SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

RICS DILAPIDATIONS FORUM ANNUAL CONFERENCE

ENVIRONMENTAL ISSUES AND SOLUTIONS(AN ENVIRONMENTAL LAND QUALITY VIEW)

ALUN DYSON OF RAMBOLL ENVIRON

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

NATURAL SOILS UNDERLYING A

PROPERTY DO NOT EASILY FALL

INTO DECAY OR DISREPAIR.

POLLUTION IS THE CAUSE OF

LAND DILAPIDATION, NAMELY

THE KNOWING OR ACCIDENTAL

INTRODUCTION OF HAZARDOUS

LIQUIDS AND SOLIDS.

WHO?

• Landowners;

• Tenants;

• Vendor;

• Purchasers;

• Banks / Financial;

• Insurance; and

• Advisors

RICS GUIDANCE NOTE ‘CONTAMINATION, THE ENVIRONMENT AND SUSTAINABILITY’

ENVIRONMENTAL LIABILITY: COMMERCIAL PROPERTY

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

INDUSTRIAL POLLUTION CAUSING DILAPIDATION

• POOR HOUSEKEEPING;

• NO SECONDARY CONTAINMENT;

• OPERATIONAL ACTIVITY FAILURE;

• ACCIDENTIAL / CATASTROPHIC FAILURE;

• WASTE ON LAND;

• DISCHARGE TO CONTROLLED WATERS..

COMPLIANCE WITH ENVIRONMENTAL PERMITTING SYSTEM.

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

CAUSE AND EFFECT

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

LAND QUALITY (PART 2A OF THE ENVIRONMENTAL PROTECTION ACT 1990)

• SOURCE, PATHWAY, RECEPTOR

• CONCEPTUAL MODEL / ENVIRONMENTAL RISK;

• PHASE 1/2 INVESTIGATIONS;

• CONTINUED EXISTING USE OR REDEVELOPMENT;

• Significant harm / pollution or significant possibility of significant harm / pollution:

• Introduction of a pollution linkage to potentially impact humans, animals, plants, air, soil, water, property and buildings.

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

LAND QUALITY ?

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

ISSUES FOR LANDOWNERS AND TENANTS

Objectives

• Are potential polluting uses taking place or have taken place?

• Do I have sufficient information to assure Regulator enquiries?

• Define who has polluted;

• Voluntary actions or enforcement notices?

Prevent Future Pollution

• Active management of property portfolio.

• Determine and quantify liability;

• Make property users responsible for their actions: minimum standards;

• Keep an eye on what’s happening over the fence and how it might change.

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

ISSUES FOR VALUATION / SELLING (MATERIAL CONSIDERATIONS AS PART OF THE VALUATION PROCESS)

Objectives:

• Minimise or eliminate any on-going environmental liability;

• Maximise value of assets, in particular the land value;

• Black art - how to balance these two.

Options

• Due diligence inspections;

• Compliance with relevant environmental laws;

• Consider insurance solutions;

• Warranties and indemnities: (Sold With Information).

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

ISSUES FOR LENDERS (AND BUYERS)

Objectives

• Avoid buying or investing into liability;

• Minimise the cost of asset / land.

Striking The Balance

• “Caveat emptor” doesn’t over-ride “polluter pays”; and

• You may not be the polluter (cause or knowingly permit contamination), but you might become the “last man standing” as owner/tenant and knowing permitter;

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

MANAGING THE ASSET

Ongoing Environmental Management

• Accreditation (ISO 14001)

• Audits

• Environmental permits

• Baseline Land Quality

Sale of Site

• Due Diligence Audits

• Phase 1/2 (Due Diligence)

• Remediation / Mitigation.

• Sold with Information / Warranties.

Tenancy

• Entry Surveys

• Audits

• Exit Surveys

• Environmental Rules.

Re-Development

• Development Plan

• Phase 1/2

• Development Design

• Remediation

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

SEPTEMBER 2016

ENVIRONMENTAL ISSUES AND SOLUTIONS

START

Is Your Land

CLEAN?

WHAT A

SHAME!

DID YOU

DO IT?CAN YOU

PIN IT ON SOMEONE ELSE?

DO THEY HAVE A DEEPER POCKET?

YES

YES

YES

CAN YOU

AFFORD

THE

LAWYER?

TRY NOT

TO PANICNO

YOU’RE

DAMN

LUCKY!

DON’T SCREW

WITH IT!

DO THE

AGENCIES

KNOW?

PANIC!!

YES

NO

NO

NO

OPEN CHEQUEBOOK,

START WRITING

END

YES

FIXIT, HIDE IT, SELL IT

NO

NO

YES

California Environmental Responsibility Assessment Process