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 Call Us: (800) 419-4923
 Call Us: +44 (0)20 3865 7701
 Call Us: (787) 822-8377
 Call Us: (437) 855-4925
Partner Engineering and Science, Inc.
Partner Engineering and Science, Inc.
You are here: Home » Resources » Articles » What to Do When Storm Damage Occurs During Escrow

October 2, 2017

What to Do When Storm Damage Occurs During Escrow

By Joseph Derhake, PE

IF A NATURAL DISASTER DAMAGES YOUR PROPERTY WHILE YOU ARE STILL IN ESCROW, YOU MUST RE-ADDRESS CRITICAL DUE DILIGENCE AND APPRAISAL CONCERNS BEFORE WEIGHING RISK TOLERANCE FOR CLOSING THE DEAL.

Let’s face it, there’s no good time for a storm or disaster event to occur. The devastating impact of recent Hurricanes Irma, Harvey, and Maria showcase the full-scale capacity of destruction that Mother Nature can incur. But if a natural disaster occurs while you are still in escrow, and before the deal has been closed with the lender, it presents some unique challenges, especially if the property has been heavily damaged, beyond cursory drive-by visual assessments.

If your third-party reports (Phase I Environmental Site AssessmentProperty Condition Assessment, and Appraisal) have been done, you need to re-inspect. When the value of the property has been compromised, it essentially presents a reboot on escrow and the due diligence process. It is in every stakeholder’s best interest to carefully reassess full damage, remediation cost, and time scale for restoring the property relative to the investor or buyer’s needs.

Because of many potential vectors of contamination, a prompt Phase I ESA is an important starting point.

Continue reading the GlobeSt blog here.

About the Authors

Joseph Derhake, PE

Joseph Derhake, PE

Chief Executive Officer
Joe Derhake, PE, serves as CEO of Partner Engineering and Science, a global environmental, engineering, and energy consulting firm. A registered Professional Engineer for over 25 years, Mr. Derhake has touched thousands of commercial real estate projects, from development and transactional due diligence to site remediation, asset optimization, ESG initiatives and more. His clientele includes many of the world’s largest lenders, real estate investors, and corporations. Mr. Derhake is a registered civil engineer in multiple states. He holds a bachelors degree in civil engineering from Michigan State University and Masters in Business Administration from University of Southern California.

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