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Environmental Due Diligence
In today's climate of environmental awareness, it has become necessary for landowners, potential buyers, lessee/lessors, and lenders involved in real estate transactions to protect their investments legally, economically, and environmentally. Commercial and industrial properties have the potential for incurring environmental liabilities resulting from current or past site contamination or migration of contaminants from adjacent properties. Potential risks associated with contaminated properties include decreased property value, limited site use, negative publicity, toxic tort claims, and regulatory enforcement actions and penalties.
Both the Federal Superfund Act (CERCLA) and its equivalent state law (Health and Safety Code) can make owners and/or operators of property legally and financially responsible for environmental restoration. According to CERCLA, an innocent owner of contaminated real estate may be exempt from certain liabilities if he had no knowledge of the contamination at the time of purchase and conducted an "appropriate inquiry" into the "previous ownership and uses of the property...". Since the statute is vague on what constitutes an appropriate inquiry, the buyer is left with certain potential risks if no formal environmental assessment is conducted to establish that they have been duly diligent in looking for potential environmental impact.
Kahl Environmental Services routinely performs Phase I Environmental Site Assessments to provide potential and existing responsible parties with a thorough understanding of possible environmental liabilities.
Some of our due diligence services include:
- Phase I Assessments - Performed to insure against the transfer of environmental liability. KES personnel have performed Phase I assessments on sites ranging from single family residential properties to large commercial centers and industrial facilities. KES' standard methods follow ASTM standards (Designation E 1527-94) for assessment of commercial real estate.
- Pre- and Post-Lease Inspections - Performed before leasing to protect the prospective lessee from assuming responsibility for existing environmental impact and, after leasing, to protect the landowner from assuming the former tenant's environmental liability.
- Tenant Audits - A facility audit is performed on behalf of a landlord to ensure that best management practices (BMPs) are being implemented by the tenant. This type of audit is usually conducted for dry cleaners, print shops, and automotive service facilities to ensure environmental liabilities are not being created from on-going operations.
KES provides research and consultation on most environmental issues involving property transfers, property refinancing, and tenant usage. Attorneys, property owners, real estate professionals and others working with transfer of commercial real estate value KES' professional insight.
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