Skipping environmental site assessments (ESAs) can result in dire consequences when purchasing or developing property. Nevertheless, many business owners underestimate the negative effects of skipping environmental site assessments. These assessments are the first line of defense for identifying potential environmental hazards and liabilities. Neglecting to have ESAs conducted can expose you to significant financial burdens and legal risks, especially if pre-existing contamination is discovered later.
Explore the potential repercussions of bypassing environmental site assessments, including the financial implications, health risks, and legal liabilities that can arise. By understanding the critical role ESAs play in property transactions, you can make informed decisions that protect your investment and ensure compliance with environmental regulations. Do not let ignorance lead to costly mistakes. Continue reading to discover why skipping an ESA is a gamble you cannot afford to take.
The Risks of Skipping Environmental Site Assessments
Environmental site assessments were created to keep the environment healthy and thriving. These regulations define safety regulations that must be followed to comply and avoid several serious consequences both financially and environmentally.
Environmental
Phase I ESA encompasses comprehensive site assessments. These cover current and past use of the property. Compliant site assessments can only be conducted by trained environmental personnel. Through site inspections, these individuals look for hazardous materials that could be dangerous to human health and the environment. Such materials include petroleum, lead, and other chemicals. Overlooking this step significantly increases the risk of aversive consequences to public health and the environment. If you purchase property before conducting a site assessment, you will be liable for any clean-up costs. Cutting corners on these assessments could lead you to have to pay hundreds of thousands of dollars.
Legal and Financial
Pleading ignorance to site assessments will not keep you from potentially accruing lawsuits that could reach multi-millions in damages and legal fees. Developing on a contaminated property could have far-reaching consequences not only for you but also for any neighboring properties of the site. When this happens, any stakeholders of property affected by this negligence have the right to file a lawsuit with a judge and sue you. Not only can this have grave financial consequences, but being involved in such lawsuits is a hard hit to one’s reputation.
Obtaining Financial Responsibility and Lending Problems
Commercial products typically require high start-up costs. Many rely on banks or lending institutions to finance these projects. Lenders and insurers are taking a risk when lending you funds or taking on the responsibility of helping you cover any financial burdens. Investing in a property that is not in compliance with local and state site assessment requirements would pose a large risk. Such a large risk that most lenders and insurance companies will not consider agreeing to any terms until proper inspections have been completed.
The Phases of Environmental Site Assessments
Phase I
Phase I is the first step of Environmental Site Assessments. You must seek aid from reputable environmental consulting services to comply with laws and regulations. Individuals who conduct these assessments undergo special training to ensure health and safety for the environment and others. Ask to see any necessary certifications or training required in your state before employing any consulting services. Otherwise, you may find yourself paying for an assessment that will not help you meet the standards required of you.
Phase I of an ESA consists of:
- Examination of relevant records
- Interviews with owners, past owners, and neighbors
- Inspection of the property to identify recognized environmental conditions
Phase II
After concluding Phase I of your assessment, an environmental professional will compile the data collected and use it in the next stage. To have Phase II of your assessment conducted, Phase I must be completed.
Phase II of an ESA consists of:
- Using the information from Phase I assessment to select locations for environmental sampling in areas.
- Samples are collected and tested to confirm suspicion of contamination.
The Importance of Environmental Due Diligence
The importance of environmental due diligence through thorough environmental site assessments cannot be overstated. Skipping these assessments can lead to severe consequences, including financial liabilities and irreversible damage to the environment and ecosystems. By prioritizing environmental site assessments, you can not only protect yourself from potential risks but also contribute to sustainable practices that benefit society. Stakeholders must recognize the value of these assessments and commit to integrating them into their decision-making processes for a healthier planet and a more responsible future.
Contact our environmental consulting experts to learn more about conducting site assessments and mitigating environmental risks.