Hi all TGIF ! 

I am dealing with a Rental Commercial Property which is located next door by the Gas Station ( which is no longer in service but they have auto service business ongoing  ) My lenders required 21E Massachusetts Oil and Hazardous Material Release Prevention Act reports from the property. Sellers not willing to spend any money for those test....they did a phase I ESA and the reports says:- “ Identified several RECs, primarily associated with the property adjoining the subject property to the north including auto service operations, a waste oil UST with no confirmatory closure data, and gasoline dispensers/piping without proper closure documentation. To investigate these RECs, we propose to install two sub-slab soil gas probes to collect sub-slab soil gas samples which will be analyzed for VOCs and APH. The cost will be between $3500-$4500. “

Have anyone been through a issue like this ? Does this gives you any sign of red flags ?? Should I risk that expenses and do it on my own ?

What will be the best way to deal with sellers....all your suggestions are welcome and highly appreciated.

P.S any suggestions what kind of loan is best for commercial property?

Thank you 

Gelbu

@Gelbu Sherpa This can get messy and you need professional help with it.  You need an attorney with experience in dealing with contaminated property purchases.  These things can range from "no big deal" to a brownfield / Superfund designation, which can be financially devastating if you get yourself saddled with it.

In a discussion with Mass DEP, I was told that when a contaminated property is sold, the buyer assumes the responsibility for cleanups.  Though there is a window of time where you can back out and return that responsibility to the seller.

Ideally, I'd write your offer contingent on a satisfactory 21E.  Even more ideally, I'd not make the offer at all unless the seller pays for the inspection.

An alternative is to get the seller to reimburse you for the cost of the test, should it come up with contamination - especially if he's representing that there's no contamination.

Also, look into the 21J program.  That's a state fund that's designed to pay for cleanup.  I don't know much more about it than that, but it's worth looking into.

My recommendation is to proceed with caution.

@Gelbu Sherpa Maybe suggest to the Seller that you will pay for the test, but if you go through with the purchase, you get your money back in the form of a credit against the purchase price? It sounds like the Seller doesn't want to spend money (possibly because he doesn't know for sure you'll go through with the deal). That way you get your money back (if you go through with the deal), and the Seller doesn't come out of pocket for the expense.

That's a compromise suggestion that may or may not work in your situation.

Thank you for your valuable response&time.