Environmental due diligence refers to the assessment of potential environmental liabilities associated with a property or project. Before acquiring a property or starting a project, buyers, investors, and developers want to identify and mitigate all the potential environmental risks it may entail. In Florida, where soil and groundwater contamination and former commercial and industrial sites pose unique challenges, environmental due diligence is a key step in property transactions. Skipping this step can lead to unforeseen costs, legal issues, and stalled projects.
Who Should Be Interested in Environmental Due Diligence?
Environmental due diligence is essential for various stakeholders, including:
- Real Estate Developers
- Property Buyers & Investors
- Lenders & Financial Institutions
- Business Owners & Tenants
- Government Entities & Municipalities
Because every property is unique, the due diligence process varies depending on factors like prior land use, location, and regulatory classification. An industrial site may require extensive soil and groundwater testing, while a coastal property might need an endangered species impact review. A tailored approach ensures that the most relevant risks are identified early. Working with a legal team familiar with Florida’s environmental regulations, such as Cobb Cole’s Environmental Law team, ensures that your due diligence investigation is properly structured and legally sound.
Purposes of Environmental Due Diligence
Environmental due diligence serves several critical functions:
- Identifying Environmental Risks & Liabilities – Uncovering contamination risks, such as soil or groundwater pollution, that could result in costly remediation.
- Limiting Liability for Undiscovered Risks – Conducting proper assessments can provide legal defenses under state and federal law, such as the Bona Fide Prospective Purchaser defense under CERCLA.
- Establishing a Track Record of Compliance – Due diligence demonstrates regulatory adherence and responsible business practices, reducing potential fines and legal disputes.
- Identifying Potential Opportunities – Discovering contamination might qualify a property for Florida’s Brownfields Redevelopment Program, offering tax incentives and liability protections.
Environmental Due Diligence Under Florida & Federal Law
Environmental due diligence may include some or all of the following steps:
Phase I Environmental Site Assessment (ESA)
- Conducted according to applicable ASTM standards.
- Includes historical records review, site inspection, and interviews to assess potential contamination.
- Identifies “Recognized Environmental Conditions” (RECs) that may require further investigation.
Phase II Environmental Site Assessment
- Involves soil, groundwater, and building material testing to confirm contamination.
- Required if Phase I identifies potential environmental risks.
Site Assessment, Remediation Planning & Risk Assessment
- Identifies the vertical and horizontal extent of contamination.
- Outlines cleanup options if contamination is found.
- Determines legal obligations under Florida and federal law.
Other Due Diligence Steps
- Wetlands & Endangered Species Review – Ensures compliance with the Florida Department of Environmental Protection (FDEP) and federal conservation laws.
- Air & Water Permitting Analysis – Ensures compliance with the Clean Water Act and Clean Air Act before development.
- Zoning & Land Use Assessments – Determine permissible land uses and restrictions.
The scope of environmental due diligence depends on the property’s characteristics. Determining the approach with help from environmental law attorneys ensures that the most relevant environmental risks are addressed.
The Consequences of Neglecting Environmental Due Diligence
Environmental due diligence is not just “red tape.” Ignoring it can have real-world consequences, including:
- Unexpected Cleanup Costs – Remediating contamination can be costly and delay projects indefinitely.
- Regulatory Penalties & Legal Liabilities – Florida and federal agencies can impose penalties for environmental violations.
- Property Devaluation – Undiscovered contamination can render land difficult to develop or significantly lower its market value.
- Lawsuits from Affected Parties – If contamination affects neighboring properties or groundwater, lawsuits can be costly and reputation-damaging.
Land Use & Zoning Considerations
Environmental due diligence doesn’t just uncover contamination—it also determines how land can be used. Florida zoning laws and environmental regulations often intersect, affecting development potential. Common zoning issues related to environmental concerns include:
- Flood Zones & Coastal Regulations – Properties in coastal or flood-prone areas may face development restrictions.
- Setback Requirements – Certain areas require buffers between developments and protected wetlands.
- Industrial vs. Residential Use Conflicts – Some properties may be zoned for specific uses that limit redevelopment options.
Just as environmental risks vary from property to property, so do zoning and land use constraints. A property in an industrial zone may need contamination screening, while land in a protected watershed might face development restrictions due to conservation laws. Understanding these distinctions is critical in assessing feasibility before purchase. Engaging with legal professionals familiar with Florida land use and zoning laws, like Cobb Cole’s Land Use and Zoning attorneys, is essential for navigating these challenges.
How Cobb Cole Can Help
Environmental due diligence is complex, requiring knowledge of federal and Florida-specific requirements. Partner Michael Sznapstajler and the Cobb Cole Environmental Law team have a long track record of assisting clients with:
- Environmental assessments and compliance reviews
- Brownfield redevelopment strategies
- Permit acquisition and regulatory negotiations
- Land use planning and zoning evaluations
Whether you’re acquiring property, developing land, or managing environmental liabilities, proper due diligence can protect your investment and ensure compliance.
