Over the years I’ve seen quite a variety of environmental site conditions that have adversely impacted the value of a property.  Many of these conditions were discovered during the environmental due diligence period and either stopped the deal in its tracks, or were taken into consideration by making adjustments to the purchase price.  Others were missed by other consultants and were discovered at very inopportune times by the owner.  In my experience, there are two main reasons for the failure to identify these problems.  The first reason is an inexperienced environmental consultant was selected to do the Phase One Environmental Site Assessment (ESA), or no ESA was conducted.  The second reason has a fairly clear explanation: the purchaser used private or self-financing and was not required to conduct an ESA as part of the purchase process.  The first reason gets a bit more complicated and is often the result of a short-sighted purchasing process.  It is hard to understand how saving a few hundred, or even a few thousand dollars as part of the procurement of a multi-million dollar property could be worth the risk.  If any single issue is missed as part of the environmental due diligence assessment, the cost to remedy that issue will undoubtedly be many fold the difference between the cost of an ESA conducted by a “low cost provider” versus one conducted by a high-quality firm with extensive experience in the field.  A recent article titled “Don’t Purchase a Lemon: Top 5 Mistakes to Avoid When Closing the Deal!” by the environmental lawyers Donna Shier, Robert Woon and Serin Remedios¹  highlighted this fact.

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