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Home > Tools and Resources > Buying a Business > Due Diligence - Environmental and Engineering Concerns

Due Diligence - Environmental and Engineering Concerns
Environmental and engineering issues are critical to buying or selling a business

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When buying or selling a business, it is crucial that environmental and engineering/structural issues not be overlooked. Identifying and resolving these issues is critical to both the buyer and seller. The seller should fully understand any potential issues before the business is placed on the market, and the buyer needs to know of any issues which could adversely impact value. Although these issues are most important in situations where real property ownership is being transferred, problems can arise even without a property transfer.

Environmental

With respect to environmental issues, a property next to the one you intend to buy may have had an oil spill which seeped under your business, or your building may have contained certain chemicals in the past. Even if you are not primarily liable, you may still be required to spend money to clean up these types of problems or to temporarily close your business while the situation is addressed. To avoid these problems, it's generally a good idea to get what's known as a Phase I environmental assessment. This is a relatively quick, cost-effective inquiry as to the existence of any environmental problems occurring at the business or in the general vicinity of the business.

Engineering/Structural

A property condition assessment includes a definitive analysis of current conditions and future needs relating to the physical structure that houses the business. Reports include reserve tables to forecast future costs and the timing of those costs. These projections will assist the buyer and its lenders to define the final conditions of the deal in terms that meet their needs.

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About The Author
EMG is the leading environmental and engineering consultant to the commercial real estate and finance industries. We employ more than 200 fulltime environmental engineers, licensed architects, professional engineers, seismic specialists and support personnel nationwide. This national presence enables quick response with a perspective based on solid local knowledge.

As your real estate assessment partner, we don't stop at just the bare facts. What you need most is to understand the implications of the facts--both for you and your investors. EMG knows how to communicate those implications in easy-to-read reports and crystal clear presentations. We'll take you beyond liability issues to help you evaluate options, forecast outcomes, and safeguard assets.

Founded in 1986, EMG has performed assessments on billions of dollars of commercial property. Working with buyers, sellers and lenders, EMG continues to establish policies, standards and protocols that are utilized nationwide. Consistent quality and timely delivery are ensured by its use of the ISO Quality Management System. Data Management and Web-enabled solutions are an integral part of EMG's services.

Conatct EMG
To learn more about Environmental Site Assessments, Property Condition Assessments or related services, contact Fritzi Byrnes at 1-800-733-0660, ext. 6408. Please identify yourself as a Bizquest referral for priority treatment.

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