To ensure that due diligence provides a comprehensive evaluation of potential environmental risks, companies contemplating the acquisition of commercial property should consider the following nine steps as part of the due diligence process:
- Ensure your consultants use industry standards and best practices to assess environmental risk (ASTM E1527-13 standard to conduct Phase I ESAs).
- Include environmental experts on your due diligence team from the start.
- Retain consultants with working knowledge of area-specific environmental issues.
- Physically inspect the property.
- Assess the current regulatory compliance status of the property.
- Identify applicable regulatory guidelines used as thresholds of contamination.
- Assess environmental risks and set thresholds.
- Seek indemnity agreements with the sellers.
- Transfer environmental risks by using Environmental Liability Transfers (ELTs).