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 E1527-21.

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
  • Wetlands
  • Asbestos
  • Lead-based paint
  • Mold
  • 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. 

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