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Environmental Due Diligence 101 - Why is it required?

A brief history of the laws and standards behind environmental due diligence, and why it is conducted prior to a CRE transaction.

By Erika Petty | Updated on October 27, 2011

Why does the commercial real estate industry do environmental due diligence during a transaction?  What are some of the laws that created the need for environmental scrutiny, and why is a Phase 1 Environmental Site Assessment often required? 

For those that may not be familiar, below is a brief background on where all these requirements came from (and a whole bunch of acronyms that go with them). 

Genesis of Environmental Due Diligence:  Superfund, CERCLA, AAI and ASTM

You may have heard of Love Canal or Valley of the Drums, which were two major pollution sites discovered in the 1970s that caused public outrage and were the impetus for significant federal environmental regulation to hold polluters accountable for contamination and cleanup costs. 

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