The Gross Domestic Product of the US grew by 3.2% in the third quarter of 2017. The economy is booming right now, and there is a pretty good chance that your business is doing well too. Many companies are trying to attain even greater profitability by taking out loans to purchase more land.
If you are considering doing this, you should know that there are some steps that you have to complete. If the loan requires any type of environmental investigations on the property, we can help. Keep reading for our checklist on what you need to do for taking out a commercial property loan.
Existing Conditions Report from a Licensed Architect or Engineer
Before you buy property, it is a good idea to know what you are getting. Some buildings may need repairs or renovation. In worst case scenarios, you might even find that there is structural damage on the site. If that does not dissuade you entirely, it will at least reduce your cost for purchasing the property.
Many people have a walk-through of the property when they are thinking about purchasing land. While you may have a sharp eye, it is worth it to have a professional examine the property. A regular business owner may be able to spot severe issues, but an environmental professional can see small issues that could become big issues in the future.
Phase I Environmental Assessment
This environmental audit is there to help you understand what problems may be present on the property but not necessarily visible. An environmental consultant will research the history of the site, and of some adjacent properties, to evaluate the probability of contamination. As part of this, the consultant will check to see if any environmental liens have been placed on the property and ensure that the property is compliant with federal, state, and local regulations.
There is a field component to this as well. A team will go out and interview the seller and adjacent property owners to guarantee that there are no environmental liabilities. They will then do a comprehensive site inspection to identify and assess any possible chemical and/or hazardous materials spills or hazardous conditions in general.
If the environmental consultants find any hazardous substances, they will then conduct a Phase II Assessment. This confirms the absence, or presence, type, and extent of contamination. The team may sample the soil, groundwater, and/or surface water. Samples are then analyzed in a state-certified lab.
It may hurt your business if the land and building are not valued properly. In the interest of fairness to all sides, it is wise to go through a trusted appraiser who can give you the exact value of the land. However, a Phase I or II Environmental Assessment may affect the appraisal, so it is best to do these investigations early in the process.
If you have questions about any environmental issues on your potential commercial property, we can help. Our team of experienced, reliable, and knowledgeable consultants and engineers has been in business for more than two decades. Contact us today.