Examining Due Diligence Expenses

3 Tips to Save Big on Environmental Assessment

You're in the process of purchasing a property and found a "great deal" on the Phase I Environmental Site Assessment (ESA) required by your lender. Great! But, now the list of Recognized Environmental Conditions (RECs) has resulted in a $15,000 Phase II ESA proposal. Not great.

Here are 3 tips to consider when facing Phase II ESA recommendations.

1. Shop Around

Some consultants may use the Phase I as a loss leader into prospective Phase II and BEA/Due Care projects. But, you're not bound to the consultant that completed your Phase I ESA! Use this to your advantage, and make sure that their Phase II scope is in line with your interests, concerns and plans for the property. It pays to get a second opinion.

2. Plan Ahead

Don't think you have enough time during your inspection period? (You might be right!)

First, plan ahead - especially on a property with a long, or colorful, history. Negotiate a due diligence period of at least 30 days to allow plenty of time for a 3-week Phase I ESA and avoid built-in expedited turnaround fees.

Second, consider a local firm with the equipment and capability to complete commonly recommended Phase II activities i.e. Ground Penetrating Radar (GPR), concrete coring, drilling, soil/groundwater sampling, etc. The flexibility of in-house scheduling is invaluable in accommodating timelines. (Keep in mind that Phase II sampling must be completed within 45 days of ownership or occupancy).

Third, consolidate efforts. The right firm can collect geotechnical (soil buildability) data during Phase II ESA drilling activities, and even assess for typically "non-scope Phase I ESA considerations," like asbestos and wetlands. Talk to your design and construction team about upcoming data needs and share those with your consultant during the Request for Proposal.

3. Don't Forget about Due Care

Once you authorize the Phase II ESA, a Baseline Environmental Assessment (BEA) and documentation of Due Care Considerations may be on the horizon if the subject property is deemed a "Facility" under State law. Be prepared for this added expense; but, keep in mind that the BEA report can now be submitted to the State after closing, and Due Care documentation is kept "in-house" and is no longer required to be submitted for State approval.

Attention owners of BEA parcels! Did you know that the State of Michigan Department of EGLE can (and will) review older BEA reports for potential Vapor Intrusion concerns? If your BEA and documentation of Due Care Considerations are older than 2013 and have historical Volatile Organic Compound (VOC) contamination, your Due Care Plan may be out of date.

Our Expertise

Gosling Czubak has decades of environmental assessment experience, and the capability in-house to complete the commonly requested Phase II activities referred to above. We can control and schedule our GPR equipment and ATV or truck mounted drill rigs to meet your needs. Contact us to learn more, we look forward to serving you!