Phase I Environmental Site Assessments
Environmental Site Assessments (ESAs) are a critical tool for corporate managers, investors, borrowers, and lenders to meet legal, financial and ethical needs for due diligence research on properties before purchase, sale, development, refinancing, or foreclosure. Potential litigation over damage to natural resources or human health and the cost of remedial action are important considerations in every property transaction. ESAs evaluate existing environmental problems stemming from past operations and potential environmental problems from current or proposed operations at a site.
Most Environmental Site Assessments are limited to Phase I ESAs, which include:
- An inspection of the subject property
- A review of pertinent records for evidence of current and historical uses of the subject and adjacent properties
- Interviews with current owners and occupants, as well as local government officials
- Evaluation of information gathered and development of a report
- In some cases, samples of building materials are collected to determine if PCBs, asbestos or lead are present; if contamination is detected or suspected, additional sampling of soil or groundwater may be needed
Who Benefits From a Phase I Survey?
Phase I ESAs are often conducted on properties at the request of banks, insurance companies, real estate financing companies, industrial companies, law firms, and public or government agencies. Landowners want to ensure that any property they acquire is free of contamination, or that any detected contamination is identified and analyzed to determine the cost of remediation and factor it into the price of the property. Anyone considering the purchase of commercial property, or property that may have been used commercially in the past, should consider a Phase I ESA. Property owners seeking to sell often have a Phase I ESA completed prior to marketing the property so they can correct or disclose any problems that are found.