An environmental site assessment is often performed on a property to show that due care was exercised in determining if any environmental impairments exist. The assessment can help prevent parties from becoming involved in contaminated property and work as a defense to liability. It is often requested by a lending institution, developer, or a potential buyer. The assessment is commonly performed in phases, such as Phase 1 or Phase 2.
A Phase 1 environmental report is requested first to determine if any potential environmental problems exist at or near the subject property that may cause impairment. This consists of a visual inspection of the site and an inspection of any appropriate documentation. Phase 2 is the Testing phase. Phase 3 is the Mitigation Phase, where the contamination is removed or mitigated.
There are no federal regulations that define what an environmental assessment must include. However, one of the most accepted industry standards is provided by the American Society for Testing Materials International.
A federally funded project requires that an environmental impact statement (EIS) be performed. These statements detail the impact the project will have on the environment. They can include information about air quality, noise, public health and safety, energy consumption, population density, wildlife, vegetation, and need for sewer and water facilities. Increasingly, these statements are also being required for private development.
Disclosure of Environmental Hazards
State laws address the issue of disclosure of known material facts regarding a property’s condition. These same rules apply to the presence of environmental hazards. A real estate licensee may be liable if she should have known about a condition, even if the seller neglected to disclose it.
