Green_lawn

Pro Tip

The soil cores should not be raked always, as they contain bacteria and nutrients that will return to the soil.

In the early spring, apply a pre-emergent weed control to prevent crabgrass in early spring.

Pro Tip

½ the dosage of preemergent and reapply in 3 weeks to increase the treatment duration. Try to get your immediate neighbors to do the same so you encompass a larger spread of weed control. If your neighbor does not apply preemergent, weeds can grow and move to your yard.

During late spring fix any patchy places and apply your seed. When seeding in the spring it is pertinent that you provide consistent watering to allow the seed to germinate

Pro Tip

Water twice a day for 7 to 10 days to allow the seed to germinate.

When watering, make sure one inch of water to 12 inches of soil is preferred ratio for watering actively growing grass. You most likely will have to seed again in the fall months.

With the spring upon us, it is very important to prepare your lawn for the warmer, sunnier months ahead. Having a nice, thick green lawn helps with excess rain, capturing the moisture so it does not end up in your house to produce mold.

What are Mosquitoes Up To Now?

Posted by Tiffany Byrne on Feb 21, 2018 8:58:00 AM

What do Mosquitoes do in the winter time? Mosquitoes are cold blooded creatures and do not generally bite in temperatures below 50F. Most male mosquitoes cannot survive the Northern winter months. Females on the other hand actually gain some size and can make it through the cold weather. Before the cold weather the females lay all their eggs. The eggs will winterize and can sustain through the winter. The eggs hibernate as embryos.

What is the life cycle of the Mosquito?blood sucking mosquito.jpg

  • Lay the eggs (in water)
  • Eggs become larvae (in water)
  • Larvae become Pupae
  • Pupae become adult mosquitoes

For more detailed information on the mosquito life cycle click here.

Mosquitoes don’t exactly bite humans, they feed on them. The female needs the protein to produce her eggs. Mosquitoes can spread disease; the diseases are often viruses that are picked up by the mosquito when it feeds on an infected host. When that mosquito then feeds on another host, it can spread that virus and so on. Moving from person to person until the eggs are laid.

Spring is in the air…warm weather and rainy days are ahead. Seasonal Mosquito Remediation packages are available through Curren Environmental.

Call Curren now at:

856-858-7172

or fill out the form and Curren Environmental will respond to you as soon as possible

Tags: mosquito, Mosquito Remedation

What is Mold and why is it not black or toxic Mold.

Posted by David C Sulock on Feb 21, 2018 6:00:00 AM


What is mold and is mold dangerous?   Two common questions regarding mold.  First let’s start with "What is mold?". Mold is ubiquitous in our environment.  There are few places on earth, where molds are not present.  That said, mold (which is also called fungi) is a broad-spectrum term to describe fungi, mushrooms, rusts, mildew, and yeast. As humans, we simply complex things by using the term “mold”. Any mold is a eukaryotic organism, meaning one that has a defined nucleus.  Molds lack flagella and reproduce by means of spores. Spores are released from the mature mold body and spread by air currents on people, animals, and/or materials that travel from place to place. These spores can remain viable for extended periods of time, which, in short, is as long as it takes for a suitable environment to occur which allows the mold to form new colonies.

What is Black Mold? What is toxic Mold.

The next two most common questions. First, black mold is not a mold it is a color, the term was made up by the media. There is no mold that has the scientific name as black mold. The same goes for toxic mold, we think the name toxic mold came from the mold industry to scare people. Again no mold has the scientific name toxic mold.

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Molds are fungi that grow in the form of multicellular filaments called hyphae that spread to form a network or colony called mycelium. When you see visible mold (spotting, staining, discoloration) you are observing a colony of mold. Most all fungi require oxygen to survive and all fungi need an organic food source.   Unlike humans, molds do not ingest their food but rather absorb nutrients by attacking dead organic matter or parasitizing living organisms. In an outdoor environment you can think of molds as nature’s composers as many molds live in the soil and are active in the decomposition of organic matter.

1-888-301-1050
Molds are not strictly confined to the outside, although that is their primary habitat.  Molds can grow indoors in a built environment (built being man made structure).  Molds can grow anywhere if the following four primary conditions are satisfied:

  1. Mold spores must first be present in the area.
  2. Food source such as wood, drywall, the paper part of insulation, skin cell fragments, cardboard, carpet, paper, etc.
  3. Appropriate temperature – this is a variable as molds can grow dormant when the temperature is out of range for required growth and then when the temperature is within range mold will grow.  (Think grass growing in summer and growing dormant in winter)
  4. Water or Moisture – if mold was a building, water/moisture would be the foundation, without it, you will not have molds growing and it is the one of the four conditions that can be controlled. Bottom line, if you have mold you have a moisture issue. 
  5. Moisture sources in a built environment are most commonly brought on from water and/or sewer leaks, moisture intrusion (rain) through walls and foundations.  In practice, moisture issues that fuel mold growth are associated with humidity or as condensation in HVAC systems. In terms of relative humidity, causing mold growth, is more of an intermittent issue that can occur at certain times of the year.   Damp, wet times of the year being more likely as opposed to winter when temperature may remove humidity.

    Both national and international health agencies agree that molds can cause health issues to varying degrees.   To the extent anyone is affected by molds relate to the types of molds, concentration, exposure duration and genetic factors of the individual.   There is no perfect fit that would say a certain person would be affected and this person would not.
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Mold affects humans through the inhalation of spores, which is how mold reproduces, so you should realize that when you see mold, spores are present and you could be at risk.  Molds also produce mycotoxins which are chemicals that are created during certain parts of the mold life cycle.  Mycotoxins having the word “toxic” in the name underlines them as a concern.  Mycotoxins can evoke a toxic response, for example, allergic reactions, respiratory irritation, the exacerbation of asthma symptoms as well as other respiratory reactions to an irritant.  Mycotoxins have this affect because they have very low volatility, meaning they have relatively low concentrations in the air, so contact or ingestion rather than inhalation is often the main route of exposure for these chemicals.
Since molds digest matter, they will naturally off gas.  The off gassing of mold often referred to as the musty odor is scientifically called MVOCs or microbial volatile organic compounds.  Their olfactory presence signifies actively growing mold. Fortunately for humans MVOC's have a very low odor threshold, thus, making them easily detectable by smell. Exposure to fungal MVOC's has been blamed for headaches, nasal irritation, dizziness, fatigue, and nausea.   So, while someone may refer to an odor as musty it signifies the presence of mold and compounds that are airborne that can have detrimental health effects in humans.
Chronic exposure to large airborne concentrations of fungal spores can induce allergy or hypersensitivity in certain individuals. In some cases, chronic exposure to fungal spores can result in a flu-like debilitating disease known as hypersensitivity pneumonitis.

Mold is confusing and the many unlicensed firms that perform mold work dont help to demystify mold.  At Curren will off a free initial consultation.  Call our office Monday to Friday 8:00am to 5:00pm EST and speak to one of our professionals.  888-301-1050.

Tags: mold cleanup, mold remediation, mold

                       Environmental Due Diligence

Posted by David C Sulock on Jan 22, 2018 2:40:50 PM

 

If you are purchasing a commercial property, you will be advised to perform reasonable due diligence prior to acquisition.  The standard is performing an ASTM Phase I Environmental Site Assessment (ESA).     A Phase I incorporates research of a site for the determination of past (historical) or current Recognized Environmental Conditions (RECs) that could affect the value of the property.  Banks typically will require a Phase I for high-risk sites or when loan amounts reach a certain threshold.  Banks typically have buyers pay for a Phase I to protect the bank, as the bank does not want to have a mortgagee be burdened with undue environmental remediation expenses that could in turn affect their ability to pay the mortgage.
Commercial due diligence.jpg

 Any purchaser of commercial real estate is performing Phase I due diligence to protect their interest, not is once again not typically fulfilling a requirement of the law.  Due diligence is a prudent practice to follow for any commercial purchaser.   Many buyers contact our office with little to no real knowledge of what a Phase I is and are being directed to perform one by their attorney or realtor.  Many people view a Phase I as getting their hand stamped and the quicker the better so the transaction can go to settlement.  The due diligence aspect is many times an afterthought.

We are going to cover the different scenarios when a Phase I is completed and when a Phase II or III is triggered and why that is a good thing.

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The best possible outcome for all parties after completing a Phase I, in the eyes of a buyer or seller is that the Phase I finds no issues with the site and accordingly there are no recommendations that any additional work is required such as a Phase II or Phase III.   This is not as common an outcome as many people think or expect.  Sellers do not want you to complete a Phase I as it delays the settlement and opens up the possibility that the Phase I may find an issue.   Buyers do not want a Phase I performed for the same reasons, citing the time it took to find the perfect site at the right price as well as monies already spent to date.  The Phase I is viewed as a necessary evil and one that at best could cost money and delay the sale from 2 to 6 weeks and at worst strike a crushing blow to the sale when a problem is uncovered that the owner was unaware of and unable or unwilling to address.

The odds that the Phase I will come back clean, meaning no RECs are found, is based on numerous factors including the date of site development and historical usage of the site.  We have found that some of the most innocuous appearing sites (upholstery and insurance office), have been found to have potential environmental concerns from PRIOR usage.

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A common Phase I situation is a client that is not required to perform a Phase I by the bank either because the loan amount is not triggering it or they are paying cash or there is a 1031 exchange.  These are rush hand stamped Phase I’s as there are already planned deadlines and the Phase I request is coming from the buyers attorney.  The rush part of the Phase I need is not based on anything pertinent relative to environmental conditions, but rather business or financial needs.   This is where hand stamping is most common.   Timing is relative and the sooner a decision is made on performing the Phase I the faster it will be completed.  In a perfect world a Phase I would be initiated by the seller prior to listing the property for sale.  In practice, it is one of the last things a buyer completes.

Time necessary to complete a Phase I varies.  Most Phase I’s are completed within three weeks, some can take as long as 6 to 8 weeks.  The difference in timing is based on the presence of records at the State and local levels.  The presence of files for a site at an environmental agency is typically unknown until a Phase I is initiated and the agencies are contacted regarding any files.  If files are found, the review of reasonably ascertainable files is required.  There could be a multiple week wait to get access to these files as they may be in storage or the first available date the State gives is 4 weeks away.   The time to access environmental files at a State level is the under looked aspect of a Phase I.  The determination that no files exist allows the Phase I process to be expedited.  The presence of environmentally-associated records indicates that investigation/remediation work may have been initiated or completed.  Records must be reviewed by a person with the experience and knowledge of applicable regulations to confirm that investigations/remediation has been completed in accordance with the local, State and Federal regulations.  A recent Phase I had pertinent files that were at the State.  Based on ability to accumulate the records and schedule the first available review date, it took five weeks to just perform a cursory review.  The review found that the site was formerly a gas station and had gas tanks removed and properly closed though the State.  What the file review did not indicate was the presence of other tanks on the site that appeared to have been either removed or left in place.  The unknown tanks consisted of a heating oil, waste oil and kerosene tank.   This triggered the need for a Ground Penetrating Radar (GPR) survey of the site to search for the possible missing tanks.  In this case, the buyer was sure that all the tanks were removed and signed off by the State, unfortunately that was not the case.  In this case, the buyer did not buy the site and the owner had more work to complete including the removal of the tanks.

Questions?  null

When you start a Phase I, anticipate that a Phase II may be the necessary.  A Phase II is testing or further invasive evaluation of a suspected environmental concern.   Another Phase I performed found the need to complete soil borings on the site in areas where the operations of the site may have allowed historical seepage of oils and chemicals into the soil.  The Phase II did indeed find contamination in all the borings completed.   At this point the purchaser was into the property for over 20K, which including attorney’s fees, zoning applications, engineering and environmental.  The next step after finding an area of contamination is to determine the extent of contamination and the associated costs for remediation.  This added weeks upon weeks to the financial deal which could lead to the potential purchaser to look for another property weighed against the monies spent to date.  Most contracts allow the buyer or seller to back out of the transaction if repair expenses exceed a dollar amount or a time limit.   Usually at this point the buyer, thinking they were buying a clean site, is upset about monies thrown down the drain and when the end will occur.   Rarely does the purchaser weigh the fact that the Phase I did exactly what it was designed to do which is evaluate for potential environmental issues that could devalue the site.   Slightly less than $100,000.00, later and almost 7 months from the start of the Phase I was the property cleaned up.  The buyer dodged a remediation expense that surely would have been in their lap if the property was bought without a Phase I as the party they sell too would most likely not be as foolish to purchase without performing Due Diligence.

The photo below is a drum storage area, the floor below the wood was heavily stained.  It was flagged in the Phase I as an AOC and testing was recommended and the testing found contamination.

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Phase I cost sharing.  Due to the unexpected outcome of any Phase I’s in some instances the expense of the Phase I is shared between buyers and sellers.  The advantage for both parties it not just financial (50/50 split), but ownership of the report.  If the transaction falls apart for reasons other than environmental finds issues, the owner has possession of the report and can share same with the next prospective purchaser.

tank removal.jpg

Phase II cost sharing is more complicated.  The Phase II by definition involves physical examinations and in many cases testing.  Phases II expenses can dwarf the cost of a Phase II and due to the potential of finding an issue, many sellers would prefer the testing not be performed.  This is particularly common when the issues being investigated relate to potential conditions that predate the current owner.  This is a very common situation if the current owner purchased the site in the last 20 years and did not perform a Phase I.  Cost sharing is again valuable as the owner has rights to the report and data generated by the Phase II.   In most cases if the Phase II finds an issue that must be addressed or remediated (Phase III) the phase II has to be shared with the owner to document the findings.   Phase I cost sharing is far more common than in Phase II situation.

Tags: Phase I, Due Diligence, Phase II

Oil Tank Insurance

Posted by David C Sulock on Jan 16, 2018 10:46:11 AM

A bill has been proposed in the New Jersey assembly that will require all homeowner carriers to offer coverage to remove residential USTs (Underground Storage Tanks) and to cover remediation. Assembly bill, No. A437 would require the insurer to get written confirmation from the insured that they are declining the coverage.

What this would mean for homeowner's is that coverage could be obtained for tank removals and remediation.

Heating OIi tank removal - NJ

The bill as proposed is as follows:

A437 SCHAER, BRAMNICK 2

AN ACT concerning homeowners insurance coverage and 1

supplementing Title 17 of the Revised Statutes. 2

3

BE IT ENACTED by the Senate and General Assembly of the State 4

of New Jersey: 5

6

1. a. Every insurer authorized to transact the business of 7

homeowners insurance in this State shall make available as an 8

option for purchase, in every homeowners insurance policy 9

delivered, issued, executed, or renewed in this State on or after the 10

effective date of this act, coverage for: 11

(1) removal of a leaking heating oil tank from the homeowner’s 12

property; and 13

(2) remediation of damage caused by the discharge of heating 14

oil from the homeowner’s leaking tank or any piping, fuel supply 15

line, equipment or system connected to the tank to: 16

(a) the homeowner’s property, including any impact on soil, 17

indoor air, groundwater or surface water; and 18

(b) a third party’s property, including but not limited to nearby 19

or adjoining property, or groundwater or surface water. 20

b. The commissioner shall establish by regulation the amounts 21

of coverage per occurrence and the amounts of any deductible per 22

claim or policy period for policies offered pursuant to this section. 23

c. If a homeowner declines the option to purchase coverage 24

offered pursuant to subsections a. and b. of this section, the insurer 25

shall obtain a written waiver of the coverage, signed by the 26

homeowner, whose signature shall be notarized by a notary public. 27

d. For purposes of this act, “heating oil tank” means a liquid 28

fuel tank in which heating oil is stored and from which heating oil 29

is delivered or pumped through a fuel supply line to an oil burner, 30

whether the tank is located within a dwelling or other structure, 31

underground, or outdoors. 32

e. This section shall not apply to abandoned, closed, or out of 33

service heating oil tanks. 34

35

2. This act shall take effect on the first day of the sixth month 36

next following the date of enactment. 37

38

39

STATEMENT 40

41

This bill requires homeowners insurance companies to make 42

available as an option for purchase, in every homeowners insurance 43

policy delivered, issued, executed, or renewed in this State on or 44

after the effective date of the bill, coverage for certain leaking 45

heating oil tanks. 46

The bill requires that this coverage be offered for: 47

A437 SCHAER, BRAMNICK 3

 

(1) removal of a leaking heating oil tank from the homeowner’s 1

property; and 2

(2) remediation of damage caused by the discharge of heating 3

oil from the homeowner’s leaking tank or any piping, fuel supply 4

line, equipment or system connected to the tank to: 5

 the homeowner’s property, including any impact on soil, 6

indoor air, groundwater or surface water; and 7

 a third party’s property, including but not limited to nearby 8

or adjoining property, or groundwater or surface water. 9

The bill also provides that the Commissioner of Banking and 10

Insurance establish by regulation the amounts of coverage per 11

occurrence and the amount of deductible per claim or policy period 12

for policies issued under the bill. 13

If a homeowner declines the option to purchase coverage offered 14

pursuant to this bill, the insurer shall obtain a written waiver of the 15

coverage signed by the homeowner whose signature shall be 16

notarized by a notary public. The bill shall not apply to abandoned, 17

closed, or out of service heating oil tanks.