Pre-Sale Environmental Remediation: How Cleanup Can Improve Property Value and Deal Terms
Environmental remediation is an effective way for property owners to keep their properties and the surrounding areas safe. Remediation involves removing hazardous materials, such as contaminants like gasoline, fuel oil, heavy metals, and pesticides, from the soil and groundwater. When preparing to sell your property, look to the professionals at Sun Environmental Corp. to provide this helpful service in New York, Pennsylvania and New Jersey. Here, we discuss what environmental remediation entails and how it can help improve your property value and deal terms when selling your property.
Key Takeaways
- When selling a property, it’s important to consider the state of the surrounding environment, as this may impact the transaction.
- If environmental issues are found during a site’s assessment, professionals can undertake environmental remediation services to remove potential hazards.
- Sun Environmental Corp. features a highly trained and experienced team that can help make the environmental remediation process smooth and easy for both sellers and buyers.
Why Do Environmental Conditions Change a Deal’s Value?
When selling your property, you want it to be as appealing as possible for potential buyers. While some aspects, like curb appeal, might be easy to identify, issues surrounding the soil and its impact on groundwater are not. Despite this fact, these issues can create complications for your sale.
First, both lenders and insurers have a vested interest in the underlying state of the property, which includes the presence of any potential contaminants or pollutants in the area. If an inspection reveals their presence, these institutions may require professional remediation services before a sale. Without it, lenders will be hesitant to approve mortgages, and insurers may cancel potential policies. Buyers, as well, will want to ensure that the property they are attaining is free of potential hazards.
These potential problems may also affect escrow. In these cases, the need for remediation due to environmental factors can cause escrow holdbacks, where a certain amount of money is withheld from the seller until the necessary updates have been made. They may also result in indemnities, which are agreements within a contract that may require sellers to cover the cost of undisclosed or unresolved issues.
Lastly, people looking to purchase property are excited, but they won’t wait forever. Delays in the transaction due to poor environmental conditions may cause them to lower their bid or pull out entirely.
What Does Due Diligence Usually Find?
Buying a property isn’t as simple as buying products from a retailer. A lot of negotiations and paperwork are involved, and due diligence is a way to give buyers confidence. Due diligence refers to the investigative period after a purchase offer is accepted but before closing. During this period, potential buyers will inspect the property thoroughly, often with the help of a professional, such as a contractor or investigator, to get a better idea of its status.
In the case of environmental concerns, buyers can turn to an Environmental Site Assessment (ESA) company. These companies specialize in the evaluation of properties for these specific risks. A Phase I ESA helps identify current or potential contamination liabilities on the property. These assessments are performed to meet ASTM standard E-1527-21. A common liability in a residential setting could be an old underground storage tank. If a Phase I assessment finds a Recognized Environmental Condition (REC), a Phase II assessment will be needed.
Phase II ESAs take things a step further, providing an in-depth look at the issues discovered, which may result in investigations of the soil and groundwater, sampling of indoor air quality, radon and asbestos surveys, soil vapor encroachment, vapor intrusion assessments, and more. This is when they may remove that old underground storage tank and test the soil around it.
Getting this information ahead of time makes it easier for buyers to sign contracts. If the inspection of the property reveals something that requires environmental remediation, due diligence gives buyers the opportunity to request that the issue be resolved before the transaction is complete.
What Remediation Options Support Transactions?
If remediation is necessary, professionals can help. These experts work quickly and efficiently to ensure that the prospective transaction can continue in a timely manner. Some services that can help get things back on track include:
- Soil excavation
- Transportation and off-site disposal
- In situ remediation
- Bioremediation
- Engineering controls and cap systems
- Decontamination
- Site backfilling and restoration
- Long-term soil monitoring, including Operation & Maintenance (O&M) plans
These services help address any environmental issues, such as soil contamination, to get real estate deals closed.
How Can Cleanup Improve Deal Terms?
Once environmental remediation services are performed by professionals, both sellers and buyers will notice the impact. Buyers will feel more comfortable with the transaction knowing that the property they’re acquiring has been assessed and meets important health and safety standards.
For sellers, remediation services help ensure the process goes smoothly and reduce issues with escrow and indemnities. Remediation also helps increase the overall value of the property, as buyers can trust that potential environmental issues have been rectified. This means that diligence timelines in the future will be shorter as potential RECs will have been dealt with.
Find Expert Environmental Remediation Services Near You in NY, PA & NJ
Selling a property can be exciting, but environmental remediation services may be necessary to prevent unwelcome surprises. Turn to the team at Sun Environmental Corp. for help, so you can trust that your property is safe and that any issues have been dealt with professionally. We are proud to offer these services in upstate New York and the Greater Philadelphia area.
Our experienced and highly trained teams use state-of-the-art equipment and efficient techniques, allowing owners to feel confident in our work. Whether you require contaminated soil remediation, soil and water sampling, or excavation and site restoration, we’ll be by your side through it all. We even feature an emergency spill response team that can help manage unplanned events 24/7. Contact us today to learn more or to speak to a member of our team.
Frequently Asked Questions About Environmental Remediation
How do environmental issues show up in pricing, escrow holdbacks, and deal terms?
Environmental issues can lead to reduced property values, lenders withholding funds, and the need for sellers to cover the cost of repair services.
What Phase I and Phase II findings most commonly delay or derail property transactions?
When Recognized Environmental Conditions (RECs) are identified, transactions will typically be paused until the issue is resolved. Examples of these include leakages in underground storage tanks, the presence of hazardous building materials, vapor intrusion, and the improper disposal of waste on-site.
What environmental remediation services can the team at Sun Environmental Corp. provide?
At Sun Environmental Corp., our highly trained experts are prepared to handle a wide range of remediation projects, including excavation and site restoration, remediation monitoring, soil and water sampling, contaminated soil transportation and disposal, and decontamination and demolition. We even provide a 24/7 emergency environmental response team.
How should environmental cleanup be scheduled to reduce diligence timelines and negotiation friction?
Because environmental issues and the remediation process can cause unexpected delays, you’ll want to schedule cleanup services as soon as possible. Not only will this help the current sale go through, but it will also ensure that the necessary steps are taken should another potential buyer come forward in the future.
