In the Air ≠ In the Clear

Being an Environmental Professional (EP) under the All Appropriate Inquiry (AAI) definition requires knowledge of the ASTM Phase I ESA standard and appropriate training and experience. A minimum of five years of experience is required by AAI to attain EP status, which qualifies someone to conduct a site walk, perform interviews, and review historical information.  However, being an expert at environmental due diligence requires a much greater skill set, particularly the ability to draw defensible conclusions and to make appropriate recommendations that enable the user to make a purchase or lending decision. This requires substantial industry knowledge that goes beyond basic Phase I ESA training. Here’s one example.

In the Air ≠ In the Clear

A former industrial property had been converted into office condominiums, and a consultant was retained to perform a Phase I ESA on one of the condominium units. Historical research identified underground tanks and prior industrial uses that included varnish and paint manufacturing. The consultant recognized that these are both normally environmental concerns; however, he concluded that they did not constitute a recognized environmental condition (REC) for the subject condominium because it was located not on the ground level. In reading this conclusion, I was skeptical and so consulted with a real estate attorney, as I often do when legal questions arise. I confirmed that although condominium agreements vary, generally all condominium owners all have a percent ownership of common areas of the building, and therefore would all be jointly liable for environmental cleanup.

This example shows how a couple of minutes on the phone with a legal expert, which is not a necessary element of the Phase I ESA process, made a remarkable difference  in the report conclusion and alerted the buyer to potentially significant environmental liabilities.  It takes years of industry experience to know the right questions to ask, and whom to ask. Hire wisely!