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#1157665 - 04/03/09 08:07 PM Cercla
~MunQue~ Offline
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~MunQue~
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Are we required to do an environmental assesment on residential construction done by a contractor?
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Lending Compliance
#1157708 - 04/03/09 08:24 PM Re: Cercla ~MunQue~
rlcarey Offline
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rlcarey
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Galveston, TX
Let's see, contractor is building on Love Canal.

I would say yes!!!!!!!!!
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#1157730 - 04/03/09 08:37 PM Re: Cercla rlcarey
~MunQue~ Offline
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~MunQue~
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I have an officer that insists that the little blurb on the appraisal that says there are no adverse environmental conditions will suffice, your thoughts??
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#1157801 - 04/03/09 09:30 PM Re: Cercla ~MunQue~
rlcarey Offline
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Galveston, TX
When the bank becomes subject to a superfund clean-up, I don't know that you will qualify for the innocent bystander rule by solely relying on that appraiser statement as your due diligence. However, this may be based on some overall environmental risk assessment already performed by your bank. This argument should be a moot point anyway as the bank has long required to have policies in place. For example, this has been the FDIC policy since 1993:

Policies. When appropriate, loan policies, manuals and written procedures should address environmental issues pertinent to the institution's specific lending activities. For example, the lending manual might identify the types of environmental risks associated with industries and real estate in the institution's trade area, provide guidelines for conducting an analysis of potential environmental liability and describe procedures for the resolution of potential environmental concerns. Procedures for the resolution of environmental concerns might also be developed for credit monitoring, loan workout situations and foreclosures.
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#1157915 - 04/04/09 11:58 AM Re: Cercla ~MunQue~
Richard Insley Offline
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Toano, VA
It's been a very long time since I looked at the green laws, but my gut reaction is that there's some kind of exemption for residential property. Tract development and other commercial loans would certainly be covered, but you might want to look into coverage of loans for construction or purchase of individual residences.
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