Why you should do an environmental audit before leasing a place

If your company is thinkingof leasing a facility, you should always do a baseline environmental audit of the place. What you want to do is to identify any pre-existing environmental contamination at the site before you occupy it. There are many consultants who are qualified to do Phase I and Phase II environmental assessment.  Once you have identified any pre-existing contamination, you include the findings in your lease so that when you return the site to the landlord, you will only need to return it at the baseline condition.

This is the best (and possibly) only defense you have against a landlord who falsely claims that the property (previously contaminated by the tenant before you) you have been occupying for the past ten years was pristine when you moved in.

That’s what happened to a large corporation in California. It moved into a facility without doing a baseline environmental assessment. The manager there was trying to save $20,000. When it completed its lease ten years later, the landlord claimed that the company had contaminated his pristine property and demanded that it be cleaned iStock_000002586110XSmallup. As it turned, it was a previous tenant that had dumped toxic solvents into an underground tank that subsequently leaked. Without the defense of a baseline assessment, the company had to remove the leaking underground storage tank and clean up the soil contamination. It also had to remove some asbestos containing material from the site. The total cleanup cost to the company was close to $600,000. 

All of this could have been avoided if the company had spent $20,000 ten years earlier.

That was one happy landlord. He saved $600,000!


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