Environmental Factors in Real Estate Transactions

Whenever environmental contamination is found, all of the owners, both current and former, can be held liable for cleanup costs. In some instances, the cost of environmental cleanup, exclusive of litigation, may exceed the market value of the property.

Site Use History

A property ownership chronology is developed for the land and all adjoining property for past usage. Handling of potentially hazardous or toxic materials raises questions.

Air Photo Interpretation

Existing aerial photographs are matched with the site use history. A careful examination is conducted for details of site use that might be a suspect source of surface or subsurface contamination.

Utility and Regulatory Record Review

A water and sewer use history is compiled to document wastewater, air pollution control or solid/hazardous waste activities.PCB History
Inquiry is made as to the history of PCB’s in transformers, capacitors or lubricants.

Site Accident And Emergency History

Local records are inspected to determine if there were fires, explosions, spills, tank leaks, pipe leaks or other accidents that may have released hazardous materials.

Raw Material and Waste History

A list is prepared of known and suspected raw materials that may have been used on the site, especially materials that might contain constituents on the EPA list of potentially hazardous constituents, especially solvents that can easily enter the ground water from spills or other losses.

Sewer System Review

Storm, sanitary and process wastewater sewers are documented and mapped.

Underground Tanks and Piping

Present or past underground tanks and piping are mapped and documented, especially for leaks.


Site-soil test borings and water supply wells is compiled. The potential for surface spills or losses of contaminants that may have resulted in ground-water contamination is determined.

Environmentally Sensitive Areas

The presence of wetlands and habitat for protected or endangered species is determined. Such environmentally sensitive areas can prevent or limit site development.

Air Quality

Existing conditions and restrictions regarding area air emissions is determined.

Building Inventory

An inventory of structures on the site is developed.

Insurance Considerations

Applications for Environmental Impairment Liability (EIL) insurance are investigated to weigh potential problems with insuring the site.

Evaluation of Information

The site is evaluated in light of the investigation findings. If contamination seems possible, a program of testing, sampling and analysis is implemented.

Sample and Test

If covered trenches, pits, impoundments or unidentified tanks are suspected, surface geophysical surveys are helpful in locating such features and mapping conductive contamination plumes. If surface spills are suspected, a program of shallow hand-auger soil sampling in suspect areas and drainageways can give a quick overview. Deeper soil sampling and ground-water monitoring is advisable for sites where mobile hazardous constituents, such as organic solvents, were handled.

Uncertainty and a Fair Price

While there is always the possibility that a significant environmental problem might go undetected, the careful buyer or seller can minimize the uncertainty and risk.

Most environmental problems need not terminate a sale. When a problem is discovered, the potential buyer may reduce the purchase offer to reflect the expected cost for correcting the problem. If price adjustments are to be considered, based on environmental conditions, both the buyer and seller should have an independent corrective action cost estimate prepared as a basis for establishing a fair price.