Environmental Questionnaire Example?
. As part of the process of performing environmental due diligence on a commercial property the environmental professional or lending institution asks the participants in a transaction to fill out an environmental questionnaire. Two different types of questionnaires are meant for three different audiences. We did our best to simplify these questionnaires to be the most concise and easiest to deliver.
Records Search with Risk Assessment (RSRA) Questionnaire
The process of getting a RSRA begins with filling out a Small Business Administration (SBA) inspired environmental questionnaire. This questionnaire is generally delivered by the bank to the borrower. It helps determine if the borrower’s business is in an environmentally sensitive industry. If it is, then the borrower can’t use a RSRA and must instead use a Phase I Environmental Site Assessment (ESA) which is more expensive and takes longer. The entire process of how a RSRA works is outlined here. Our sample RSRA questionnaire can be downloaded by clicking here.
Phase I Environmental Site Assessment (ESA) Questionnaire
User of a Phase I ESA:
There’s a second type of questionnaire. As part of the Phase I ESA process, it is delivered to both the user of the Phase I ESA and the seller / tenant / manager of the commercial property which is being purchased. Things get confusing however when you have to determine who the “user” of a Phase I ESA is. Technically the user is whoever is paying for the report. When a bank is paying for a Phase I ESA, the bank is the user, even though they are not the buyer. A seller can buy a Phase I ESA too to get out in front of any environmental problems that may arise. A buyer could also not be borrowing money for a commercial transaction so they would be the user.
Why the user is important:
There are two different questionnaires for environmental due diligence and it’s important that the right party get the right questionnaire. We used an online questionnaire that could determine interactively who was who and get the right questions to the right people. We’ve found the user of the Phase I ESA is always trying dodge the questionnaire. This is due to their environmental professional not explaining it properly. A buyer who knows little, if anything, about a property needs to fill out the questionnaire establishing a baseline for what they don’t know. This provides them with a basis for the limitation from environmental liability known as “the innocent landowner defense”. If the questionnaire is returned, hypothetically exposing the client knew a lot about environmentally compromising things which were happening on the property, it would diminish their limitation from the liability of having to clean it up.
You will notice that depending on how you answer the questions, you’ll get different, yet entirely appropriate questions that dig deeper into the details. Feel free to test it out. It’s pretty easy to sign up with the same interactive service we use and build your own questionnaire. If you want, call us at (888) 405-1742 and we’ll make you a copy that you can edit and use yourself.