The New Environmental Due Diligence

The world of environmental due diligence has been put in a tizzy by the US EPA. At the end of 2005 the EPA finally put together their guidelines for what constitutes All Appropriate Inquiry (AAI, a term first coined in 1984 in the Superfund Amendment Reauthorization Act, SARA). So this is now the only guideline to use while conducting a Phase I that will allow the new owner of a property to avoid federal liability under CERCLA (Comprehensive Environmental Response Compensation and Liability Act, 1980). So as a potential property owner this will affect you, and you should be aware of the AAI regulations, because it is unlikely that your bank will let you know. You see banks do not have much liability under CERCLA, so they are not really interested in the new regulations. What they are interested in is whether or not the property has environmental contamination that would lessen the real property value. These are separate issues entirely. Of course, AAI is a little more involved that other levels of environmental due diligence and will cost more. Talk to your local environmental consultant about what is right for you or you can email me at nickpatz@ceresassociates.com or phone me at 707 748-3170.