There is a limited defense under the environmental liability laws for a purchaser who in good faith conducts a competent phase 1 that finds no basis for further inquiry. (You Need to conduct your OWN phase 1; NOT accepting an old one. You NEED to do this when you buy it, NOT later. This is a VERY NARROW exception—you want to be protected by it.).
If your phase I report indicates a credible factual basis for environmental phase 2 testing, then you would also need to do that to qualify for this defense.
These environmental liability laws are probably the scariest form of liability on the planet—the fact that you are absolutely faultless is NO defense—it is a form of status liability. Your status as owner (or long term lessee) can make you absolutely liable. Once you get a PRP letter from the EPA, the party’s pretty much over, unless you can causally prove that your land
isn’t the cause (Which will costs you more in experts than you can possibly believe. Plus, trying to causally sort out the source of pollution is frequently impossible—Good Luck. If you contributed one teaspoon of pollution and another polluter contributed 30 dump trucks—Guess what? If the 2 are mixed together and can’t be separated—which is usually the case—then both of you are equally liable.). The fact that someone else originally caused is usually irrelevant—they are typically judgement proof and out of the picture—unless you have performed the Phase 1 (and/or Phase 2) and can assert this as a defense. Otherwise, you’re toast.
And no lender will even consider lending any money without a competently performed phase 1. If you wait to refinance, then you will probably need another one (depending on how long) when you refinance.
Lenders are (rightfully) afraid of environmental liability. If you ever plan to sell your park, you’re going to need it anyway. Unless you are absolutely certain you will never need to sell or refinance the park as long as you live (and how can you be?), I think you pretty much need it.
BTW, if you get enhanced title coverage with an ATLA policy, the fact that you have a survey of the property, can actually serve to increase your title
coverage. (Certain coverages ONLY apply if have a survey.) IMHO,
a CTLA policy may be sufficient for a house, but for a commercial property of any real value, you really want ATLA (or an enhanced title policy available in your jurisdiction). Although I would have to say that having a Phase 1 is far more important than the survey.
In some places I have practiced (e.g, Dallas), a survey was required in ALL residential transactions.
Post Edited (10-23-07 14:30)