Buying commercial or industrial property without conducting environmental due diligence can expose purchasers to unexpected costs and regulatory issues. Early investigation allows buyers to better understand a property’s environmental history and make informed business decisions.

What is environmental due diligence?

Environmental due diligence is the process of evaluating a property’s environmental condition before acquisition. It may include reviewing historical uses, regulatory records, environmental permits, prior remediation, underground storage tanks, and environmental site assessments.

Why is environmental due diligence important?

A thorough review helps identify potential contamination, regulatory compliance issues, and other environmental concerns that could affect financing, redevelopment, operations, or future liability. It also supports informed negotiations and risk allocation.

What should buyers review?

Common due diligence activities include obtaining a Phase I Environmental Site Assessment, reviewing NJDEP records, evaluating permits and compliance history, determining whether remediation is ongoing, and assessing historical industrial or commercial operations.

Common misconceptions

A standard property inspection is not the same as environmental due diligence. Even well-maintained properties may have historical environmental conditions that require additional investigation.

Key Takeaways

  • Begin environmental due diligence early.
    • Obtain appropriate environmental assessments.
    • Review NJDEP records and compliance history.
    • Coordinate legal and technical professionals.
    • Address significant environmental concerns before closing whenever possible.

When should you contact an attorney?

Consult an environmental attorney before purchasing commercial or industrial property whenever environmental reports identify concerns, regulatory obligations may apply, or contractual provisions involving environmental liability require review.

Contact The Law Office of Alan S. Ashkinaze

The Law Office of Alan S. Ashkinaze advises buyers, sellers, developers, investors, lenders, and commercial property owners throughout New Jersey on environmental due diligence, regulatory compliance, remediation matters, and commercial real estate transactions.