All Forum Posts by: Lawrence P. Schnapf

wetlands may be regulated at the local, state and federal level. Federal wetlands are evaluated using three criteria- vegetation, soil and hydrology. You can obtain a Jurisdictional Determination from the local Army Corps office. Even if there are federally-regulated wetlands, you can sometimes get a mitigation compensation plan approved that allows destruction of some wetlands in exchange for either creating a new one or buying credits from a wetlands bank.   

The dry cleaner and gas station are off-site concerns. Your consultant can tell you if they have "open" or "closed" spills or no spills reported. The former use as a auto repair could present some concerns and you should find out how the former heating oil tank was abandoned (removed, closed in place, etc). since you are converting this building as opposed to demo so you wont be excavating impacted soil, the principal concern would be potential for vapor intrusion since you're planning on converting to residential. this can be addressed with a system similar to radon system. Sub-slab soil gas samples will tell you if there is potential for vapor intrusion. you need to find out if your state requires disclosure of these past uses. if so, it probably would make sense to do the sampling and then install the vapor system if you have exceedances so you have a good story to tell. 

Your state has a voluntary cleanup program. if you find exceedances in the soil gas, you should ask your lawyer about enrolling in the state program. this way, you can show your future residents that your cleanup got the blessing of the state.  

presumably a future buyer will be concerned about past dry cleaner use. However, if there are no dry cleaning operations while you own the building, you could try to assuage concerns of potential buyers by sharing phase 2 results....if they are clean. 

There are over 200 dry cleaner sites on the NYSDEC superfund list. You should do a thorough phase 2 to make sure you are not buying a liability. If the seller does not let you do a phase 2, walk away. 

studies have shown that 75% to 80% of dry cleaners have leaked. Presumably the dry cleaner uses chlorinated solvents (many now use petroleum-based chemicals which are "greener"). If the seller will let you do a phase 2, you should do it. You'll want to have sub-slab sampling of the soil gas to see if there is a potential for vapor intrusion as well as groundwater.  most sellers are reluctant to allow sampling for fear they will be in worst condition if the buyer finds contamination and then walks. the other question is are you going to finance the acquisition? your lender will likely want a phase 2. What state is the property located? I wrote an article called "Dry Cleaners: The Scourge of Commercial Real Estate" which has alot of info about dry cleaner issues. 

If the lender is going to securitize the loan or package it in a CLO, they will need a current phase 1 (six months or less, or updated from 6 to 12 months old)

Lenders generally require phase 1 on constructed properties. A phase 1 is good for six months. between 6-12 months, some components need to be updated. After one year, a new phase 1 needs to be performed.

Many lenders have their own scopes that go beyond the standard phase 1 such as asbestos, LBP, radon and lead in drinking water. So even if timely, phase 1 may not satisfy lender requirements.

Many lenders also have list of approved consultants. If the phase 1 otherwise satisfies lender requirements and is not stale, you could get a lender-approved consultant to do a desk top review (usually $250-$500) to allow the phase 1 to be used.

You didnt expressly mention (or I missed it) that the unit is part of a condo association. This adds to your potential liability since you would be help responsible by the condo association for leasing to tenant who violates the association rules. You may want to send a notice of lease default due to the unpermitted use and give tenant 30 days opportunity to cure. You should also check your association rules to see if you have any obligation to notify the association of any violations of the rules....

you didnt mention what state. if its Florida, i can refer you to a good condo lawyer... 

your tenant would have to comply with a variety of environmental laws and as owner of the property, you could become liable if the tenant contaminants your property. how is waste oil and other autofluids managed? does the garage have a floor drain? if so, does it discharge to sewer or septic system. The tenant should not be allowed to discharge any fluids into the sewer or septic system. you will want them to use secondary containment for all waste storage containers. as you can see, there can be lots of regulatory issues.  

my contact info is on my profile.