Beware of unscrupulous environmental testing companies that reflexively recommend expensive Phase II testing of properties under contract. Frequently such recommendations are made even before the results are in from the Phase I report and without any apparent problems.
Another scheme is for such companies to write Phase I reports that create just enough ambiguity by indicating a property might have an environmental problem (which can only be determined by expensive Phase II testing) without identifying anything specific. In such cases buyers and lenders, rightfully risk averse and nervous about the report, insist that the seller order and pay for the Phase II. The sellers are dismayed because they are unaware of any environmental problems and don’t think they should have to pay to find something that isn’t there.
When environmental problems exist, they should be dealt with. When they don’t, environmental testing companies shouldn’t unnecessarily raise red flags to generate work. The best solution is to hire a reputable environmental testing company (and there are many) for real estate transactions.
Steven Karbank
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