DUE DILIGENCE Presented at Lydia Work, Senior Chemist Licensed Remediation Specialist Triad Engineering, Inc.
due dil i gence appropriate carefulness: the degree of care that a prudent person would exercise, which is a legally relevant standard for establishing liability
What do I get? ENVIRONMENTAL STUDIES ARE NO DIFFERENT Knowledge if environmental issues are associated with a property. Limitations for redevelopment. What are the risks and costs? Innocent Landowner or Bona Fide Purchaser Defense Required in today s economy (banks, public perception, future buyers/users) An environmental due diligence investigation can be any one of the following types of investigations. Environmental Transaction Screen Assessment Phase I Environmental Site Assessment Phase II Environmental Site Assessment
Transaction Screen Assessment (TSA) Performed on low risk or low value properties (condos, retail, etc.). Screening process using checklist. TSA includes: Site visit, checklist, regulatory database review, interviews, agency letters, small report. Does not include history review of property. May trigger a Phase I or II ESA. Does not provide you CERCLA Liability Protection. Typical Costs - $900 - $1,500. One to two weeks to complete.
Phase I Environmental Site Assessment (Phase I ESA): Performed on unknown or riskier properties (industrial, gas stations, dealerships, auto body, commercial, etc.). Performed to assess recognized environmental conditions (RECs). Also will identify de minimis conditions & business environmental risks (BER). Phase I ESA includes: Site visit, regulatory database review, historical review (aerials, Sanborn fire insurance maps, historical topos), agency letters, file review, interviews, full comprehensive report. May trigger a Phase II ESA. Does provide CERCLA Liability Protection. Shelf life of 180 Days or 6 months. Typical Costs - $1,500 - $2,500 Two - three weeks to complete.
Phase II Environmental Site Assessment (Phase II ESA) Performed when a TSA or Phase I ESA identifies a REC. Or, when a data gap cannot release a property from business risk. Soil Investigation - Soil Borings with Soil Samples (surface & subsurface). Surface Water or Groundwater Samples. Vapor Intrusion Investigation. Hazardous Materials Survey (ACMs, LBP, Mold, Chemical Inventory). Typical Costs - $2,500 - $20,000 + Two six weeks to perform.
The degree and kind of due diligence vary for different properties and differing purposes.
Developed Types of Properties Urban (City) Not all Urban properties are bad Rural (Country) Not all Rural properties are good Undeveloped Urban (empty lot) Rural Underutilized Properties Typical Farmland Former Agricultural Farmland Orchard
Commercial Properties Developed Potential Issues USTs & ASTs Asbestos-Containing Materials Lead-Based Paint Mold or IAQ Issues PCBs Abandoned Chemicals Universal Wastes
Undeveloped Non-Commercial Properties Undeveloped Potential Issues Wetlands Former Orchards Agricultural Chemicals Illicit Dumps
UNDERGROUND STORAGE TANKS (USTs) Common to Commercial and certain Residential properties Sources & Use Fueling Stations - (Gasoline, Diesel, Kerosene, Used Oil, or Hydraulic Oil). Former Dry Cleaner - (Solvent). Auto Body Shop (Used Oil, Hydraulic Oil). Office Buildings Emergency Generator (Diesel Fuel). Residential (Heating Oil). Industrial Properties (Various Chemical). Issues? Site may be in violation (cost to be brought into compliance). Tanks may still be present (cost to remove). Impacted soils/groundwater may be present (clean-up, handling, disposal cost). Liable to neighboring properties.
ASBESTOS-CONTAINING MATERIALS (ACMs) Banned in 1978 (potential lung cancer), common in buildings constructed prior to 1981. Some ACBMs still in use (roofing sealant, floor tile, and tile cement). LEAD-BASED PAINT (LBP) Structures built before 1978 have an elevated chance of containing Lead. Typical surfaces tested: walls, floors, baseboards, doors, mechanical equipment, structural components, window components, ceramic tiles, and ceilings. MOLD Moisture in buildings causes: Uncontrolled humidity, poor ventilation, tightly sealed buildings, roof leaks, failure of window seals & flashing, improper landscaping. You may suspect hidden mold if a building smells musty even if mold is not visibly apparent.
ENVIRONMENTAL CLEANUP Voluntary Remediation Program (VRP) Brownfield: The purpose of the VRP is to encourage impacted site clean-ups that might not otherwise take place. The program is a streamlined mechanism for property owners to voluntarily address contamination at sites with concurrence from the state agency. When the remediation goals are satisfactorily completed, the state will issue a Certification of Satisfactory Completion of Remediation." This certification provides assurance that the remediated site will not later become the subject of an enforcement action unless new issues are discovered. Involves complete characterization of the property soil and groundwater. VRP will facilitate the sale and reuse of properties. Deed Restrictions, Institutional Controls (IC), or Activity and Use Limitations (AULs). Typical Costs - $50,000 and up 9 months + to Complete
CLOSING WORDS OF WISDOM Remember what your Mother told you: If it sounds too good to be true, it probably is.