Does Your Residential Property Have Environmental Issues?
By Mike Gray, PG
Several weeks ago, my colleague and Environmental Scientist Extraordinaire Breanne Carr wrote an article about some ways to know if your commercial property needs a Phase 1 Environmental Site Assessment. She highlighted some of the key considerations that might determine whether an environmental assessment might be necessary before purchasing commercial property.
In addition to being very informative, her piece got me thinking about environmental issues associated with residential, or non-commercial properties. What if you’re not buying a business, but you’re buying a house or vacant property? Should you be concerned about whether the property might have environmental issues like you might be on a commercial property? Should you hire a professional to look at the property? The answer is usually…maybe.
Hazardous Materials Can Be Anywhere
The overall risk of a property having environmental issues that could affect its value or result in expensive cleanup activities is greater on a commercial property than it is on a non-commercial property like a residence. That is simply because past land use in a commercial setting is much more likely to have resulted in environmental impacts either from activities on the property itself or from activities on adjacent commercial properties.
Commercial operations often use and store things that are potentially harmful to the environment, and sometimes those things spill (or get dumped), resulting in environmental impairment. Banks and mortgage companies recognize this reality, which is why they often require an environmental assessment prior to approving a loan on a commercial property.
But even though the risk of environmental impairment on non-commercial property may be lower than on commercial property (relatively speaking) that does not mean there is no risk at all. People can store, use, and spill hazardous materials anywhere.
Does My Property Have Environmental Issues?
So how do you know if a non-commercial property is likely to have environmental issues? Are you going to go hire an environmental professional to conduct a full-blown Environmental Site Assessment if your bank does not require it? For most, the answer is probably no. That’s one more expenditure at a time when you’re already maxed-out on spending for the things that are required.
However, there are some things you can do on your own that might help you to assess whether a property might be environmentally impaired and whether using the services of a professional might be a good investment.
There are really two major focus areas in assessing whether a property might be environmentally impaired: One is the condition of the property itself, and the other is the condition of surrounding properties. You can do a little reconnaissance in the following areas to assess the general nature of the area:
- Start by looking at general housekeeping. Is the property well kept up, clean and neat, or does it appear to be on its way to becoming a junkyard?
- What about adjacent properties? Much like first impressions can belie a person’s true character, so it is with properties. Of course, physical junk does not always equate to environmental impairment, but there is often a close correlation. The lesson here is: If you see something that looks like it could be an environmental contaimanant, ask your Realtor about it.
- Follow-up by piecing together a historical narrative of the site and vicinity.
- How long has the area been developed?
- What kinds of activities may either be taking place now or may have taken place in the past?
- Are any of those activities likely to have resulted in environmental impairment?
Some key things to look for include:
- Signs of commercial activity (even in residential areas)
- Barren lots that may have had structures removed
- Evidence of unusually disturbed ground
- Chain link fencing that seems to be surrounding otherwise open areas
- No Trespassing signs
- Visible environmental wells (typically indicated by a steel pipe sticking a few feet out of the ground).
While none of these features in of themselves necessarily indicate actual environmental problems, their presence or absence can contribute to understanding the broader setting and history of the property and vicinity.
Finally, look for specific indications of actual sources of environmental contamination on the property or in the area. As you walk through the property, ask yourself if any of these situations are present:
- Are there any larger quantities of fuel, oil or chemicals on the property, such as bulk fuel tanks or waste oil drums?
- Does the property have any sumps or floor drains in outbuildings that might be improperly discharging contaminants?
- Are there nearby commercial operations that may have hazardous materials (for example, gas stations, auto repair shops, machine shops, dry cleaners, paint stores, etc.),
- Do any properties in the immediate area have visible fuel tanks, drums or vats?
It is possible that potential sources of environmental problems may be right out in the open and visible. Keep in mind that even though some of these things are present, they may not have resulted in environmental impacts
What if I Find Environmental Contamination on my Non-Commercial Property?
In most cases with non-commercial property, these observations will simply confirm that the property is probably not likely to be contaminated, and afford you, the buyer, some comfort in moving forward.
But if your observations reveal that all might not be right with the property, you may want to consider consulting an experienced environmental professional. Not only will they understand what additional resources are available to identify potential past and current environmental issues, but can often identify which of those issues are likely to have an impact on the property and how serious the impact might be.
Environmental professionals can also offer you valuable insight into what steps you might take to resolve any issues before you finalize your purchase. That is important because it can play a part in understanding potential financial liabilities with the property. It might be as simple as providing some context to your observations, or in other cases, there may be a valid reason to do more investigation.
In any case, you may rest a little easier knowing you have done at least a basic level of due diligence on your purchase. If you have questions or would like help mapping out your property evaluation process, please feel free to contact us.
Mike Gray leads Morrison-Maierle’s Natural Resources Market Group and has over 30 years of experience performing environmental and engineering projects in the western U.S. He has executed a wide range of projects, including site assessments, remediation projects, water quality studies, groundwater studies, habitat assessments, and environmental baseline studies.
Technical review of this article provided by Breanne Carr, Environmental Scientist