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Vapor Intrusion and Vapor Intrusion Assessment

Vapor intrusion is a real business environmental risk.  Over the past several years, there's been a growing body of evidence that chemicals can penetrate building foundations at levels that raise health concerns for the occupants.  Vapor intrusion can result from contamination onsite, or offsite when chemical contamination travels underground.  There have been increasing numbers of lawsuits involving vapor intrusion issues.

This page is dedicated to informing commercial and industrial real estate buyers, sellers, lenders, attorneys and brokers on vapor intrusion issues and vapor intrusion assessment.

Background

An indoor air quality issue, vapor intrusion develops when rapidly evaporating (volatile) chemicals found in polluted soil and groundwater make their way into the air of overlying buildings, similar to the way that naturally occurring radon gas seeps into homes.  To become an environmental concern, vapor intrusion requires a source, an inhabited building, and a pathway from the source to building occupants. Any type of property can be affected—industrial, commercial or residential—and the condition can lead to serious health issues such as headache, nausea, eye irritation, respiratory problems and an increased likelihood of developing cancer.

There are compelling reasons why vapor intrusion needs to be considered in the course of environmental due diligence.  

For lenders, the concern is fourfold.  

1. A vapor intrusion condition can adversely impact the value of the property used as collateral. 

2.  It can have a negative impact on the borrower’s creditworthiness and ability to repay the loan.   

3. The condition can lead to complications should foreclosure occur.  

4.  A vapor intrusion claim can damage a bank’s reputation, brand and image. 

 Borrowers have even more reason to be concerned.  

• A vapor intrusion condition can lead to liability from lessees and rent losses occurring as the result of tenants citing the “unsafe working environment” rationale to break leases.   

• A property with a vapor intrusion condition can become devalued, stigmatized, or both, making it difficult, if not impossible, for the owner to attract new tenants or sell the property. 

• Vapor intrusion also presents a potential for costly toxic-tort litigation.  

• Because a vapor intrusion condition is sometimes caused by contamination that falls under the umbrella of CERCLA’s hazardous substances, owners could be held liable for cleanup under federal CERCLA and state CERCLA-based programs.   

• As evidenced by news reports, properties that were considered clean are currently being reopened and reexamined for vapor intrusion risks. This means that site owners with “no further action” letters can no longer assume these sites are safe from further environmental problems.  As property owners in many states have already discovered, these properties may be reopened for additional investigation, possibly at the owner’s expense.

Vapor Intrusion Condition is a real business environmental risk in the same way or more so than, for example, lead-based paint, asbestos and mold are.  According to a 2008 Environmental Bankers Association survey, when a property is affected by vapor intrusion, the credit activities most affected include commercial real estate-secured lending, commercial lending, residential lending and trust activities.  When vapor intrusion is suspected, EBA’s survey found that lenders most often take a two-pronged approach, requiring both an ASTM E 1527-05-compliant Phase I ESA and a vapor intrusion assessment.

New Guidelines

Today, many states have some form of vapor intrusion policy or guidance on their books or in development, and with all the activity surrounding vapor intrusion, others can be expected to follow suit.  Real estate investors purchasing property in all states should screen for the condition early on in the transaction, not only to determine whether the property is a sound investment, but also to demonstrate to state regulators that measures to assess and address the risk have been taken.

Conclusion

Most commercial lenders are concerned about vapor intrusion and require the appropriate due diligence standard to counteract the effects of the condition on credit and trust underwriting activities.  Vapor intrusion is a real business risk.  Tier 1 Vapor Intrusion Assessment is designed to be used early on in the real estate transaction process.  And VIA is a conservative screening effort that environmental professionals can use to quickly and inexpensively weed out properties unlikely to have a vapor intrusion issue and addresses the condition specifically as it impacts real estate transactions.

Note:

In the best interest of our clients and their lenders, Due Diligence Inspection and Assessment has integrated Vapor Intrusion Assessment into our standard Phase 1 Environmental Assessment Protocol.  At Due Diligence Inspection and Assessment there is no additional fee; All Due Diligence Inspection and Assessment quotes and proposals include Tier 1 Vapor Intrusion Assessment.   

CONTACT US

Contact our Senior Environmental Professional directly
Call Edward Devine at 

585-738-5080

or request a quote by e-mail and we'll respond promptly.                                                                                                                                                   

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The potential for vapor intrusion is assessed according to a number of factors:

·         Relative elevation of contaminated site: vapors are less likely to migrate from downgradient sites

·         Critical distance for contamination from Chemicals of Concern (COC)

·         Critical distance for contamination from petroleum based products

·         Soil type: contamination and vapors travel more readily through some soil types

·         Hydraulic separation: a stream between properties generally precludes vapor migration

·         Site status: a closed site where no release exists generally does not generate vapors  

contact us by e-mail or call us at 585-738-5080.

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         VAPOR INTRUSION VAPOR INTRUSION  VAPOR INTRUSION VAPOR INTRUSION VAPOR INTRUSION
NY NJ PA MA RI MD VA GA OH FL NH ME AL AR AZ CA CO DE ID IN IA KS KY LA MI MN MS MO MT NE NV NM NC ND OK OR PA RI SC SD TN TX UT VT WA WV WI WY NY NJ DC MA RI FL VA GA  MD