So you’re a prospective purchaser of commercial property and your realtor or banker recommends you retain an Environmental Professional to prepare a Phase I Environmental Site Assessment in California.
As the soft costs add up, you are probably asking yourself whether this additional step is worth your while. After all, aren’t the previous owner’s problems just that? Why should you care about what happened at the site under previous ownership?
It turns out that you should care. Past activities can come back to haunt current owners. State and Federal environmental protection agencies have the discretion to deem new owners responsible for past acts in the interest of protecting the environment. Furthermore, your actions as the new owner of a contaminated property could exacerbate the problem making you partially responsible.
Under Federal Law, there are some liability protections for a prospective purchaser so long as due care is taken prior to purchase. But while so-called “third party defenses” can provide protections in federal cases, the State of California has the ability to bring a case against anyone deemed to be either an owner or user of a property. Environmental laws impose “strict, joint and several” liability, meaning that anyone deemed liable either in whole or in part can be responsible for the entire cleanup regardless of how many potentially responsible parties may be identified. In addition, liability may be applied retroactively for acts that happened in the past.
The Phase I process, or “All Appropriate Inquires” is a way to demonstrate due care and ASTM E1587 provides a standardized framework for the assessment. During a Phase I, we examine the historical and current uses of a property in order to assess the likelihood of a recognized environmental condition. We look at the historical uses of both the property and its neighbors as well as their current conditions. Then we prepare a report documenting our findings and making recommendations for whether, in our opinion, additional investigation is recommended. We do not make those recommendations lightly. Our clients’ concerns are foremost in our minds as we try to bridge the divide between your budgetary concerns and minimizing risks you might incur.
And that opinion is the linchpin of this process. You need your environmental professional to have the experience required by the ASTM standard so that you can trust they’ve accurately described the level of risk you might be facing. If you perform a Phase I that does not meet the All Appropriate Inquiries standard it will not protect you from liability. If a property winds up in environmental litigation, a substandard Phase I provides no protection whatsoever. The qualifications of your environmental professional are critical to reducing your risk. You need to have confidence in their ability to decipher the sometimes subtle and vague signs and to accurately evaluate their relative importance. Taking this additional step, could save you many thousands of dollars.
Let the Phase I be one step in realizing your goals for your new property. LACO can package planning services for permitting and zoning changes, civil engineering for land development, and geological services for geohazard analysis or septic design. For further information, or to schedule a meeting with us to discuss your next steps, please contact Christine Manhart at (707) 443-5054 or [email protected].