Environmental Site Assessments

Environmental Site Assessments
Environmental Site Assessments

Jan 10, 2022

Did you know that an important step in buying commercial property is getting an environmental site assessment (ESA) done?

It’s more than a case of ‘buyer beware’. Getting an ESA done will prepare you for any environmental concerns on the property, give you a heads up about any remedial work that must be done if you were to take possession of the property, and assist you and your realtor in making informed negotiations.

In a nutshell? An ESA lowers your liability as a purchaser.

Here’s how the assessment plays out. First off, make sure you hire a reputable and experienced environmental consultant. This is a good place to check with your realtor for recommendations. And you’ll need some time for the assessment to be completed—up to 2 months. If you’ve made an ESA part of a conditional offer, you may walk away at any time if it reveals information that’s not in your best interests.

The first part of the assessment is called Phase 1, and it involves a visual (looking for evidence on-site and at neighbouring properties) inspection, and a historical inspection that includes document reviews, aerial photos, and more, going back in time. The older the property has been under development, the higher the risk of contamination.

Phase 1 can cost between $3-5,000. If any issues are identified, the assessment must proceed to Phase 2, which can cost $7-60,000. This is a place where a buyer may decide to walk away from the sale, rather than proceeding with Phase 2.

In Phase 2, further investigation will occur as dictated by the present findings. This may include soil sampling, groundwater testing, and checking for things such as asbestos, lead paint, and even mould—all things that will be costly, and important, to repair.

It’s possible for regulations to require that Phase 2 results be filed and publicly available. You can always check to see if there’s a Record of Site Condition (RSC). But even clean results from the past don’t ensure that a property is uncontaminated now.

The ESA is also important to consider if you’re leasing a property—especially if the lease includes a clause protecting landlords from environmental contamination on a site. In this case, it’s prudent to have a ‘benchmark phase 1’ environmental assessment done. This will verify that no current contamination issues are present before signing a lease.

If you operate a business that brings any risk of environmental contamination, it’s important to protect the environment and your business. The best approach is to practice all safety procedures. Another step is to purchase environmental insurance.

By their nature, commercial properties may pose environmental contaminant threats. When you’re looking for property and making offers, work closely with your realtor to identify and protect your business from any risk.

Once an Environmental Site Assessment is complete, you’ll be armed with the information you need to make the best decision about purchasing or leasing commercial property.

If you are considering Leasing, Buying, or Selling Commercial Property in the Okanagan call me at 250.448.5008 or email samantha@shopcommercial.ca and I would be happy to discuss your goals with you.

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