A Baseline Environmental Assessment (BEA) is a mechanism whereby you can purchase a known contaminated property without accepting liability for environmental contamination caused by someone else. The State of Michigan, in an attempt to facilitate redevelopment of vacant commercial and industrial properties, has developed the BEA process whereby the purchaser discloses to the state the environmental condition of a property prior to or immediately following purchase, foreclosure, or occupancy. This document is used as the baseline from which to compare the environmental condition of the site when assigning liability for clean-up.

Anyone who is thinking of buying a property where contamination is known to exist can qualify for a BEA, as long as they have not owned the site or operated at the site prior to purchasing the property. In addition to the buyer qualifying for the BEA, the site must meet certain conditions. Specifically, the site must be classified as a Facility under Michigan Law. A Facility is any property where contamination has been detected at levels exceeding generic residential clean-up criteria set by the Michigan Department of Environmental Quality (MDEQ).

The BEA process is a natural extension of the Phase I Environmental Assessment. (ESA). Whenever you purchase a commercial or industrial property, a Phase I ESA is recommended. This will investigate the history of the property to determine the likelihood of contamination at a particular site. If a potential problem is uncovered, testing can occur to confirm or deny the suspicions. If contamination is detected, the site can be declared a Facility, and a BEA may be completed to prevent the buyer form inheriting environmental liability. In some cases, the contamination is already documented, and the BEA process can begin immediately. The BEA will then be prepared following the guidelines set forth by the MDEQ. The document will be used in the future as a tool for distinguishing new contamination from pre-existing conditions.

No! BEAs are classified based on the past and future uses of the property. There are three classifications. The Type N BEA is used when no hazardous substances will be used, stored or disposed of at the property in the future. Type D BEAs are conducted when hazardous chemicals will be used on site, but they are different from those that have impacted the site. The final classification, a Type S BEA is conducted for properties where the future use of hazardous materials will be the same as past use. As you progress for Type N to Type D to Type S BEAs, the documents become more complex, and cost more to complete.

A BEA should be completed before or immediately after you purchase a contaminated property. The State has very strict timelines for the completion of a BEA. If those guidelines are not met, the BEA is useless, and you could be held liable for pre-existing contamination at the property.

No! The BEA allows you to purchase a contaminated property without liability, but State law requires that you operate the site in a safe manner to prevent possible exposure to the contamination on site. This is called ”Due Care” requirements. The State requires that you have a “Due Care Compliance Analysis” available at the site for inspection within 6 months after purchase of the property. The complexity of this document varies along with the type of BEA and the pre-existing conditions at the site.

Global Environmental Engineering, Inc. maintains a staff of well-trained environmental professionals who have experience with all aspects of the BEA process. Our staff has successfully obtained State approval for all three types of BEAs on numerous sites. Global works closely with the buyer, seller, financial institution, and/or realtor to achieve the goal of a successful real estate transaction without the fear of future liability.