Protect your commercial real estate investment with a Environmental Due Diligence.
Environmental due diligence is an important process that helps with identifying and evaluating potential environmental risks and liabilities associated with a property or business, primarily in a commercial real estate scenario. This process is typically conducted prior to a real estate transaction or merger and acquisition to ensure that the buyer is fully aware of any environmental issues that may exist on the property.
Environmental due diligence involves a thorough assessment of the property or business, which may include reviewing historical data and records, conducting site inspections, and performing environmental testing and analysis. The goal of the assessment is to identify any potential environmental risks, such as contamination from hazardous materials, or the presence of endangered species or wetlands.
When the assessment is complete, the buyer can then make an informed-accurate decision about whether or not to proceed with the transaction, and if so, what steps may need to be taken to mitigate any environmental risks or liabilities. Ultimately, environmental due diligence helps to protect both the buyer and the environment, by ensuring that potential environmental issues are identified and addressed before they become a problem.
Potential Environmental Conditions an Environmental Professional Might Identify for a Property.
Recognized Environmental Condition (REC) - defined by ASTM as “(1) the presence of hazardous substances or petroleum products in, on, or at the subject property due to a release to the environment; (2) the likely presence of hazardous substances or petroleum products in, on, or at the subject property due to a release or likely release to the environment; or (3) the presence of hazardous substances or petroleum products in, on, or at the subject property under conditions that pose a material threat of a future release to the environment."
Historic Recognized Environmental Condition (HREC) - defined by ASTM as “a previous release of hazardous substances or petroleum products affecting the subject property that has been addressed to the satisfaction of the applicable regulatory authority or authorities and meeting unrestricted use criteria established by the applicable regulatory authority or authorities without subjecting the subject property to any controls.”
Controlled Recognized Environmental Condition (CREC) - defined by ASTM as “a recognized environmental condition affecting the subject property that has been addressed to the satisfaction of the applicable regulatory authority or authorities with hazardous substances or petroleum products allowed to remain in place subject to implementation of required controls (for example, activity and use limitations or other property use limitations)."
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Business Environmental Risk (BER) - defined by ASTM as a “risk that can have a material environmental or environmentally-driven impact on the business associated with the current or planned use of commercial real estate, not necessarily related to those environmental issues required to be investigated in this practice.”
De Minimis Condition - defined by ASTM as “a condition related to a release that generally does not present a threat to human health or the environment and that generally would not be the subject of an enforcement action if brought to the attention of appropriate governmental agencies.”