Do Your Due Diligence
The purchase of any property can be an exciting event whether it’s for personal use or for taking the next big step with your business. Unfortunately, as with any investment, new properties can carry a certain level of risk. Environmental issues at a property, formally known as Recognized Environmental Conditions (RECs), can originate from the current owner’s use of the property, the past or current uses of neighboring and nearby properties, or even activities that occurred at the property more than a lifetime ago.
As a caution, if a property is purchased without first being assessed, an unassuming buyer could become the owner of not just a new piece of property, but also an unwanted environmental hazard. Fortunately, there is a well-defined process known as a Phase I Environmental Site Assessment for prospective buyers to complete their due diligence and determine if a property may be contaminated.
Phase I Environmental Site Assessments (ESA) performed by Point Blue follow the procedures detailed in ASTM Standard E1527-21. As part of a Phase I ESA, Point Blue provides a comprehensive historical summary of the property and adjoining properties, as well as an assessment of property’s current condition and use. Every Phase I ESA is unique and vital, as are the histories of the properties that are uncovered during the process. These assessments can either conclude without needing any further environmental assessment or recommending additional next steps.
If an REC is identified, especially at former gasoline stations or industrial properties, there is a process for addressing these concerns. Point Blue can assist with the next steps, including a Phase II Environmental Site Assessment. Phase II's are a more exploratory step that might include soil, groundwater, and soil gas sampling at the property to confirm the presence or absence of on-site contamination. Please look for our upcoming blog post that details options and next steps if contamination is identified on your property.
Point Blue navigates environmental needs associated with property transfers for our clients by focusing on environmental assessments, primarily Phase I Environmental Site Assessments, in accordance with ASTM E1527-21 to satisfy All Appropriate Inquiries (AAI). Point Blue performs comprehensive environmental site assessments to support development, real estate transactions, and financial loans (including financing and refinancing). In Michigan, this process is also a required element of a Baseline Environmental Assessment (BEA) for liability protection.