Hot Environmental Topics

Let's agree nothing lasts forever.  Most people would likely never change the batteries in their smoke detectors if the unit did not beep when the batteries were low.   Additionally, not everyone buys Top of Line products.  Meaning, that you get what you pay for, so cheaper tanks, have shorter warranties than more expensive tanks, and no this is not a generalization it is fact.

Tank rust inside and out, you can see the rust on the inside of this tank.

The average age lifespan of an oil tank is 20 years.

Price will dictate longevity of a tank, meaning you will find tanks with longer warranties, are better built and are more expensive.

A standard tank has a short warranty (10 year)  Residential Oil Tanks | Granby oil tanks | Oil tanks | Granby Industries.   

Tanks with 30 to 40-year warranties, well they can be 4 x the cost of cheaper tanks. 

The photo below is a tank that is 8 years old, see how thin the tank is?

Pro Tip

If a tank is out of warranty, replace the tank.

If you have no idea about the warranty on the tank replace it.

Many Mobile Home parks require residents to replace ASTs at when they reach 18 to 20 years old.

Many oi companies will not deliver to tanks that are older than 20 years.

When people replace ASTs, if they plan to move within 5 years, they buy the cheapest tank and hence shortest warranty.

Sludge that generates on the bottom of a tank is corrosive.

If your tank is going to be staged outside or you are on an island, your tank is subject to harsher conditions and you likely should use a tank with a more extended warranty and one that would be more resistant to the elements, but people buy what they can afford.  Painting it is also a good idea, manufactures don’t paint tanks because people want them to match the building they are next to and because the tanks get scratched before they arrive on a site.

Tank Experts 888-301-1050

How to Prolong the Life of Your AST

Tanks typically arrive in a primer red color and so many of these tanks never get painted post-installation.  Paint your tank with weather-resistant paint.  Lighter colors are better than darker colors. That said, a black tank is subject to larger temperature swings than a light-colored tank, meaning more likely to develop condensation and if it's on an island salt air. Remember the tank has a vent so you are subject to moisture in the air. Horizontal tanks have a larger bottom surface area than horizontal tanks so water on the bottom has more surface area to impact, meaning rust.

Keep the environment where the tank is located as dry as possible.  Clearly outside staged tanks are difficult to control moisture, but indoor tanks can be managed.  Note the tank in the following photo, the tank looks pretty good but the two legs of the tank you can see are clearly rust-stained.  A dehumidifier in the basement would be a form of moisture control.

Maintain your oil tank. After you paint it, keep an eye on it, if you see rust forming, alight sand and a coat of paint will help prevent future rust on the exterior.

Keeping the tank near full will also limit the surface area inside the tank where moisture can cause corrosion.  Nothing gets younger, so even a new tank will become old and out of warranty, know the age of the tank and be prepared to replace the tank before it leaks.  Note the photo below of a cut-open AST, note the rust.   Moisture inside the tank as well as low sulfur fuel corrodes the tank. 

Why do tanks leak

Final note, if you have a heating oil AST that is no longer being used, get it removed.  The largest vessel on your property holds liquid (pools and hot tubs excluded).   These abandoned tanks take up space and will leak and the empty tank you thought you had, well when it leaks you will find that the tank actually had oil in it.

Tank Removal Costs - find out more about the costs of tank removals. 

Health Concerns with Mold Exposure

Mold emits spores and chemicals as part of its normal life cycle. Individuals near and around  Mold may exhibit health-concerning reactions.  These spores from Mold are microscopic and once airborne can be inhaled easily.  These spores may contain allergens and can cause serious irritation in the nose, throat, and respiratory tract. 

Common allergic reactions include but are not limited to:

• Sneezing
• Nasal Congestion
• Coughing
• Skin Rashes
• Asthma attacks
• Eye Irritation

In addition to allergens, mold can emit Microbiological Volatile Organic Compounds (MVOC’s).  These chemicals usually have a very strong and unpleasant odor and can be associated with that musty smell that many individuals equate to Mold.  These chemicals are released into the air and can also cause serious health concerns.

Common reactions to MOVC’S

• Headaches
• Nausea
• Dizziness
• Fatigue

Molds can also produce toxic substances called Mycotoxins.  Mycotoxins can be inhaled, ingested, or absorbed through the skin.  Mycotoxins are potent, toxic chemicals that can cause significant health problems.

Mycotoxins can affect the following:

• Central Nervous System
• Immune System
• Respiratory System
• Digestive System
  
  

Mold comes up quite often during a real estate transaction.  In some cases, Sellers have mold, didn't know that even had mold, and said they live with it and they have no health concerns.  There is a reason why mold is not federally regulated.  Health concerns regarding mold depend on the person themselves.  Mold is like peanuts, you may be allergic to mold but I may be fine. If the seller is fine with mold, the buyer may not be. 

Curren Environmental, Inc. can inspect your residential or commercial property, help define the cause of the mold and offer a solution with both mold remediation and mold prevention. 

For more information on Mold visit please visit Centers of Disease Control and Prevention.        

Buyer Beware when it Comes to Mold & Oil Tank

If you are buying a home, it may be your first or may be your third.  Either way the internet has no doubt made you a sharper consumer. You can assess the property online by evaluating photos, sometimes 3D tours of the home, school districts, past sale prices for the property and the neighborhood, property taxes, the list goes on.  No doubt you know how to google information. So you find the home, make an offer, it goes under contract and now your due diligence happens.  A home inspection, etc.  You are a savvy buyer so you look into other inspections you can do, Roof?, Mold? Oil Tank Sweep?  Yep, you do them all but guess what the seller has access to the internet as well, they may even be buying another home so they have concerns with inspections of their own.  But since they are selling they are also concerned with what you might find and the cost.

Be fair, if you had a buried tank at a home you were selling and you googled oil tank leak and the following photo popped up, how forthcoming would you be about the tank?  

True statements:

Sellers don't want to have to spend money to sell their homes.

Buyers, don't want to spend money on unexpected repairs, mold and oil tanks are top of the list. 

Both items are not covered by a home inspection, so while a home inspector may flag that the hot water heater needs to be replaced, they are not going to point out a $4,000.00 mold remediation.

The best advice we can provide is to be aware of what inspections are prudent during the home buying process.  

Regarding tank sweeps, they can be a lifesaver.  Tank Sweeps

Tank Nightmare aka property listed again with no mention of the oil tank

The contract of sale falls apart due to the oil tank.

The story goes that the owner selling their home finds that their old unused oil tank is not a selling feature so they decide not to mention it on the listing information.  Home goes under contract and out of guilt, sellers admit to an oil tank when asked.   Curren quotes the removal and the seller wants to know what happens if the tank leaks.    The seller decides not to remove the oil tank, this killed the deal.

Fast forward a few weeks, and the property is relisted, again with no discussion of an oil tank.    So now a seller is flat out forgetting a tank was known to exist (I don't say lie) and we get a call from a new buyer for the home and they want us to do a tank sweep.

Really, must we be the only straight-talking people?  Hey, this situation is easy to resolve, we remove the tank.

But how about the person who buys the house with a tank that was not disclosed (we found it for another buyer) and they get transferred with their job in a year and have to sell the home?

The anger, the lawsuits, heck the only happy people are the attorneys.   Happens again and again. Realtors if you are reading and if you know the listing has a tank and the buyers are not disclosing, you better disclose, I have a few realtors getting sued for this.  Email can be forever, people talk, buyers share bad news (ever hear of social media?), I am not going to say how each attorney researches facts,  to trace how someone knew something and didn’t disclose it or blankly fabricated an untruth, but it's much easier than you think.

Now to be fair we have been around for over 20 years, we touch thousands of sites a year and every so often we get a boomerang.  What is a boomerang?  A project we were involved with stopped dead in its tracks, Curren finds a tank, finds mold, finds contamination, the deal falls through, owner cancels the contract for tank removal/mold.  Ok it happens, we aren’t pushy, if the owner changes their mind they have our number.

Why talk about this, because buyer beware, I would rather consult for a buyer to interest BEFORE they buy a problem.

Why are we happy when we find a tank, find mold, or contamination for a buyer?   Because our client doesn't own the property yet, we did our job we found a problem and now this problem can be presented to the seller for correction.  Surely the seller doesn’t want to sell you an environmental problem costing thousands of dollars?    Sadly there is a % of people that will, many step up, but some sellers do not, hence you need for proper due diligence.  

When buying a home a home do your due diligence.

Tank sweeps?  Click here  Tank Sweeps

Mold Inspection Click here  Mold Inspections

Expert advice you can rely upon, that Curren Environmental.

Prior to buying commercial real estate, savvy buyers do their due diligence.

No one wants to buy a property that is devalued with environmental remediation costs. Hence, why you look before you leap, and do environmental due diligence such as Phase I.  But real estate being real estate, many buyers spend months if not longer trying to find the property that fits their needs, Failed sales and limited inventory can drive buyers to cut corners when they do indeed find a property they want to buy.

 How do you avoid environmental issues when buying a commercial property?   You do your environmental due diligence such as a Phase I Environmental Site Assessment.   But there are other forms of environmental due diligence you can do.

Many banks and the SBA will accept a Records Search with Risk Assessment (RSRA) in lieu of a Phase I Environmental Site Assessment (ESAs) for low-risk properties. An RSRA product is an expedited and inexpensive due diligence product that allows the lender to evaluate the environmental risk quickly.   The RSRA can determine if a full Phase I is required.  In short, not every property may warrant a Phase I.  Now that is not to say that doing a Phase I is not a good idea, it is actually one of the best ideas when buying property, but if you have a property that appears low risk or a short time frame, an RSRA can give you a quick snapshot of potential environmental conditions.    The map below shows a gas tank (GT) on a property,  this was found from the RSRA and drove the need for a Phase I or gives the buyer to step back from the purchase.

Curren Environmental is a leading providers of RSRAs for financial institutions and end users (buyers). Curren offers several advantages over our leading competition including:

• Inhouse personnel complete all work.
• We do thousands of due diligence evaluations every year, experience pays.
• During lockdown we remained open and busy, because real estate was moving

If the RSRA finds additional work is needed, we do that, Phase I,II & III.

Mold is a four-letter word and will bring out emotions in people.  Some rational emotions, some not so rational.  Compound that with the fact that when people have health concerns they blame mold as the source (sometimes correctly) of the health issues.   Unfortunately, there are no federal regulations for mold and only 11 states have mold regulations so the ability to deal with a "mold professional" is severely limited even for people in states that have mold laws.   What that means is, yes, you could get scammed with mold, but you could also get taken advantage of by a licensed contractor doing work on your home as well, you have all heard stories of contractors doing shoddy work or running off with deposit money.

We find that the issue with mold is it is rarely discussed rationally by companies.   By rational, we find that companies play off people's fears and emotions rather than address mold in a scientific fashion.  Meaning assessing why mold is present, (there is always a reason), assessing how far the mold has spread and then developing a scope to remediate. The above photo shows mold by an HVAC air vent.  Occupants of the office were concerned that mold is getting sucked into the duct and spreading throughout the office.  It had to be explained that the duct is blowing air out not in.   And no the duct was not filled with mold (ducts are metal 90% of the time and mold doesn't eat metal).   The cause of the mold was an air leak in the wall that caused moisture to mix with air from the duct forming a nice environment for mold growth on the surface in the photo.   A simple fix on the outside wall solved the issue.   But our advice 100% contradicted the company that said every room in the office was at risk (there were over 34 rooms on the floor.    We tested 20 of the rooms via air sampling to disprove the theory of widespread mold growth.   This is what I mean by rational vs irrational.  Oh, and rational saves money.

We are mold experts and have been for over 20 years.  We consult on mold, test for mold, remediate mold and teach classes on mold.  That said we can offer some free advice on the mold that could help you from being scammed.

First, if you feel like you are being taken advantage of, you likely are.  This comes from many people who we have helped after they had the suspicion they were not being treated fairly.

Second, in sales, a common tactic is to push a sense of urgency (to close the deal).  You have all no doubt experienced that when buying a car.   Well with mold if you are being scared by a company regarding mold, that is a tactic to push a sale.

Third,   this is the hard one, fact-check what you are told.   Since so few states have licensing for mold,  when an individual or company says they are licensed, verify it.   I work in NJ, DE, and NJ and cannot hold a state license in any of those states because none exist.  Nor do I profess to have a license in those states.   25 years of experience (thousands of sites remediated)  is more or less the foundation of our skill set.  And yes I would acquire a license if one becomes available.

Opinions (paid), and contracts for work should all be in writing clearly explaining what is proposed to be performed, the cost, and the duration of work.     Most states have consumer fraud protection where work is required to be in writing, this is not always the case.   As a general rule get it in writing. Such as someone saying mold is widespread and a large area needs remediation.  Ok if that is the case, why?  How did you determine that the situation was so severe?

Pro Tip

Anyone offering a free inspection is looking for work or should I say a problem.  They are motivated to find a problem because that is where they will make money.   Trust me the problem they find will be hyped, may not be much of a problem, and could even be a problem the owner could fix themselves.   The problem is if you do not pay for advice, there will be bias regarding the free advice you obtain.

To be clear, most people you are going to speak to about mold are not experts.   Even a company that does a mold inspection or mold testing likely does not have expertise in understanding the complexity of mold spores, growth, etc.     Case in point we got the following question from Houston, Texas.

Do I need particle count + spore samples, or just spore samples in the known areas where mold is apparent? The contractor with particle count quoted me a price but yells at me when I mention testing. The other contractor with the spore samples approach does not have specialized particle count equipment. He takes the approach that we know where we see/smell the problem, and once the spores are tested, we will know more about how to fix it.

Do you know what the person is asking?  There are only 4 sentences, so what you can derive from them is that mold is visible (EPA says testing is not required when visible mold growth is present).   So each party is recommending some form of testing, but why?   The question is what caused the mold growth? (this is important so mold doesn't grow back).    The next question is what will it take to address the mold?   Lastly, both contractors are saying to do different testing, what is not explained is that there are no Federal standards so what would the testing be compared against?

If you see visible mold, you should address it and its cause of it.   A qualified mold inspector and/or remediator can figure this out.  Doesn't look like either person involved is qualified. (yelling is never an acceptable form of communication.) 

Are there companies that do shoddy mold work, for sure like any other service you can get bad service?   Do you want expert mold advice?   Call Curren.

It has been a seller's market for a while now and some buyers have waived inspections.   Please note that even on "as is sales" and "no inspection offers", Buyers have been doing  Oil Tank Sweeps and even Oil Tank Testing as part of the Due Diligence you don't hear about.     The reason being the liability of a leaking tank is too great.

That said we have had people actually purchase homes with oil tanks, not realizing the liability associated with tanks.

What people don't understand is buried oil tanks rust and leak and this can occur for years while the tank is being used without the owner knowing.  People also didn't remove tanks when they stopped using them to both save money and avoid finding a problem.    So naïve people are buying homes with oil tanks finding they have leaked and are hoping that maybe $5,000.00 will solve the tank leak.  Truth be told, small tank leaks can cost $8000.00 to $15,000.00.

The photo below shows a tank leak that cost $34,000 to remediate.

The oil tank remediation below was $44,000.00

The remediation for this tank was only $12,000.00, not including landscape restoration.

The tank remediation below was about $130,000.00

Do you get the point?   Oil runs through the soil and when you have to chase after and remove it to remediate it, it can cost tens of thousands of dollars.  It boggles the mind a bit for sure but it's factual and oil tank leaks are a "known issue".  The Known Issue of oil tanks is well documented.  In a real estate transaction, your attorney, realtor, and most important the seller are likely aware.     We know because we get calls from all three groups regarding tanks and managing them in a transaction.

Do your due diligence and get a tank scan, whether you want to waive inspections or not, during your real estate transaction.  Do not waive the tank scan inspection.

Questions?  Call Curren. 

Black Mold, the most feared and vilified mold, isn't even a real mold.  Black mold is a name that was made up by the media and mold industry to invoke a response from you.  That's right, misinformation at its best. 

Do not buy into the Black Mold Myth.  If black mold was real, do you not think there would be other molds named after colors?   Like white mold, grey mold, and even pink mold, because those colors of mold all exist too.   There are no molds named after colors,  molds, for the most part, have hard-to-pronounce names, so having them named after colors would certainly make them easier to pronounce.   There are many different molds that are black in color and to have a mold identified, a sample goes directly to a laboratory where they look at the mold sample under a high-powered microscope for spore/fungal identification.  What does that tell you? Well, no one who looks at mold with the naked eye cannot tell you the spore type, just isn't possible (maybe they can guess).

How about when people want to know if the mold they have is Bad Mold?    Well, a bowl of mixed nuts would be the bad nuts for anyone allergic to nuts.   The same thing goes for dairy, if you are allergic to dairy, the dairy aisle of the supermarket is bad.  My point being is the mold that affects you, is the bad mold.  But let's be clear, Mold is not a benefit when found inside a home or building.

Now, this article will certainly not be looked upon favorably by the mold remediation industry, as they want people afraid, misinformed, and motivated to get the mold problem fixed.   I once gave a talk at a convention and spoke about how black mold is a misused term.  Well after the talk I had a gentlemen come up to me and asked why I would tell people that Black Mold was not real.  He was of the idea that scared people spend money and the term Black Mold Scares people.   I speak about incorrect perceptions of the environment all the time and I don't like people being misled by the term Black Mold.

To put mold into laser focus, if you have mold, you don't have a mold problem, you have a water/moisture issue.  Mold is the by-product of the water issue.     So when you remediate mold (mold removal is called remediation) you better fix the water issue or it will come back.  And yes, we remediate mold and have had to remediate sites where mold was previously remediated but the water issue was not resolved.

Now, I do not wish to ignore the health issue associated with mold.  The EPA considers mold an indoor air contaminant, and rightfully so.  You can inhale a live or dead mold spore and have a reaction from it.  Mold off gases when mold is growing this produces mycotoxins and microbial volatile organic compounds (MVOC).   You may say you smell musty odors, but you are really smelling this off-gassing mold metabolism.  These compounds can also have an adverse effect on your health.     So to be clear mold will adversely affect indoor air quality and while you may be mold resistant, we have seen people move into new offices and homes with mold and after a period of time, they find mold is affecting them.

Let me go even further into the mold.   I think we can agree that mold is not a selling feature for real estate.    If you have mold and there is an exposure pathway, meaning you are going to encounter it, (I give a pass to mold growing outside your home) the mold should be remediated.  I say should there is no law saying a home or office must remediate mold, but doing so is generally considered a positive thing.    The issue with addressing mold is the Standard of Service (SOS) you receive.   The rub with mold remediation is there are no federal laws regulating mold and at the time of this article only 11 states have mold regulations, so chances are if you have a mold problem you are in an unregulated state.  What does that mean?  It means that the company or individual you hire holds no state license and there is no SOS they must follow.  I say this because I live it. 

We get calls from all over the country regarding mold and entities they are dealing with and are less than satisfied. Complaints range from a company doing mold testing and not providing a written explanation of the test results. You see without federal regulation, there are no acceptable or unacceptable mold testing standards.   There are Industry standards, but oftentimes the company doing the work does not explain them or provide their interpretation in writing.  My belief is most people doing mold work don't know what they are doing and they get away with it because the client knows even less.

Remediation is a whole other ball game. 

How to read mold testing results.

A Mold Survey involves mold sampling for the presence or type of mold. Mold sampling is completed in two ways, mold surface sampling and mold air sampling. Mold surface sampling is completed on a surface that is suspected to contain a mold-like substance, this type of sampling can be completed by performing acquiring a mold tape lift sample or a mold swab sample. Both methods involve acquiring a sample of the mold-like substance and having the sample analyzed by a laboratory. Your results should determine the type and quantity of mold. The interpretation of sample results pertaining to mold concentration has to be evaluated objectively when the analysis finds mold as you are sampling an area that has a mold-like substance, which can typically represent the suspected highest concentration (worst area), otherwise, why would you sample that particular area. The other type of mold sampling is mold air sampling. Mold air sampling is accomplished by running air through a laboratory containing that that captures microscopic airborne particles (fungi). The sample container is then analyzed by a laboratory for mold type and mold quantity. The analysis can be studied for both viable molds, meaning the sample is studied to see if the mold spores grow or by non-viable meaning, it what is the overall type and quantity of mold found. Mold non-viable air sampling is more common as it has been established that mold spores alive or dead can be an irritant.

Once you have the laboratory analysis completed, you now have to discuss the results and what they mean. Unlike soil and groundwater samples where all states have specific government-established standards, with mold there are No Federal or State Agency established concentration standards (Maximum Exposure Limits- MEL) or threshold level values for airborne indoor mold or for surface sample analysis of mold. Therefore, if you suspect there is a mold problem and have air testing or surface sampling performed, there is no regulatory standard to compare your results against. Without government standards, there is no common industry standards standard. The reason that there are no standards is that setting exposure limits or MELs would be difficult for a variety of technical reasons, which include limitations in both mold surface sampling and mold air sampling techniques, individual variability in sensitivity to microbial exposure among the human population, the occurrence of different types of biological and chemical pollutants in the indoor environment and limited data on the exposure-response relationship in humans. In essence, it is difficult to say who will be affected by mold spores and at what concentrations it would take to affect different people.

Due to the lack of set government standards, the environmental consulting industry follows general principles when evaluating mold test results. On a basic level when evaluating mold air sampling data, the mold levels should be higher outside than inside. The idea behind this approach is that there are always more molds outside in the soil, mulch, plants, decomposition of organic matter, etc. outside. Aside from an indoor and outdoor comparative evaluation, you evaluate the test results for specific types of mold. This evaluation includes looking for common outdoor molds as well as molds that are more commonly found on moist building materials. Evaluation of these molds goes a step deeper by looking for so-called opportunistic molds (marker fungi), which are frequently found on long-term water damaged building materials. The presence of these molds can point to a long-term moisture issue. These opportunistic fungi include Aspergillus and Penicillium species, Acremonium spp., Sporobolomyces spp., Stachybotrys, chartarum, Memnoniella echinata, Tritirachium oryzae, Ulocladium botrytis, U. chartarum, Cladosporium spp., and Chaetomium spp. These are molds that are not typically recovered in the outside air, so when they are found outside, they are in generally low levels. Conversely, when they are found indoors these molds typically point to an indoor water issue. The higher the indoor concentration of these fungi the more likely a long-term water issue is present.

In summary mold testing and the interpretation of the analytical results involves the evaluation of individual types of mold you find and determining why they are present.

Finding the type of mold, while interesting it does not explain why it is present. Therefore, every mold survey and mold inspection should not just confirm the presence of mold but also why the mold present is, and what created the environment for the mold to grow. The backend of the mold testing and mold sampling project includes an inspection for the physical presence of mold as well as for water damage.

More common mold questions and answers can be found at: /Mold-Frequently-Asked-Questions

Buying or selling a commercial property?   If so,  you should know what a Phase I Environmental Site Assessment (ESA) is.   Phase I is a form of due diligence completed during real estate transactions. Buyers perform Phase I's to ensure they are not buying an environmental cleanup. Sellers also perform Phase I's to address any issues that would delay the sale and use it as a marketing tool when selling the property.  Properties with clean Phase I reports sell faster with no questions asked.

So what is the Phase I Process?

A Phase I Environmental Site Assessment (ESA) uses the protocols as set forth in the Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process (E1527-21), prepared by ASTM International.

Phase I Purpose

The primary purpose of Phase I is to document the inquiry of the environmental professional for All Appropriate Inquiries for the subject site. This practice is intended to permit a user (person paying for the Phase I) to satisfy one of the requirements to qualify for the innocent landowner, contiguous property owner, or bona fide prospective purchaser limitations on CERCLA liability (from now on, the “landowner liability protections,” or “LLPs”): that is, the practice that constitutes all appropriate inquiries into the previous ownership and uses of the property consistent with good commercial and customary practice as defined at 42 U.S.C. 9601(35) (B). The Phase I  report is not intended to be part of the site characterization and assessment with the use of a grant awarded under CERCLA Section 104(k) (2) (B). More specifically, the scope is intended to identify conditions indicative of releases or threatened releases of hazardous substances on, at, in, or to the subject site.

 Phase I looks into if any past and current use of the site, adjacent and abutting property, and nearby off-site operations have or have the potential to adversely affect the environmental quality of the subject site. The information contained within Phase I is obtained from the performance of a site inspection, the use of an environmental information service company, and face-to-face and/or telephone interviews with persons familiar with the Subject site.

The scope of an ESA is to identify Recognized Environmental Conditions (RECs) in accordance with ASTM E1257-21. In addition, Curren’s ESA shall include a visual evaluation or assessment of the following non-scope issues: asbestos-containing building materials (ACBMs), lead-based paint (LBP), radon, mold, and land use restrictions. No sampling was conducted as a part of this Phase I.

How is Phase I conducted?

Phase I is conducted by performing the following tasks:

• Physical site inspection
• Federal, State, and local regulatory document review and personnel contact
• Examination of aerial photographs, Sanborn historical fire insurance maps, topographic maps, etc.
• Geologic and hydrogeological data review
• A cursory inspection of adjacent properties

Phase I can be hundreds of pages long if no longer.   For ease of understanding Executive Summaries are included with each report so primary issues of concern can be easily accessed. 

Curren Environmental has over 25 years of experience performing Phase I Assessments. Call the Experts.

A 1031 exchange gets its name from Section 1031 of the U.S. Internal Revenue Code, which allows you to avoid paying capital gains taxes when you sell an investment property and reinvest the proceeds from the sale within certain time limits in a property or properties like kind and equal or greater value.

Not dissimilar to the photo below showing the progress of the famous tower, a 1030 Exchange can allow an investor to keep building up a real estate portfolio.   Unfortunately, skilling environmental due diligence on a commercial site can be a costly mistake when remediation is needed.

As a  real estate investor, a 1031 Exchange can allow you to leverage your investment in real estate.  In the environmental due diligence world, we find that 1031 Exchanges tend to skip over environmental due diligence, which places the parties involved at risk.     People need to understand, that the owner of the property =  the RP.  (RP = Responsible Party).  Even in situations where the seller agrees to perform the remediation, we have seen RP's disappear and regulatory agencies will also look toward the owner of the real estate. 

Generally speaking A Phase I Environmental Site Assessment should be performed for all commercial real estate transitions, including 1030 exchanges.    Learn About Phase I

Let's start with the appeal of the 1031 Exchange

First, it allows an investor to pick a new property that allows a greater ROI or diversify the portfolio of properties.

You can use the exchange to consolidate several properties into one asset or vice versa acquiring more properties in exchange for one more valuable one, possible for estate planning.

On an accounting basis, you can reboot the depreciation clock. Meaning rather than simply selling one property and buying another one the 1031 exchange allows you to defer capital gains tax, thus freeing more capital for investment in the replacement property.

That all sounds great right?  Well, the environmental rub is there are time frames for 1030 to execute and we are finding many people have skipped over doing environmental due diligence including Phase I, II & III.   The rub is all Phase I studies follow an outline established by ASTM.  ASTM updates the standard every 8 years.  Generally speaking, when a change occurs Phase I becomes more inclusive.    a Phase I from 20 years ago would be a faster read than one today.  So you can expect that today's Phase I will be more thorough.  

The oil that leaked from this previously sealed pit is now the owner's responsibility to address.

How do you protect yourself with a 1030 Exchange?

Real estate transactions are complicated and 1031 Exchanges add a short window to identify properties, which makes people cut corners.

1. Be savvy and have your environmental consultant evaluate the potential sites.  You can start with a cursory environmental evaluation to find any red flags, you don't always have to do a Phase I.  You can do a Records Search with Risk Assessment (RSRA): Which is where an environmental professional obtains, reviews, and summarizes an ASTM 1527-21 compliant database for the noted property and the surrounding one (1) mile. The review will focus on any pertinent listing for the Subject Property as well as any surrounding properties which could pose a potential Recognized Environmental Concern (REC). The environmental professional will also perform a reconnaissance of the Subject Property. (Access to interior building areas must be granted.).   RSRA's can be converted to Phase I after the decision is made to pursue the property.  RSRA's are helpful if you are evaluating multiple sites but only plan on acquiring one of them.  Now an RSRA is not a substitute for Phase I but rather a way for an investor to evaluate multiple properties without fully committing to Phase I.
2. Of course, you can also perform a Phase I for the target property.   Savvy investors will get the target property owner to share the cost of the Phase I which will allow both buyer and seller to retain rights and use of the report, in case the 1031 Exchange does not go through.
3. You can also have the owner perform the Phase I as a condition of your acquisition.   Hey to be fair, the property is going to need to have a Phase I for any buyer and many sellers contract for the Phase I to help expedite sales, even before the property is listed for sale.   Realtors take note, properties with a completed current Phase I go to settlement faster.  Buyers can always have the Phase I peer reviewed by an environmental professional.  Curren Environmental peer reviews a few hundred Phase I reports every month, so this is not uncommon.
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5. At this point we hope you have a bit more knowledge about Environmental and 1031 Exchanges.  Want to know more?  Call an environmental professional.
   

Pro Tip:  Curren Environmental has been doing Due Diligence for close to three decades (Yea we are old).    When you need a Phase II, well we just pivot and come back to the site with some of our equipment. 90% of other companies call a subcontractor which adds cost and time.