Background:
During the foreclosure process, numerous factors are involved and the standard, linear Environmental Due Diligence (EDD) process may be skewed. During the Phase I Environmental Site Assessment (ESA) process, several standard practices and/or requirements may not be feasible or practical for a variety of reasons. A Phase I can be completed with these limitations; however, the report may be adjusted and/or qualified in response to these limitations.
Common limitations and other items that occur during the completion of Phase I ESAs for foreclosure situations include the following:
Inability to contact the owner:
- It is not uncommon for the current property owner to be unavailable for the standard owner interview
- The lack of an owner interview will be identified in the Phase I report as a “data gap”
- May not be significant and influence the outcome of the report depending on other available information
Inability to access the interior of the building(s):
- If the property owner is not available or otherwise not cooperative, the interior of the building(s) on the property may not be able to be accessed during a site walk-through
- The inability to observe the interior of the building(s) will be identified as a limiting condition and data gap
- May not be significant and influence the outcome of the report depending on other available information
Inability to access the exterior of the property:
- If the property owner is not available or otherwise not cooperative, it is possible that we are unable to access the property, including observing the exterior
- The inability to observe the property will be identified as a limiting condition and data gap
- May not be significant and influence the outcome of the report depending on other available information
180-day “shelf-life”:
- A Phase I ESA has a “shelf-life” of 180 days from when the environmental database was ordered, when the site visit was completed, or when the owner/user interviews were completed; whichever is earliest
- The foreclosure process routinely exceeds this timeframe
- In the event that the 180-day timeframe is past, a Phase I ESA update will be necessary
- Depending on the property and specific loan and bank requirements, the scope of work and cost associated with the Phase I ESA update report may vary
Security:
- In the event that the property owner is not available to be present during the site walk-through, it is expected that a representative of BLDI’s client (i.e., the lender) will be present to accompany BLDI staff for security reasons
- In the event that a representative of the client is unable to accompany BLDI staff, a third-party security vendor will be retained at the expense of the client
Please contact Renée Pewitt, EP, or Nichole Mason at 616-459-3737 with any questions.