Real estate is a vibrant enterprise, and there is a lot to stand to benefit from acquiring property as far as re-selling, development, and other purposes. However, just as you would want to have a used car inspected before paying for, it is important to know what you are getting into when it comes to purchasing property, and for that reason Environmental Site Assessment surveys are extremely important in the buying and property selection process.
Unfortunately, in this day and age hazardous waste is a real thing and a real profit-killer at that. For this reason, Phase I and Phase II surveys and reports are more important than ever, as they can help to identify nine of the major hazardous waste monsters out there that are destined to kill your real estate profit.
Nine hazardous waste monsters are:
1. Buried Old Tanks
2. Previous Petrol Station Sites
3. Yards and Asbestos related Industry
4. Previous Industrial Sites Producing Hazardous Chemical
5. Electronic Waste Damp Sites
6. Lead and Heavy Lead sites
7. Previous Military Ordnance Sites
8. Contaminated water supply system, Waste treatments yards.
9. Dangerous Farming Chemicals/Pesticides
How to Tell If You Are At Risk
Unfortunately, most of the hazardous waste risks are rather difficult to identify, especially just by looking at the property. Even some basic inspections fail to identify these key problems, so it is extremely important to make sure that you obtain an Environmental Site Assessment just to make sure that you don’t have any of these problems to look forward to.
Phase I and Phase II Environmental Assessment Reports can give you an idea of what there is on your property. This assessment is done by inspecting and taking samples of the flora on your site as well as some other environmental samples. The samples are then bottled and taken to a laboratory and the tested for the presence of hazardous waste. This may take anywhere up to a few weeks and it can be a costly procedure, but worth it in the end as the value of such a property is drastically lowered.
In addition, the owner of the property or the owner of adjacent properties might also be able to give you an idea of what things to look for before the inspection is even performed, as they can often remember the purposes the site has been used for in previous years.
A Phase I report will give you some idea of what to expect and a Phase II report usually follows as a more extensive version of the Phase I report.
What If There Are Hazardous Materials Present?
If your Environmental Site Assessment determines that you have one of the above hazardous waste to deal with, that is not necessarily the be-all and end-all of your property investment. A Phase III report can be obtained to determine what steps need to be taken to rehabilitate the property, but this assessment is often financially draining and extremely time consuming as well. Whether or not you want to proceed with the purchase of the property is up to you, but the presence of hazardous waste sucks a lot of the value out of a property and that must be reflected in your purchase price, as this type of project can be very costly to rehabilitate.
If it has been determined that there are hazardous waste materials present on a site that you have purchased, or are thinking about purchasing, it is important to note that the value of the property is drained immediately. It is no longer as valuable because even after it has been cleaned and rehabilitated, there are certain things that it cannot be used for. Usually property must be zoned for certain purposes and it can only be zoned for certain types of businesses or uses. After the presence of hazardous waste materials has been determined, it may or may not be in your best interest to proceed with the sale depending on what you had planned to use the property for in the first place.
Hazardous waste materials can definitely be a killer when it comes to dreaming of a certain use for your property, but know their presence is not always a deal killer. There are things that can be done to make property usable after the presence of hazardous waste has been determined. If the numbers make sense on the allowable use for the property, it is just a matter of negotiating a purchase price that works and rehabilitating the property for development.