How Buying Contaminated Property Reduces Environmental Risk
Recently we were discussing a pending real estate purchase with a client who was surprised when we commented that the best way to reduce environmental risk was to purchase a property that was already known to have soil and/or groundwater contamination that had been reported to the state. Now let me add a couple of provisos: 1) we were talking about Massachusetts, where property purchasers are not automatically punished by the state for purchasing and trying to cleanup contaminated property; and 2) we were assuming that there was already enough testing that no big surprises were still lurking in the ground.
The advantage of purchasing contaminated property is that there are reduced expectations by the seller, buyer, lender and the state. With a supposed “clean” property, surprises can only go in one direction, down. Surprises with “dirty” property are often positive; it often turns out that dirty properties can be safely reused for any number of purposes.
Now there are some watch-outs, among which vapor intrusion (VI) may be the the most important. Many properties achieved satisfactory closures and are now being reexamined by the state because the ground rules related to VI have changed. As a result, many otherwise attractive properties that may have VI issues are now languishing.
Another possible watch-out lurking on the horizon is PCBs (polychlorinated biphenyls) in building materials. So far this is an issue that has mostly caused problems when found in schools. The potential clearly exists for this issue to spread beyond schools into commercial and residential structures.
Once beyond VI and PCBs, contaminated property looks like a a winner as long as the property works for the intended uses; it comes down to a case of the devil you know being better than the devil you don’t know.