Lender Frequently Asked Questions
Q: What type of report are other lenders requiring?
A: Each bank has its own policy on managing environmental risk. However, as more lenders become aware of the new changes and risk associated, they are requiring stricter reports like the ASTM 1527-05/13
Q: Does ordering the new ASTM standard report take any longer to complete?
A: The work MECC does to comply with the new standard does NOT take any longer to complete. However there is now greater emphasis on reviewing regulatory documents that may be available for the site or adjacent properties. Obtaining these documents in some cases will take longer than anticipated.
Q: We are making a small loan on a property and trying to keep the cost down for the borrower. What would you recommend?
A: Bank policy may have a provision for lesser environmental reports (database/historical review or transaction screen) on smaller loans especially in a re-finance situation. MECC can provide whatever style report requested to help with mitigating potential environmental risk.
Q: Why should I be concerned with a potential dry-cleaner that may have been at the property many years ago?
A: Dry-cleaning chemicals can impact a site for many years as they do not dissolve easily like petroleum products (oil, gasoline, diesel fuel). The only way to determine that no impact (contamination) is present is to conduct a phase II investigation.
Q: Why should I care if contamination is present, if as a lender, I have a secured creditor protection?
A: The value of the property is significantly impacted if contamination is present in the soil/ground water/air.
Purchaser Frequently Asked Questions
Q: Can my report be certified to my lender?
A: MECC does provide reliance letters for a lending institution as long as the report was prepared within the ASTM recommended shelf life of 180 days. We typically charge $350.00 for this service
Q: What are the protections offered to a buyer in the new ASTM standard?
A: As long as the report meets the definition of the All Appropriate Inquiry (AAI) rule, (which the ASTM E1527-13 report does), the owner of the report will be entitled to such protections as innocent landowner defense and bona fide purchaser protection
Q: The seller has a phase one report from when he purchased the property that he is willing to give me. Can I use it?
A: For informational purposes only. As the buyer you would need a report addressed to you in order to qualify for the protections above. As the new standard was released and approved by the EPA in late 2013, chances are the report a seller wants to share does not meet the new standard.
Q: Your firm is not on the list of approved vendors that my bank uses?
A: In a purchase, you should be able to use who you want as part of your due diligence. Many banks will accept the report but charge a fee for one of their approved vendors to review.