A site assessment is a way to learn the past and present activities in a certain area of land. The assessment is done to verify the possibility of contamination on the site and the extent of its impact on the environment. It can be done as a normal procedure in property transfers or as requested by a government agency.
There are many types of site assessments, but the standard remains to be the Phase 1 Environmental Site Assessment. This type is generally conducted as part of due diligence procedures before a property changes ownership. It needs to be done by environmental scientists who meet a certain degree of expertise and follow a rigidly standardized format. If done properly, a Phase 1 Environmental Site Assessment becomes a strong measure of liability protection for the property’s new owner.
This is not its greatest advantage, however, because the real strength of environmental site assessment lies in its ability to provide the buyer with a clear understanding of what he’s purchasing so that he can make informed decisions before he makes the purchases. These decisions include whether he should proceed with the purchase at all or what issues should be addressed by the seller prior to the transaction.
Reports of contamination as a result of an environmental site assessment can severely affect the property’s value. For this reason, a buyer can negotiate the purchase price further with the seller if cleanup is necessary. Or perhaps both parties may decide to set a budget in escrow for cleanup processes after the purchase. In both cases, the final purchase price will be lower than what was previously agreed on.
As a property buyer, it is imperative that you perform environmental site assessment. There’s simply too much at stake in not having one done. And if you do, it should be regardless of the details of the transaction or the kind of property.
Finally, have a third-party professional perform the assessment. For sure, you have to spend money to find one with extensive expertise, but it will be money well spent as long as you consider what you have at risk. A reliable company like Property Condition Assessments L.L.C can performs these assessments to help you exercise due diligence in real estate.