What You Should Know about the Environmental Effects of Building Developments for the Real Estate License Exam - dummies

What You Should Know about the Environmental Effects of Building Developments for the Real Estate License Exam

By John A. Yoegel

The Real Estate License Exam will expect you to have an environmental conscience. Many land development projects, everything from building a single house to a major shopping center or multi-lot subdivision, impact the environment. The impacts are usually proportional to the size of the project, but a small project can have a large impact if it’s built on environmentally sensitive land, such as a single-family house built near a wetland.

Environmental impact statements

Laws governing the examination of the environmental impacts of a proposed project vary from state to state. If environmental issues are part of your state exam, check out the particular rules and regulations that govern the review or impact study of environmental issues with respect to a proposed development project.

An environmental impact statement examines the environmental impact a development project may have on the environment. Depending on the state requirements, such a statement may look at everything from the number of cars that will be put on the road to the animal life that will be disturbed. The study reviews both the impact of the project when it’s completed and the impact it may have while it’s being built.

An environmental impact statement or study sometimes requires that alternatives be presented and examined. For example, a developer may be required to examine various access roads into a new subdivision and then explain why the one selected is best. The study also usually requires a discussion of mitigation measures. Mitigation measures are those things that might be done to minimize or eliminate the environmental impact of the project.

For example, a developer expects the shopping center he’s building to generate a great deal of car traffic (car traffic equals air pollution). He may agree to provide room at the shopping center for a bus stop to encourage people to take public transportation, thus reducing the number of cars used.

Experts in environmental matters prepare these statements or studies. The public and key agencies may be invited to comment on the study. These studies can be expensive and time-consuming depending on the project’s complexity.

Environmental assessments

When someone involved in a real estate transaction suspects the presence of hazardous material on a piece of property, an environmental assessment may be performed by environmental engineers or scientists. An environmental assessment has four possible phases:

  • Phase 1: A Phase 1 environmental assessment is primarily a review of the records regarding the property in question. The records that are reviewed focus on any environmental complaints, violations, special permits, or other documentation that may indicate the current or previous presence of environmentally hazardous material. This phase also includes a visual inspection of the property.

    Phase 1 environmental assessments are commonly done before someone purchases an industrial or commercial property and are often required by mortgage lenders before approving a loan.

  • Phase 2: A Phase 2 environmental assessment involves actually testing and sampling to confirm the presence of any environmentally hazardous material or contamination.

  • Phase 3: A Phase 3 environmental assessment is done after the confirmation of contamination on the property. The Phase 3 assessment examines the extent of the hazard and develops a plan to remedy the condition. Remediation is done as a result of this phase and may include removal of the contaminated material and restoration of the property.

  • Phase 4: A Phase 4 environmental assessment is the development of a management plan for the contaminated site. Sometimes the contamination may be too large or extensive to be removed, and Phase 4 establishes a specific management plan to contain and manage the site so as to not affect surrounding properties.