Go to your doctor and no matter how healthy you look, they take tests. Go to the dentist, and you get x-rays. Regarding environmental issues again you need to test to verify nothing is present. If you do not test you have a 100% chance of not finding anything.
Environmental Due Diligence is meant to protect a purchaser, commercial due diligence starts with a Phase I and can lead to a Phase II (testing), which while buyers are aware a Phase II is a possibility, it can also find a problem, so why do a Phase II if finding something is not 100% certain?
The map below which is from the 1940's shows an auto sales storefront in a downtown area. It lists a 550 Gallon Gasoline UST in front of the building. Today there are retail stores with a coffee lunch spot. Really zero current evidence of anything automotive or gas tank related. So, say you want to buy the property. Do you assume the gas tank is not there anymore? No, you scan the area by completing a GPR Survey to make sure it's gone and if it's still there you have owner remove the tank.
How about below, a then and now photo? Are the tanks still there? Do you think if the gas tanks leaked, and you owned the property you would be responsible?
What if you find that the tank is gone, well you now take soil samples to make sure there is no residual contamination. And yes if contamination is found, the property owner owns the problem.
People suspect a building component contains asbestos based on appearance and age of building, but you do not know 100% unless you test. When you are doing a risk assessment or any other form of environmental due diligence, you would assume the component contains asbestos until proven otherwise. The same goes for PCB's in an electrical transformer. Assume it contains PCBs until it is labeled otherwise. So, while a property owner wants to believe these is no contamination, a buyer can't rely on that belief. Hence the need for a Phase I and sometimes a Phase II which includes testing.
A case in point an older manufacturing plant (40 years) had a large outdoor compressor. The compressor at time of sale was only 5 years old, nice and new. But as an environmental consultant we ask what about the old compressor. The issue with compressors is they can spit oil and older compressors were known for this. A REC in the Phase I would be to do a Phase II with soil testing around the 4 sides of the new compressor to look for residual oil from the old compressor. Yep that is how it works.
We had a group looking to buy a large corner property that had commercial operations in 1930's that could contaminate the property. The buyers were excited to buy the property. From decades of experience, we recommended testing prior to purchase. Their response is below
Thank you for submitting a proposal for our project. As you may know, your company is one of only a few that recommend taking soil samples for analysis. Obviously, once the analysis is completed, the results would need to be disclosed. Shouldn’t a property owner be concerned that these soil samples might uncover a problem that would need to be addressed further?
Our answer is yes if you find contamination it is reportable and the responsibility of the current owner to pay for. So there are reasons why a property owner may not want to have a buyer do testing.
If you are buying or selling real estate you need an experienced environmental consultant 0n your side, call the experts
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