Environmental Due Diligence and All Appropriate Inquiries

National Expert: John Tabella

Today’s commercial real estate transactions must take environmental issues into consideration. Complex laws can impose significant environmental liabilities on purchasers, sellers, and lenders, whether or not they caused the problem, and whether or not they still own the property.

Important rules published by the U.S. EPA and many states offer defenses against environmental liabilities provided that the defendant conducted “all appropriate inquiries” regarding the property at the time of acquisition, and then took reasonable steps to mitigate the effects of hazardous substances found on the property.

SCS Engineers offers a full complement of environmental due diligence services, including:

• Phase I Environmental Site Assessments
• Phase II Site Investigations
• Remediation Design, Construction, Dewatering, and Operations and Maintenance
• Environmental Desktop Reviews and Transaction Screen Assessments
• Environmental Compliance Reviews and Audits
• Vapor Encroachment and Vapor Intrusion Studies
• Due Care and Continuing Obligations Planning and Implementation

Through our network of offices nationwide, SCS Engineers provides national resources with local expertise.

All Appropriate Inquiries

All Appropriate Inquiries (AAI) is a process of evaluating the environmental condition of a property and assessing the likelihood of contamination. The EPA established the Federal standards for the conduct of AAI in 2006. The final rule establishes specific regulatory requirements for conducting all appropriate inquiries into the previous ownership, uses, and environmental conditions of a property for purposes of qualifying for landowner liability protections under CERCLA.

Parties must comply with the requirements of the AAI Rule, or follow the standards set forth in the ASTM E1527-13 Standard Practice for Phase I Environmental Site Assessments, to satisfy the statutory requirements for conducting all appropriate inquiries.

SCS Engineers provides All Appropriate Inquiry services which entail:

• Interviews with past and present owners and operators
• Review of historical sources (i.e., chain of title, aerial photos, building permit records, etc.) to determine previous uses and occupancies since the property was first developed
• Search for recorded cleanup liens filed against a facility
• Review of regulatory records for waste disposal, hazardous waste handling, generation, treatment, disposal, and spills for the site and surrounding areas
• Visual inspection of facility and adjoining properties
• Specialized knowledge or experience of the person claiming the defense
• The relationship of purchase price to property value, if the property was not contaminated
• Commonly known or reasonably ascertainable information about the property
• The degree of obviousness of the presence or likely presence of contamination at the property, and the ability to detect contamination by appropriate investigation
• Results of an inquiry reported by an environmental professional

By completing these steps, and others, a prospective purchaser may be protected from potential liability under CERCLA as an innocent landowner, a contiguous property owner, or a bona fide prospective purchaser.

SCS Engineers employs experienced, qualified staff across the country who have provided AAI services on literally thousands of projects. We have evaluated nearly all property types and uses over the past 30 years – long before the advent of the ASTM Phase I standard and since the beginning of CERCLA.

Click here to view Success in Collaboration Encinitas Community Park Project, a short video about an award-winning project team.