The importance of due diligence in most circumstances is well documented. That includes occasions where you’re selling a business or where you’re signing a lucrative contract. But there are certain areas of due diligence that can go unnoticed. One of the most important of these in recent years has become environmental concerns.
Many companies overlook the need to hire an environmental consultant when assessing property. But we’re going to highlight just how important it is to ensure your deal goes smoothly.
What is Environmental Due Diligence, and What is an Environmental Consultant?
Before we go into how important environmental due diligence is, let’s first answer the two main initial questions. Firstly, what exactly is environmental due diligence?
Due diligence refers to how you investigate things before agreeing. For example, it includes researching a company before you enter into a contract with them.
It may include background checks before hiring an employee. Or, it could include reading a contract before signing it. Environmental due diligence is a specific extension of this idea. It refers to any due diligence that’s conducted before an agreement that relates to the environment. This includes things like checking the soil of a building for contamination.
It may also include the likelihood of coastal erosion for properties near the edge of land. These are things that certain property buyers might forget to factor in. This form of due diligence is usually handled by someone called an environmental consultant. These are third parties who will assess a proposed agreement based on environmental factors.
Environmental consultants usually work for dedicated environmental consulting companies. They’ll often offer diverse environmental consulting services. These can include asbestos testing and site development. The latter of these would usually be carried out by a dedicated site development consultant.
Now that you know what both these two terms mean let’s go into why hiring an environmental consultant is so important when purchasing a property.
Environmental Consultants Can Check For Contamination
The first major reason why environmental consultants are important concerns contamination.
If you’re purchasing a property, it’s on you to conduct your own due diligence into contamination concerns before purchase. That means that if you purchase a property that’s contaminated, there’s no going back.
You could purchase a property that’s completely unfit for use. All of this will need to be covered by you since you’re now the owner of the property. This is the law in most American states today. The seller of the property does not have to indicate these potential problems to you before a sale. That means if you don’t hire a consultant, you can easily get caught out.
The cost of hiring an environmental consultant outweighs the potential cost of decontamination. You’ll also have to pay the toll of time, as you won’t be able to use your new property until it’s been cleaned.
Assessments Reveal Further Information About a Proposed Purchase
Another benefit of hiring an environmental consultant is the extra layer of information you’ll receive on a property.
A consultant will conduct a thorough examination of the property you’re looking to buy. They will then give this to you in what’s known as an environmental assessment. This will include all potential risks and concerns related to a property. If this assessment has no concerns, that shows that you’re purchasing a property that’s safe.
If it does uncover issues, you can assess how much this impacts the value of the property. This can allow you to negotiate deals with the seller based on your findings. It can also help you to create risk assessments before purchase. These risk assessments can be used to check whether a property is really worth the money or not.
None of this additional data would be possible without hiring an environmental consultant. You’ll have a comprehensive state of play for your potential purchase. This allows you to make an educated decision on whether or not to commit to the property or to search elsewhere.
Environmental Consultants Can Assess Areas of Improvement and Costs of a Property
Finally, environmental due diligence can reveal areas where a property can be improved.
This concerns more eco-friendly power. Or, it could mean other modifications that can improve the footprint of a property. Firstly, this means that your property will be better for the environment in the future. This is becoming increasingly important in today’s environment. Climate change continues to impact the real estate and commercial property sectors.
Not only can this information improve how eco-friendly your new property can be, but it can also assess the costs of running a property. This includes information like the energy costs of a particular unit. You can use this information to create thorough financial projections. These can then be mapped against the cost of the property to see if you’re making a worthwhile investment.
In addition to this comparison, you can assess areas where you can cut running costs in the future. This might be by shifting energy providers. Or, it could mean making changes to the water supply for the property itself.
All of these changes would only be possible with the right data collation beforehand. This is where environmental consultants can help you benefit from the purchase of a property. But in addition, they can also help improve the long-term financial benefits of owning it.
Where Can I Find Out More About Environmental Due Diligence?
You should now know how vital environmental due diligence is before buying. The work of an environmental consultant is essential to making sure you get the most value for money.
It also means you’re able to get a clearer picture of the property you’re hoping to invest in.
If you’re interested in hiring an environmental consultant, consider contacting us directly. We specialize in providing environmental consultancy in the Midwest area.
Call Midwest Environmental Consulting Services today to tell us all about your proposed project, so we can assess how best our team can help you.