How Can A Preliminary Environmental Liability Screening Help You?

Nobody wants to buy a house that has a high level of potential environmental liability. The reason is simple: contamination on a property can affect health, result in an expensive site clean-up and potentially reduce the property value greatly!

But, how can a buyer find a house with no or a very low environmental liability? Before, it is often recommended to conduct a Phase I Environmental Site Assessment (ESA) for the subject property prior to purchasing. But a Phase I ESA usually takes 2 to 3 weeks to complete and may cost over $3,000. And, many times, a Phase I ESA assessor has to obtain the consent from the current owner in order to conduct a site visit and collect the required information. As such, most buyers opt not to conduct a Phase I ESA.

The potential risk of not doing an environmental liability check prior to the purchase of a property is real. For example, one person bought a complex for rental. The new owner didn’t conduct a Phase I ESA prior to the purchase of the property. During the renovation of the property following the purchase, the subcontractor found an approximately 80 years old leaking underground fuel storage tank (UST) underneath the basement floor. As such, the new owner had to pay the costs of the removal of the UST, the cleanup of the onsite contamination, and the delay of the renovation project. If the new owner had done a Phase I ESA prior to the purchase, the UST could have been identified and the new owner might not have bought the property or have asked for a price reduction.

In order to help buyers to evaluate the potential environmental liability associated with residential properties, GreenRideau Environmental Solutions Inc. (GreenRideau) developed the Preliminary Environmental Liability Screening (PELS), a low cost desktop process designed specifically to help buyers. To conduct a PELS, typically an assessor will collect available environmental information such as topographic maps, air photos, geological and hydrogeological data, locations of existing contaminated sites, existing and proposed landfill sites, gas stations, pipelines, railway tracks, current and former industrial sites, etc. to assess the potential environmental liability associated with the subject property. Buyers can request 3 houses to be screened per PELS for a contracted period when they are looking for houses. It is much more flexible and time and cost effective. For most cases, a PELS can be sufficient, and if more detailed assessments are deemed required, buyers can upgrade a PELS to a standard environmental liability screening (SELS) or a Phase I ESA.

Disclaimer: The information published in this blog is based on author’s personal knowledge and experience and is provided to readers as references only. The environmental conditions and requirements of regulations could vary from site to site. As such, readers should seek professional advices from a consultant who is familiar with the site conditions when readers address their environmental concerns. The authors of the blogs and GreenRideau Environmental Solutions Inc. are not responsible for any losses or damages resulted from either direct or indirect uses of the information provided in the blogs published on www.greenrideau.com.