05:07
Faizan
Environmental due diligence refers to real estate and property transactions. For example, an investigation may reveal the presence of soil or ground water contamination. This could mean serious liabilities for anyone that is involved with the property. Owners could face major financial losses as well as legal troubles that could result in huge fines or even incarceration.
Without environmental due diligence, contamination on a property may not be known before a real estate transaction occurs. The Environmental Protection Agency may step in and start enforcement actions on the owners of the property. Things can get complicated very quickly with regards to the criminal and civil liability as well as the financial burdens associated with contamination.
Recently a company removed about 100 yards of contaminated soil from an old gas station site so they could put up a convenience store. Apparently they followed the correct procedure except they failed to notify the Department of Environmental Protection before the fact. For this delay in notification, the company was fined 15,000 dollars. That is a hefty fine for being late with your homework!
CERCLA signifies the Comprehensive Environmental Response, Compensation, and Liability Act, but it is more frequently referred to as Superfund. This law established a tax on certain industries that could release or spill hazardous substances. The taxes went into a trust fund earmarked for cleaning up hazardous waste sites. These came to be known as Superfund sites.
Since CERCLA was enacted on December 11, 1980, environmental due diligence became a primary tool used to reduce the risk of property ownership. An owner or manager of a property could incur liability due to environmental contamination of the area. It is important to understand the potential liability that could be imposed by federal and state regulations on both parties of a real estate transaction.
Environmental due diligence typically involves a Phase I ESA or Environmental Site Assessment. This involves a complete review of all permits and records of compliance as well as any regulatory files from the government. Title searches dating to 1940, historical and geologic reviews using topo maps, aerial photographs and other documents. Stained soil or rusty drums may indicate serious problems.
Without environmental due diligence, contamination on a property may not be known before a real estate transaction occurs. The Environmental Protection Agency may step in and start enforcement actions on the owners of the property. Things can get complicated very quickly with regards to the criminal and civil liability as well as the financial burdens associated with contamination.
Recently a company removed about 100 yards of contaminated soil from an old gas station site so they could put up a convenience store. Apparently they followed the correct procedure except they failed to notify the Department of Environmental Protection before the fact. For this delay in notification, the company was fined 15,000 dollars. That is a hefty fine for being late with your homework!
CERCLA signifies the Comprehensive Environmental Response, Compensation, and Liability Act, but it is more frequently referred to as Superfund. This law established a tax on certain industries that could release or spill hazardous substances. The taxes went into a trust fund earmarked for cleaning up hazardous waste sites. These came to be known as Superfund sites.
Since CERCLA was enacted on December 11, 1980, environmental due diligence became a primary tool used to reduce the risk of property ownership. An owner or manager of a property could incur liability due to environmental contamination of the area. It is important to understand the potential liability that could be imposed by federal and state regulations on both parties of a real estate transaction.
Environmental due diligence typically involves a Phase I ESA or Environmental Site Assessment. This involves a complete review of all permits and records of compliance as well as any regulatory files from the government. Title searches dating to 1940, historical and geologic reviews using topo maps, aerial photographs and other documents. Stained soil or rusty drums may indicate serious problems.
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