SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
RICS DILAPIDATIONS FORUM ANNUAL CONFERENCE
ENVIRONMENTAL ISSUES AND SOLUTIONS(AN ENVIRONMENTAL LAND QUALITY VIEW)
ALUN DYSON OF RAMBOLL ENVIRON
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
NATURAL SOILS UNDERLYING A
PROPERTY DO NOT EASILY FALL
INTO DECAY OR DISREPAIR.
POLLUTION IS THE CAUSE OF
LAND DILAPIDATION, NAMELY
THE KNOWING OR ACCIDENTAL
INTRODUCTION OF HAZARDOUS
LIQUIDS AND SOLIDS.
WHO?
• Landowners;
• Tenants;
• Vendor;
• Purchasers;
• Banks / Financial;
• Insurance; and
• Advisors
RICS GUIDANCE NOTE ‘CONTAMINATION, THE ENVIRONMENT AND SUSTAINABILITY’
ENVIRONMENTAL LIABILITY: COMMERCIAL PROPERTY
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
INDUSTRIAL POLLUTION CAUSING DILAPIDATION
• POOR HOUSEKEEPING;
• NO SECONDARY CONTAINMENT;
• OPERATIONAL ACTIVITY FAILURE;
• ACCIDENTIAL / CATASTROPHIC FAILURE;
• WASTE ON LAND;
• DISCHARGE TO CONTROLLED WATERS..
COMPLIANCE WITH ENVIRONMENTAL PERMITTING SYSTEM.
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
CAUSE AND EFFECT
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
LAND QUALITY (PART 2A OF THE ENVIRONMENTAL PROTECTION ACT 1990)
• SOURCE, PATHWAY, RECEPTOR
• CONCEPTUAL MODEL / ENVIRONMENTAL RISK;
• PHASE 1/2 INVESTIGATIONS;
• CONTINUED EXISTING USE OR REDEVELOPMENT;
• Significant harm / pollution or significant possibility of significant harm / pollution:
• Introduction of a pollution linkage to potentially impact humans, animals, plants, air, soil, water, property and buildings.
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
LAND QUALITY ?
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
ISSUES FOR LANDOWNERS AND TENANTS
Objectives
• Are potential polluting uses taking place or have taken place?
• Do I have sufficient information to assure Regulator enquiries?
• Define who has polluted;
• Voluntary actions or enforcement notices?
Prevent Future Pollution
• Active management of property portfolio.
• Determine and quantify liability;
• Make property users responsible for their actions: minimum standards;
• Keep an eye on what’s happening over the fence and how it might change.
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
ISSUES FOR VALUATION / SELLING (MATERIAL CONSIDERATIONS AS PART OF THE VALUATION PROCESS)
Objectives:
• Minimise or eliminate any on-going environmental liability;
• Maximise value of assets, in particular the land value;
• Black art - how to balance these two.
Options
• Due diligence inspections;
• Compliance with relevant environmental laws;
• Consider insurance solutions;
• Warranties and indemnities: (Sold With Information).
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
ISSUES FOR LENDERS (AND BUYERS)
Objectives
• Avoid buying or investing into liability;
• Minimise the cost of asset / land.
Striking The Balance
• “Caveat emptor” doesn’t over-ride “polluter pays”; and
• You may not be the polluter (cause or knowingly permit contamination), but you might become the “last man standing” as owner/tenant and knowing permitter;
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
MANAGING THE ASSET
Ongoing Environmental Management
• Accreditation (ISO 14001)
• Audits
• Environmental permits
• Baseline Land Quality
Sale of Site
• Due Diligence Audits
• Phase 1/2 (Due Diligence)
• Remediation / Mitigation.
• Sold with Information / Warranties.
Tenancy
• Entry Surveys
• Audits
• Exit Surveys
• Environmental Rules.
Re-Development
• Development Plan
• Phase 1/2
• Development Design
• Remediation
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
SEPTEMBER 2016
ENVIRONMENTAL ISSUES AND SOLUTIONS
START
Is Your Land
CLEAN?
WHAT A
SHAME!
DID YOU
DO IT?CAN YOU
PIN IT ON SOMEONE ELSE?
DO THEY HAVE A DEEPER POCKET?
YES
YES
YES
CAN YOU
AFFORD
THE
LAWYER?
TRY NOT
TO PANICNO
YOU’RE
DAMN
LUCKY!
DON’T SCREW
WITH IT!
DO THE
AGENCIES
KNOW?
PANIC!!
YES
NO
NO
NO
OPEN CHEQUEBOOK,
START WRITING
END
YES
FIXIT, HIDE IT, SELL IT
NO
NO
YES
California Environmental Responsibility Assessment Process