This episode of In Our Expert Opinion Real Estate Podcast delves into the intricacies of land use, real estate, and environmental law with attorneys Robert Angus Williams and Lauren Brooks of Lewis, Longman & Walker. They discuss the crucial steps of environmental due diligence, including the importance of Phase I and Phase II Environmental Site Assessments, as well as important insights into navigating environmental challenges and legal strategies in property transactions.
Below is an excerpt from the interview. Listen above for the full podcast.
Real Estate Attorneys vs. Environmental Attorneys. (Brooks) The difference between a real estate attorney and an environmental attorney is your environmental attorney is going to deal with your endangered species, your listed species, wetlands issues, contamination issues, and things of that sort.
Robert Angus Williams, Shareholder at Lewis, Longman & Walker
Your real estate attorney is going to be helping the agent negotiate the contracts and negotiate the terms. We might get involved, for example, in a sales contract to maybe add some environmental indemnification language, but that's it. We have very separate and distinct roles.
(Williams) We typically get involved when there's going to be a touch between that land or water and your government. You got a bald eagle on your property? Well, there's state and federal government going to be involved in that so that's where we come in. Now, a lot of times, our consultants that we work with are phenomenal. They don't ever need to call us, which is good. We've got plenty to do, so it's fine, but when it gets sticky, that's where we step in.
What is a Phase I Environmental Site Assessment (ESA)? (Brooks) You're always going to want a Phase I when you have a commercial property. In your residential properties, that's not really a common test that you're going to do, but for your commercial properties, always.
Lauren Brooks, Senior Attorney at Lewis, Longman & Walker
A Phase I is an assessment that's conducted by an environmental professional. So that's going to be your geologist, your engineer, and they're going to do, initially, a desktop review of the current and the historical uses of the property. They're going to go into government databases and look at the regulatory documents that are linked to that property to see how it was used and see if there are any hazardous substances that were used or spilled or transported on that property.
They're going to go out and do a site assessment and sort of kick the dirt around and really see: Is the soil stained in certain areas? Are there any drums that are located on the property or any sort of anything that might be notable? They're going to condense all of those observations and all those findings into a written report, and that's your Phase I.
We do a lot of those assessments to make sure not only that they were done according to the regulation, but to see if there are any RECs (Recognized Environmental Concerns) in the Phase I that might necessitate a Phase II.
(Williams) I think a good example is you have an orange grove, and you've got a mixing shed right where you mix all your chemicals to spray on your crop. Is there soil standing around there? That's probably going to pop up as a REC. So it gives you two things: one, something's there because I see the soil staining and it also gives you the second piece, the other purpose of a Phase I, what are we going to test for? You know what should have been sprayed historically on an operation like this, so we're going to test for that.
Linda Schutlz invites environmental attorneys, Lauren Brooks and Robert Angus Williams, on the In Our Expert Opinion Real Estate Podcast to discuss issues and topics surrounding environmental assessments.
What is a Phase II ESA? (Brooks) The Phase II is when your environmental consultants put together a sampling plan. If it's an orange grove, you might want to sample for arsenic, you may want to sample for any number of chemicals that might have been used to treat that orange grove.
Once you get into a Phase II, if nothing pops up, then you're fine. If something comes up through those testing protocols, then maybe there's retesting, and maybe you move a little further into remediation of some kind. Remediation is just a fancy word for cleanup. Cleanup does not necessarily mean that you're actually cleaning the soil, it may mean you just don't touch it. You leave it there and let it attenuate.
(Williams) We have folks that will say, “We want to test for everything.” You don't want to test for everything because that's extremely expensive. If you don't think you have nuclear waste on your site, why are you testing for that, right? The Phase I helps with that a lot.