Real estate developers face environmental concerns as a major hurdle. To comply with Environmental Protection Agency (EPA) standards and the Endangered Species Act (ESA), developers should take great care when developing sites with ecological significance or endangered species that require special consideration when developing. Furthermore, before proceeding with any project that may harm protected species’ habitats.
Real estate developers frequently face the environmental challenge of determining if a property has been designated as critical habitat for an endangered species. Critical habitat is defined as geographic areas essential to the survival and recovery of threatened or endangered species, including both inhabited and unoccupied habitat such as foraging grounds and nesting grounds. Any development project that impacts critical habitat could require consultation with the Environmental Protection Agency as well as additional state and local permitting processes.
the Environmental Protection Agency (EPA) may refuse to permit projects which will negatively impact a listed species’ habitat, prompting environmental professionals to conduct a Phase 1 Environmental Site Assessment (ESA). During an ESA, an environmental professional conducts a thorough examination of a property to identify any potential toxins; typically this process includes visual inspection as well as review of historical documents and interviews with current/former owners/occupants/neighbors.
An Environmental Site Assessment (ESA) should be part of any due diligence process for anyone purchasing commercial property for business or living purposes, whether as their home. An ESA helps reduce risk by determining if the site is contaminated and providing them with information to make decisions about whether to proceed with a purchase or loan application; additionally it protects buyers against liability under CERCLA – an environmental statute which holds property owners liable for clean-up costs if adequate due diligence was not conducted when making their decision.
Most lenders require prospective real estate buyers to undergo a Phase I Environmental Site Assessment before lending money for commercial real estate transactions. Even if lenders do not require one, prospective property buyers are strongly encouraged to obtain one regardless. Aside from protecting against financial loss, an ESA can also protect buyers from inheriting expensive liabilities and provide leverage during sales negotiations. Its costs vary widely depending upon its scope and history – typically between $1,000-$2,000 for basic ESAs that take between 2-4 weeks to complete and possibly over $50,000 for more extensive ones.