Does your property need an environmental assessment?

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Our team explains why and when you should conduct an environmetal assessment on property.

Buying property is an exciting… and overwhelming… process. With everything to do, it’s no wonder an environmental assessment might be the last thing on a buyer’s mind. Therefore, we thought we would answer a few simple questions: Why are environmental assessments so important? How do I get one? What happens if my property receives a bad report?

What is an environmental assessment?

An Environmental Site Assessment, or ESA, is an investigation into your property to identify any potential environmental issues. When you get an ESA, a licensed environmental expert will check for abnormally high levels of soil, air, and water pollution on and around the property. The assessor will also research any past and present uses of the property. For example, if the property was previously as a gas station, that could cause some serious problems when you break ground.

Why do buyers need an ESA?

Aside from the fact that many banks require an ESA to secure financing for your property, having an ESA is a good idea for many reasons. As a buyer, you always want to be an informed consumer—before you make an investment into a piece of property, you want to know what you’re getting.

However, a piece of contaminated property can create a host of problems for a new owner:

  • Environmental contamination can cause the value of your property to decrease dramatically;
  • Buyers can potentially be liable either to the government or to private parties for any adverse effects and for the cleanup of any contamination.
  • This potential liability could lead to ongoing and expensive litigation.

Given the risks and costs associated with purchasing environmentally compromised property, it really is in the buyer’s best interest to obtain an ESA.

What to do if your ESA shows contamination on the property

Discovering contaminated property is not an ideal situation, but it does enable you to make an informed choice as a buyer. A buyer who receives a bad ESA can always choose not to go through with the purchase of the property. In the alternative, if they do choose to continue with the purchase, a questionable ESA should open the doors for re-negotiation with the seller.

While an ESA may seem like an unnecessary expense for a buyer, it’s a valuable tool that helps the buyer avoid potential liability and make an informed choice about their investment.

Submitted by: Hannah Garrett



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