You may not need to perform a Phase 1 site assessment if you’re considering purchasing real estate in New York. But why would you not want to?
Sure, there’s some time and cost associated with conducting this investigation, but they aren’t onerous and you’ll get information and gain insight that can help you be a smarter buyer and a smarter property owner going forward.
Learn more about the property.
The Phase 1 site assessment is the chemical version of a conventional property inspection. Whereas the usual inspection looks at whether buildings are physically safe, potential insect damage, etc., the Phase 1 site assessment looks for hazardous waste or other contamination that could become your clean-up responsibility if you purchase the property.
This evaluation is the most valuable when you hire a professional environmental engineering team to perform the study. They have the engineers, geologists and hydrologists needed to expertly examine the property and any existing structures and help you evaluate results. They’re specifically looking for contamination, but they could uncover other undisclosed problems you’ll want to know about.
Learn about the property’s history.
Phase 1 site assessment includes research into past records and other documents and interviews with owners and tenants, etc. that wouldn’t normally be conducted as part of a title search or standard due diligence process. This could also uncover information directly pertinent to your purchase, or at the very least interesting to know.
Double-check that seemingly low purchase price.
If you’ve been offered a tempting price, don’t assume it’s due merely to the still-weak real estate market. It could reflect known problems that could cost you later on.
The ultimate goal is protecting yourself from future liability.
Information gleaned through a Phase 1 site assessment can help you secure “innocent landowner” status. That spares you responsibility for clean-up of contamination discovered later on by confirming you had no reason to know the property was contaminated when you bought it. You get legal protection and confidence in knowing what you’re buying.
Phase 1 site assessment gives your more information and protects you. If there are significant risks associated with purchasing this particular property, you want to know before you buy.
Photo Credit: USACE