Selling a Commercial Property? Get an environmental assessment before you list it

Why ignorance isn’t bliss

Imagine you’re selling a commercial or industrial property. Your buyer’s offer is contingent on the results from a preliminary environmental assessment, and you’re confident it will show you’re selling a ‘clean’ site. Or maybe you’re unsure, but you’re taking the chance that things won’t be too bad. The assessment results show your property isn’t ‘clean’ and the deal falls through. You’re surprised or disappointed, and then frustrated and stressed about how this information will affect the potential sale to other buyers.

There can be additional repercussions for not understanding the condition of your property and completing a sale. If the buyer discovers contamination on the property after their purchase, they can sue you for assessment and remediation costs associated with pollution not disclosed at the time of sale

What’s going on?

No one starts a business with the intent of causing environmental harm. However, many industrial and commercial businesses have the potential to pollute soil and groundwater, and most people don’t fully understand how.

Not all contamination is obvious. Pollution to soil and groundwater can be invisible at surface. It can take an expert in environmental assessment to evaluate the potential for a property to have contaminated areas. Historical land-uses may be unknown to you, and prior business practices may have caused pollution that was never documented or properly assessed. Contaminants from neighbouring properties can migrate to your site underground.

If you are selling commercial property, you have an obligation understand and then fully disclose to potential buyers the site history, past land uses, and the potential for site contamination.

Get informed! Be in charge

Don’t let contamination come as a surprise. Before you list your property, hire an environmental professional experienced with contaminated sites to start the environmental site assessment (ESA) process with a Phase 1 ESA (called a Stage 1 Preliminary Site Investigation (PSI) in BC). Take control by knowing the environmental condition of your site.

Finding contamination doesn’t have to be a show-stopper to a property transaction. Each situation is unique, and people have different tolerances of risk. With disclosure of the property condition, prepared by a qualified environmental professional, you and your interested buyer can negotiate sale terms openly.

If you do choose to clean up the contamination before listing the property, make sure it is done under the direction of a qualified environmental professional to document the work completed and the post-remediation condition.

If you think the contamination was caused by a previous owner or operator, or by a neighbour, contact an environmental lawyer to understand how you may be able to recover the assessment and remediation costs.

Hire an experienced environmental professional

Let us guide you. Spoke can help you take charge of the potential environmental risks associated with commercial and industrial properties. Our reports are prepared with the required technical rigour to satisfy the government regulatory experts, and our findings are explained clearly to you in the context of your goals.

Don’t be surprised or frustrated by contamination. Get an ESA before you list your commercial property.