WHEN YOU PURCHASE COMMERCIAL PROPERTY, ALWAYS CONDUCT A PHASE 1.
It’s extremely unwise to purchase a property without taking Phase 1 Environmental Site Assessment (“ESA”). Most banks will require it, and even if you’re paying cash, it protects you from purchasing an environmentally compromised property without an appropriate price adjustment. There are many properties on the market that are overpriced and overvalued due to the cost of environmental cleanup that would be passed to the buyer. This is one of many ways that sellers of commercial property try to pass along liabilities. That’s why it’s important to work with an experienced Elizabeth, NJ real estate lawyer to avoid these common pitfalls.
What Is A Phase 1 ESA?
The purpose of a Phase 1 ESA is to identify existing or potential environmental contamination liabilities prior to a commercial real estate transaction. A Phase 1 ESA usually includes the following steps:
Site visit to visually inspect for current and past conditions and uses of the property;
Review of all federal, tribal, state and local records for information regarding underground storage tanks (USTs), aboveground storage tanks (ASTs), known or suspected contamination, storage and disposal of hazardous substances, and other types of pollution;
Review of historical records include insurance maps, photographs and city directories;
Interviews with past and current property owners, occupants, operators and other persons familiar with the property and
Search of judicial records for environmental liens.
An experienced real estate attorney in Elizabeth, NJ will advise you to never purchase a commercial property without a Phase 1 ESA because environmental cleanup will be your responsibility after the sale, and could erode or destroy your investment.
Hire An Experienced Elizabeth, NJ Real Estate Lawyer
To get the most profitable return on your purchase of commercial real estate, it’s important to carefully scrutinize every aspect of the contract. That’s why it’s prudent to hire an experienced Elizabeth, NJ commercial real estate attorney to review your contracts before you finalize your purchase.