Contaminated soil or water can be harmful to humans and other living organisms, and careless waste disposal and leakage of underground fuel storage tanks are only two examples of how contamination can occur.
In addition to the 10,000 spills reported every year in some countries, it is estimated that as many as 40,000 contaminant spills go unreported. Upward of 20,000 fuel storage tanks may be leaking, and any number of the 10,000 landfills in some countries may be seeping further contaminants into our soil and water.
Although there are presently (2005) no legal requirements in Some countries to conduct environmental site assessments, purchasers, mortgage lenders and real estate practitioners should be aware of the potential financial, legal and environmental consequences of bypassing assessments where they may be advisable. Resale industrial, commercial or farm properties are among those which can represent an elevated risk to anyone involved in a real estate transaction.
Contaminated soil assessment in Melbourne city typically consists of three phases. A preliminary (Phase I) assessment is first conducted to determine if there is any evidence to suggest that a site could be potentially contaminated. As of 2005 the costs are approximately $2000 to $3000 which is not pocket change, however considerably cheaper than the costs involved in a major clean-up.
A Phase I assessment consists of site history research, a site visit, interviews and a written report provided by a qualified consultant adhering to the Canadian Standards Association (CSA) guidelines for environmental site assessment.
If a Phase I assessment discloses evidence of contamination or potential contamination, a Phase II site investigation should be conducted to confirm the presence of contaminants. A Phase II investigation may include drilling, sampling, testing and groundwater monitoring, and cost $5000 to $10,000 and sometimes more.
If a Phase II determines that unacceptable levels of contamination exist, a Phase III Remedial Investigation should be carried out to determine what approach should be taken to clean up, or contain the contaminants present at the site. Ballpark costs cannot be offered for this phase, as every site will have its own specific set of considerations.
Actual cleanup is not considered to be part of an environmental site assessment.
The Bottom Line:
Applying “due diligence” is a key responsibility of everyone involved in a real estate transaction. Ignoring potential problems at sites where prior usage may have led to contamination, can lead to serious legal and financial costs for anyone involved in the purchase and sale of such property, in addition to the environmental ramifications.