Discovering Environmental Contamination During a Real Estate Transaction

By: Rick Bean, Chief, Remedial Section

The discovery of environmental contamination often arises during a real estate transaction. A prospective buyer, bank, lending institution and/or developer will retain an environmental consultant to perform a Phase I investigation of the site to identify the presence of environmental contamination on a property. The Phase I generally consists of a site reconnaissance, historical review, and regulatory agency records review and should follow the procedures outlined by the American Society for Testing and Materials (ASTM). Information from the Phase I is evaluated by the environmental consultant. Based on the findings, an intrusive sampling investigation, more commonly referred to as a Phase II assessment, can be recommended.

During the Phase II, numerous soil borings and/or ground water probes are installed to obtain representative soil and ground water samples. These samples are analyzed for potential contaminants of interest identified during the Phase I. Phase II findings are presented to the purchaser by the environmental consultant, who in turn advises the seller. In many cases, even if a seller has not contributed to or caused the contamination, current environmental regulations designate the current property owner as a responsible party. Subsequently, in order to facilitate the property transaction, the seller is typically forced to assume liability for any additional work that may be necessary in order to receive a "No Further Action" letter from the Kansas Department of Health and Environment (KDHE).

The next critical step is communication with KDHE, the entity with regulatory oversight responsibility for environmental contamination in the State of Kansas. A proactive approach between KDHE and the responsible party can be extremely effective. Meeting with KDHE to enable the agency to gain a clear understanding of the site history and meet the project team can establish credibility and can often lead to significant cost savings. A legal document or voluntary agreement which outlines the future responsibilities is signed between the agency and responsible party.

Another step is the retention of a qualified environmental consultant. This is one of the most important decisions for the responsible party in effectively managing costs to investigate and remediate a contaminated site. The responsible party wants someone who is technically qualified and competent, and will take the time to communicate the substantive aspects of the project to the responsible party and KDHE.

The responsible party should obtain proposals, timelines and budgets in order to effectively manage the project. An environmental consultant should be able to provide this information in a clear, concise and timely fashion. The environmental consultant should be able to provide references and be qualified to perform environmental work in the state, which may require a geologist or engineering license.

KDHE will likely require complete delineation of the contamination. This means determining the boundaries or the contamination both horizontally and vertically and identifying potential sensitive receptors such as drinking water wells, etc. The strategy to define the horizontal and vertical extent of soil impact and/or ground water contaminant plumes is extremely site-specific. It is most effectively accomplished by a knowledgeable environmental professional, utilizing a variety of field investigative methodologies, with the accumulated experience to effectively interpret the data generated. Some accepted methodologies for subsurface delineation of contamination include soil borings, soil/bedrock coring, and ground water monitoring wells. Data generated from the investigative/sampling activities are typically analyzed graphically and statistically, and may be incorporated into computer models.

After the contamination has been fully delineated, a determination of the appropriate remediation technology is the next step in controlling overall project costs. Some of the factors that affect remedial costs are: regulatory acceptance, end-use of the sites, presence/absence of recalcitrant separate-phase product, depth of contamination and rate of plume migration.

Widely accepted remedial technologies include traditional pump and treat, soil vapor extraction, air sparging, excavation, and natural attenuation. A risk assessment can be performed to determine the level of risk and subsequent remedial technology necessary to adequately address the risk. KDHE has a risk-based, look-up table for contaminants to assist a responsible party in determining cleanup standards.

KDHE also encourages the evaluation of numerous emerging technologies which include reactive/barrier walls, steam-injection, in-situ oxidation (permanganate, ORC, Fenton's Reagent), and in-situ reduction (molasses injection). The responsible party should remember; however, that the cleanup of contamination to the required risk-based levels is entirely performance-based. If cleanup is not accomplished by selected remedial technology, then additional cleanup may be required by KDHE. In many cases, a combination of technologies is most effective.

Remedial technologies and overall project costs are evaluated based on site applicability, cleanup goals, available utilities, disposal options, duration, initial capital costs, monitoring, and operation and maintenance costs.