You’re considering purchasing real estate somewhere in New York. You’ve been told you need to conduct a Phase 1 environmental site assessment (ESA) before moving forward. That’s just great, another rule that requires you to spend money and waste time. Is this really necessary?
In a word, yes.
Before you enter any property purchase transaction, you want to know you’ll be designated an “innocent landowner,” meaning you had no reason to believe your property was contaminated. This alleviates liability for corrective measures, potential fines, ongoing regulation.
Innocent landowner status protects you from what could turn into a very expensive and time-consuming investigation and remediation process that will involve oversight and participation from several state and federal, perhaps even local, agencies. If this happens, it will essentially put you in business with the government. And your public reputation will undoubtedly suffer.
It’s likely your lender will require a Phase 1 environmental site assessment anyway, because it can also protect them.
The investigation represents time well spent.
It takes just two or three weeks, the cost isn’t onerous, and you don’t even have to hire a certified investigator.
However, the results matter significantly. Your decision to buy could turn on what’s found, and you certainly don’t want to miss something that could cost you later on. So it makes sense to hire a professional engineering firm experienced in working with environmental issues.
They’ll cover all the necessary bases to discover known or probable concerns, including contaminated fill material which is a special concern in New York City. They will:
They’ll report back to you. At this point the information is private, to help you make an informed buying decision. You may get an “all clear,” you may want to leverage problems to negotiate a lower price or other considerations, or you may decide to simply drop it and move on.
When it comes to possible contamination, risk management should be your foremost consideration, so it’s just not prudent to skip a Phase 1 environmental site assessment. Besides, the investigation will tell you far more about the property than you normally would have learned in a typical real estate transaction. And that can only benefit you.
Photo Credit: Paragon Properties