Real Estate Due Diligence

Real estate due diligence assessments have become a necessary step for lenders, property owners, and prospective buyers to determine potential environmental liabilities associated with real estate transactions. The general approach recognizes two phases of environmental assessments.

Phase I Environmental Site Assessments
A Phase I assessment is usually conducted when a general review of the property is required and there is no reason to suspect the presence of hazardous materials, either on the site or in the building which may occupy the property. The Phase I assessment may include:
  • Search of official records indicating past uses and ownership of the site;
  • Review of current operations at the site and chemicals which may be utilized or produced;
  • Investigation of regulatory agency records to obtain copies of permits, violations and similar documents. This will include any underground storage tank, which may be present.
  • Interviews with existing and past owners, tenants, neighbors, etc.;
  • Obtaining copies of site maps and aerial photographs (if available);
  • Review of information on water table, nearby water wells and water quality results;
  • Review prior geological or hydrogeological studies for the site or neighboring sites.

Phase II Environmental Site Assessments
Based on the final results of the Phase I assessment, and visual observations, an informed judgment can be made as to the potential for significant environmental concerns as well as the need for additional assessment.

A Phase II assessment is the follow-on action to a Phase I assessment which has raised potential questions concerning possible contamination. Tasks may include:
  • Inspection, sampling and analysis of buildings for asbestos-containing building materials and radon gas;
  • Leak testing of underground storage tanks. If found leaking, borings around the tanks to obtain samples for analysis;
  • Obtaining and testing samples of groundwater from the site, if at shallow depths, or from nearby wells;
  • Soil sampling, including borings to depths as required, and analysis for the presence of hazardous materials, which have been utilized on or near the site. Sampling may be repetitive until the nature and extent of the contamination plume have been defined;
  • Other sampling, testing and analyses as may be warranted.

Other Real Estate Assessment Services
ETS has performed Transaction Screens and Preliminary Environmental Screens for numerous clients. These screens can be customized for each client and are typically used for properties with little potential for environmental liabilities. Please contact us for more information on environmental screens or to request a proposal.