United States Congress passed stringent environmental statutes which Environmental Protection Agency [EPA] implemented via regulations. The statutes and regulations can mandate costly remediation action on property owners, whether the owner caused the environmental problem or not.
Accordingly, financing of property acquisitions is hampered and, in some cases, made impossible by environmental liabilities found on the property. Thus, financial institutions require preacquisition audits [environmental site assessments] of properties prior to funding. This paper discusses the use of preacquisition audits by sellers, purchasers and financial institutions and some of the findings associated with the audits.