Decades ago no one gave much thought to environmental concerns in commercial real estate. Many decades ago, people would even accept money and allow companies to dump environmental waste on their own vacant land, too.
But that’s all changed.
Today it’s a completely different story, and you need to be on top of the environmental laws as they pertain to your own particular property.
Do you know if any gas or fuel tanks have ever existed on your property? In addition, if they did exist, were they removed in accordance with current environmental standards?
If your building is older, might there still be some asbestos located somewhere inside of it?
On top of this, have there been any uses in the history of your property where environmental contaminants may have been utilized?
These are all questions that need to be addressed at different times in connection with commercial properties, and while this subject isn’t one that’s fun to look at, it definitely needs your attention.
In many situations environmental concerns are looked at whenever an owner is selling a property, because the timing of this has become a major concern within commercial real estate. Full disclosure has become much more of a direct concern within commercial real estate also, as buyers want to be certain about what they are getting into, while sellers want to minimize any potential liability to themselves, too.
With this in mind, while making sure that your property is in alignment with current environmental regulations just before selling it may seem like a hassle, this can actually help to minimize potential liability from the property down the road. When years later someone finds environmental contamination on the property, and your records, reports, and due diligence indicate that these problems weren’t present at the time you sold the property, this can be helpful to you in proving your innocence. However, if you didn’t have any environmental studies done just before you sold the property, how will you prove that you had nothing to do with this contamination? In these situations there will likely just be a lot of finger pointing and yelling back and forth, and maybe even in front of a judge. But what about when you’re not selling your property? Could it still be worthwhile for you to have an environmental expert inspect the property and give you their opinion on it?
Absolutely!
In some situations you may want to know about the condition of your property just for your own peace of mind. In other situations, if you’re concerned that a proposed tenant may begin utilizing hazardous substances, it may be wise to have an environmental company give you their opinion on your property’s current environmental condition. If they believe that everything is OK, as will be evidenced by their environmental report, you now have something that you can lean on should environmental problems be discovered either during or immediately after the tenant’s occupancy. In the absence of having such a report, the tenant will most likely claim that any problems were due to a previous tenant occupying the property, and in this situation, how difficult do you think it may be for you to prove otherwise?
So while doing your due diligence and getting environmental studies done on your property may seem like a hassle, in the end it can protect you and help you to minimize liability.