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Successful toxic-waste management.

The dramatic expansion in property owner responsibility and liability for toxic-waste problems has spurred owners to action, particularly in the commercial and industrial markets. Previously, owners were only liable for negligent acts and ultra-hazardous activities occurring on their properties. Rarely could liability be proved, particularly when contaminants were transmitted through ground water.

Today owners are liable for all on-site toxic conditions regardless of their actions or omissions. To survive economically, property owners must design and manage their commercial and industrial properties to avoid, or at least minimize, these liabilities.

Property design

Most problems relating to toxic materials storage revolve around three types of site improvements: underground tanks, sumps, and clarifiers. These are problem spots because each accommodates lengthy storage of potentially dangerous liquids and chemicals in an underground environment, away from immediate observation. However, basic changes to industrial property design can minimize the risk of toxic material leakage easily and cost effectively.

Underground storage risks undetected leakage of materials into the ground with soil and ground water contamination as a result. Some chemicals are held in the soil with minimal potential migration; others move quickly through the soil and through pathways, such as old agricultural wells found on many properties now in industrial use. Such pathways give leaking chemicals access to deep water zones, resulting in expensive, and sometimes impossible, remediation. To avoid this risk, property owners are designing and redesigning their commercial and industrial properties to store these materials above ground. This allows for better monitoring and leak detection and avoids degradation of the tanks from below-ground conditions. All tanks, even fiberglass tanks and the associated piping, are subject to deterioration from damp ground.

By using above-ground tank storage, the owner must now confront surface safety issues. Such issues include damage to surface storage tanks from vehicles or vandals. These hazards can be controlled through site design and greater site security. Site design includes placement of tanks in remote, on-site locations surrounded by protective barriers.

The cost of these design features is minimal compared to the remediation costs associated with environmental damage from tank leaks. Design costs include more effective security around the above-ground storage locations and more elaborate pumping to move materials into above-ground tanks, as well as landscaping costs to mask the storage site. Despite these additional costs, most owners, developers, and tenants realize that it is in their best interest to avoid even more costly toxic material problems attendant to underground tank storage.

Industrial property owners are also designing and redesigning sump, tank, and clarifier installations within underground containment vaults, where local ordinances or fire codes prohibit above-ground installation. Although ready observation of leakage is more difficult than for above-ground locations, vaults can be inspected far more easily and with greater certainty than the traditional in-ground installations. Further, properly designed vaults can contain leaking contaminants without release into soil or ground water. Of course, vault construction presents an additional cost. However, tenants are beginning to favor this approach because they, like owners, bear liability for environmental contamination, regardless of actions or omissions.

Pro-active property management While locating the storage of toxic materials above ground or in containment vaults will reduce the risk of leakage, active and skilled property management remains even more important in maximizing the value of the property and reducing exposure to environmental liability.

Today's property managers must be knowledgeable not only about traditional matters such as building design, property maintenance, and utilities, but also about chemical processes used by tenants and how these processes may affect the building, pipes, walls, and roofs.

Given these new responsibilities, the property manager's first job will be to assemble a team of professionals to advise on and respond to environmental issues. This team usually includes an environmental consulting firm or environmental engineering firm, architects, and legal counsel.

The environmental consulting firm should be knowledgeable about toxic materials and industrial processes, especially those most common in that market. In industrial markets with intense chemical use and high-volume manufacturing, which may involve electroplating, metal etching, and electronic component printing, an environmental engineering firm may be needed instead of, or in addition to, an environmental consultant. Often, an environmental engineer can provide expertise in industrial production design, chemical handling, and waste storage. The architects can advise on other design and aesthetic issues. Legal support skilled in environmental liability issues can advise on environmental regulation, materials handling and transport, and spill response.

This active approach to property management requires the manager to be highly involved in tenant selection and in evaluation of tenant compatibility with the building systems. For example, in addition to material storage risks, tenant operations may pose the risk of contaminating the building itself. Metal dust particles, a by-product of some industrial processes, can adhere to and contaminate building surfaces. Fumes can also permeate wall and ceiling surfaces, deteriorating the integrity of the material.

Tenant analysis

The best defense for the property manager is to become knowledgeable about all tenants and to inspect tenant space and storage tanks regularly, whether installed above or below ground. The lease documentation should clearly state the obligations of the tenant with respect to storage, use, handling, and disposal of chemicals and waste.

Lease documentation should include an inspection plan, establish tenant responsibility for spill or leakage notification, and permit (but not obligate) the owner to monitor tenant compliance through the sampling of building surfaces in tenant areas.

Some questions the property manager should ask of prospective tenants are:

* What is the tenant's business and what is the expected site use?

* I Given the expected site usage, what chemicals are involved?

* What kind and length of chemical storage will be necessary?

* Can the chemicals, whether or not properly handled, adversely affect the building's sewer system and other building systems?

* How does the tenant self-monitor the risks associated with this use?

* What is the tenant's record of spills and chemical releases?

Once the property manager has analyzed the answers, an inspection plan should be developed for the tenant at this site. The plan should include the protocol for the inspections and frequency of inspections.


Environmental inspections are not merely site visits, but, instead, inspections by the property manager assisted by an environmental consultant or engineer to identify evidence of contamination or of chemical mishandling or misstorage.

Tenants involved in active industrial uses should be considered for inspection as frequently as once a month. More passive tenant uses, such as fabrication or assembly, may need to be inspected only once a year. Once a year, however, should be the minimum interval for an environmental inspection of any tenant.

The tenant should always be involved in these inspections. The property manager needs the cooperation and assistance of the tenant or the tenant's on-site manager during the inspection to answer questions about the site use and tenant systems and to note problem areas or potential problem areas for follow-up inspection and clean up.

Some details the property manager should review during these inspections include:

* Have there been any changes in the tenant's industrial process or chemical or waste storage since the last inspection or move-in?

* Have there been any changes in the disposal or storage of chemicals?

* Were there any spills, and, if so, how quickly were they detected, contained, and cleaned?

Common indicators of problems are walls that show moisture lines or deterioration, drains that show high use and heavy staining, and surface deterioration or etching. To document use and condition of the space, photographs are now being widely used.

In planning for inspections, the property manager must convey to tenants that they share environmental liability with the owner for any hazards and damage. Cooperation between owner and tenant in inspecting the site will improve the quality of the inspections and greatly minimize the potential for liability for both parties.

Tenants who realize the extent of their liability and want to ensure the integrity of storage tanks and carefully manage their environmental liability exposure often install their own tanks and remove them at move-out. In doing so, tenants find that they better control the environmental risks associated with tank usage. They can also better identify and document environmental conditions present at move-in or move-out which are unrelated to their occupancy.

The next element is the move-out inspection. This inspection must be comprehensive as its purpose is to identify any tenant-caused environmental condition and to provide the environmental base line for the next tenant. The move-out inspection should occur between three and four months prior to the end of the lease. Frequently, not enough time is allowed to inspect the space, collaborate with the tenant on items to be fixed, and than re-inspect to ensure all items were addressed before the expiration of the lease.

For tenants with more passive industrial uses, the time frame may be reduced to a month or two prior to moveout. Here, too, the property manager should involve the tenant in the inspection and should use the skills of an environmental consultant or engineer.

Spill-response plan

In addition to having in-depth knowledge of the tenant's use of the property and preparing and implementing an inspection plan, the property manager also needs to verify that the tenant has developed a spill-response plan. The purpose of the spill-response plan is to protect people and property should a spill occur and to minimize the extent of contamination through quick response.

It is the tenant's responsibility to develop and implement this plan, but property managers, with their extensive knowledge of the site, can make valuable contributions. Again, the lease documentation should clearly spell out the legal obligation of the tennant to notify the property manager promptly of any spill or leak affecting the building condition or the site environment.

The tenant-inspection program can often provide the vehicle for the coordinated, cooperative development of a spill-response plan. The plan will have as its primary components: immediate response to protect people; initial containment of the leak or spill; notification of public authorities, insurers, and other tenants and neighbors; and longer term remediation and building repair.

The usual difficulty in spill response is managing the situation in the midst of confusion caused by such events. However, the knowledge of on-site tenant officials and property managers of the spill-response-plan components will reduce confusion and speed effective response.

The particulars of the plan will vary with the volume, type, and location of chemicals used, as well as with the building design. Understanding where and how to evacuate people, the need and use of protective equipment and gear, and the availability of immediate containment vessels are only a few of the aspects to be detailed in the plan. (See the chart for key components of a spill-response plan.)


The risks and liability related to toxic materials can in fact, be managed and largely minimized. Owners can design industrial properties to significantly reduce problems by installing storage tanks, sumps, and clarifiers above ground or in containment vaults. More visible or easily accessible storage locations can effectively reduce the risk of spills and leaks.

Pro-active property management will greatly diminish the risk of contamination. Today's property managers need increased training in building design and chemical processes. They will also need to assemble and manage a team of experts to support them in the identification and management of toxic material issues.

Finally, systematic, intelligent, and informed inspections are the best line of defense for the property owner. The majority of toxic-material problems can be avoided, if detected early and addressed with effective methods.


* Present in paints before 1978, and pipe solder until 1987.

* The current tap water lead standard is 25 parts per billion.

* Removal of paint, especially on any surfaces accessible to children, or covering over painted surfaces with permanent barriers is needed. Painting over lead paint is not sufficient.


* Present in electrical transformers sold before 1978; non-PCB transformers may also have been contaminated through sloppy PCB testing and servicing practices.

* Transformers containing PCBs must be registered with the local fire department and labeled as containing PCBs.

* Removal of PCB-containing transformers, draining of fluid, and reclassifying the units as PCB-contaminated," or equipping transformers with electrical protection devices must generally be completed by October 1, 1990, if the transformer is located within 30 feet of a commercial building.

* If any spill occurs in a contaminated transformer, all cleanup and notification documentation must be completed within 48 hours. Larger spills must be reported to the EPA and to the National Response Center in Washington, D.C. within 24 hours.


* Regulations apply to all tanks installed through 1988, with the exception of tanks used by farms and homes to store motor oil for non-commercial purposes.

* Tanks in place before 1970 must be tested and have leak-detection devices in place by the end of 1990.

* All tanks must be tested for leaks and have lead-detection equipment installed by 1993, and be tested periodically thereafter (depending on type of testing used).

* All existing tanks must be protected from corrosion or removed by 1999.

* If a suspected leak occurs, state and various local agencies must be properly notified, and the EPA must be notified within 24 hours.


Regulations are being developed to prescribe standards and rules comparable to those for underground tanks.


* Regulations apply to all buildings, although older buildings (pre-1979) are the most likely to be affected. Depending on the age of the building, asbestos may be located in sprayed fireproofing, insulating tape, floor tile, mastic, or a variety of other products.

* Except for school and government buildings, asbestos removal is not required.

* The EPA must be notified before renovation or demolition begins in a building containing asbestos.

* Even during renovation or demolition, it is not always necessary to remove the asbestos, if asbestos-containing materials are encased in concrete or other inert substances of if materials are properly wetted down for removal.

* Under OSHA regulations, employers whose workers are exposed to asbestos-containing materials while doing repair or renovation must monitor the air quality in buildings to ensure that asbestos concentrations do not exceed levels of 0.2 fibers per cubic centimeter of air in an eight-hour period. (OSHA is currently considering a change in the acceptable level of asbestos to .1.)

* Buildings that undergo asbestos abatement procedures must comply with the notification requirements under the National Emissions Standards for Hazardous Air Pollutants, administered by the EPA.



The items below are only some of the important elements in a spill-response plan. Some of the components will vary depending upon the particular circumstances of the location and chemical use.

* Post and communicate an emergency contact list. This list should include building emergency staff, fire department, hospital, ambulance police, and emergency chemical remediation contractors.

* Confine the emergency. Shut off chemical sources or fuels, and close doors and windows.

* Evacuate the affected area. Sound the alarm system, and follow evacuation procedures. Everyone should assemble at a designated meeting point and identify any missing personnel.

* Summon aid. Contact emergency personnel and agencies on the emergency contact list. Give the location and type of emergency to each contact.

* Obtain and apply emergency first aid and treatment.

* Notify other appropriate groups. These include local, state, and national environmental agencies, neighbors (where necessary), and insurers.

Underlying any plan is the commitment to maintain an updated spill-response plan. Periodic review of the plan is needed. This requires that a designated individual have responsibility for updating the plan and for offering familiarization training for its use.
COPYRIGHT 1990 National Association of Realtors
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes related articles
Author:Twining, Peter
Publication:Journal of Property Management
Date:Sep 1, 1990
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