What is a Phase I environmental site assessment?
A Phase I environmental site assessment (ESA) is a report prepared for real estate holdings. It identifies potential or existing environmental contamination liabilities. Additionally, the purpose of a Phase I ESA is to avoid legal liability for pre-existing contamination.
Peace Environmental constructs reports that meet and, in many cases, exceed the requirements listed in ASTM E1527-13.
Under CERCLA, landowners are liable for any pre-existing contamination, even if they are not the cause of it.
A Phase I ESA is generally considered to be the first step in the process of environmental due diligence. The results of a Phase I ESA determine if sampling and additional investigation are necessary.
Frequently Asked Questions:
What kind of information is in a Phase I ESA?
The basic components of a Phase I ESA include:
- A visual site inspection
- Interviews with anyone who may have relevant information about the site
- A review of property records, which typically includes:
- Chain of title review
- Examination of surrounding land use
- Review of any existing aerial photography records
- A search of agency records
- Completion of a comprehensive report
Do I have to get a Phase I ESA before purchasing commercial or industrial property?
You may have to get a report if you are purchasing the property with a loan from a bank or the Small Business Administration (SBA).
In order to protect credit risk and the loan value, the lender may require a Phase I ESA before approving the loan.
How long is a Phase I ESA considered valid?
A Phase I ESA much be updated to qualify for protection if it was completed more than 180 days before closing.
However, after one year a report is no longer considered valid for protection qualification.
If I get a Phase I ESA, do I also have to get a Phase II ESA?
No. The results of a Phase I ESA may not warrant recommendation for a Phase II ESA.
How much does a Phase I ESA cost?
The cost of the report varies. The final price is dependent on several variables, including:
- Property size
- Number of areas that are potentially contaminated
- Type of contamination risk
Are there any environmental risks not assessed in a Phase I ESA?
Several environmental risks are not part of a standard Phase I report:
- Regulatory compliance
- Lead-based paint
- Health and safety
- And many other risks
What's the turnaround time for a Phase I ESA?
The average turnaround time for a Phase I report is 2-4 weeks.
What can I do with the results of a Phase I ESA?
Commercial property buyers can insist upon clean-up by the existing property owner if evidence of contamination is revealed.
They can also ask for a price reduction to account for cost estimates of remediation.