The earlier a buyer or commercial lender starts the environmental due diligence process, the more time they will have to examine all options to fairly allocate the liabilities identified by the Phase I Environmental Site Assessment. Subsequently, the parties will be in a better position to draft indemnities, determine appropriate environmental escrow amounts, and modify the Purchase Agreement. Of course, having a competent real estate attorney on retainer to monitor the process is always a good idea.

If your property acquisition is going to be financed then involve your lenders early.  The credit analysis process and appraisal period can be quite time-consuming. This way, if environmental issues do arise, they (and their own attorneys) can participate early and are less likely to arrive the day before closing with unworkable demands that delay your transaction. Moreover, time your real estate acquisition early to avail yourself of any possible tax advantages.

As part of your Phase I Environmental Site Assessment, require your environmental professional to include “non-scope” environmental concerns described in the ASTM standard practice such as non-tidal wetlands, lead-based paint (LBP), asbestos-containing building materials (ACBMs), mold, and others. Although not CERCLA liability concerns, these environmental conditions can limit or restrict the use of a given property and represent a potential liability.

Among the best strategies to avoid environmental liability is to retain the services of a competent, experienced real estate attorney. Because your attorney is keenly familiar with real estate law and can offer an objective opinion, they will provide sound advice and guidance through the due diligence process. Many discovered environmental conditions and concerns can be managed “across the settlement table” contractually. Don’t go it alone.

Be aware if the state where your property is located may be subject to any transfer statutes. Among others, New Jersey, Connecticut, and Indiana have statutes requiring responsible parties to provide formal, legal disclosures and either remediate or provide for the remediation of contaminated properties prior to transfer. This is another occasion where the assistance of a real estate attorney is strongly advised.

Do not rely solely on current Phase I Environmental Site Assessment reports. Read old environmental site assessment and testing reports that may be available. It is important to understand the property’s environmental history within the context of the passing decades. Moreover, old reports may provide the rationale for response actions and remediation projects. Store all your environmental reports and documents as you may need them many years later.

Like all people, environmental professionals may make minor errors from time to time. Judge your environmental professional based on how they respond to correct matters. The only real difference between companies is how they treat their clients. Integrity is doing the right thing…even when no one is looking (C.S. Lewis).

Refuse to hire the cheapest environmental professional. Hire the best professional for the job who offers a reasonable cost for quality work on your behalf. You’ll soon forget how cheap a consultant was when they make a negligent mistake. Your Phase I Environmental Site Assessment is a legal document because it establishes your position as an innocent landowner. It’s not the time to look for a bargain.

Underground storage tanks (USTs) are the number one source of environmental liability on real property.  When reviewing your environmental professional’s Phase I ESA report, focus extra attention on current and potential historical USTs on-site. Your environmental professional should have reviewed fire insurance maps, permit records, and other municipal records to locate USTs long forgotten (but still buried on your property). There is no inexpensive way to manage a leaking UST.

Absence of evidence is not evidence of absence. Just because no releases have been reported or appear in environmental regulatory records on your property does not mean your property is contaminant-free. Millions of unreported releases exist…and have just not yet been discovered. New releases are discovered daily in the U.S. Does your property have a discovered recognized environmental condition (REC) that should be evaluated further?