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Why You Need a Phase 1 Environmental Site Assessment

Most people always ask if they really require a Phase 1 ESA. Yes, they need it.  This is because it is only a phase 1 ESA along with other Environmental Protection Agency’s (EPA) standard that can protect you against CERCLA liability.

However, today, there exist various limited environmental assessments which are utilized in the industry as tools to aid the decision-making process when buying or lending on properties. These various assessments although limited in nature, are generally faster, and more cost-effective than a Phase 1 ESA. This is because most of these assessments are fragments of the Phase 1 ESA.

Furthermore, the commonly known Environmental Transaction Screen (ETS) has its own ASTM standard (E1526-08) is regarded as a mini Phase 1 ESA of sorts. This assessment entails a lot of same elements, i.e. database reviews, site reconnaissance and some limited historical review. However, other assessments combine with one or two of the Phase 1 ESA items to make the limited report. The cost of implementation ranges from $250 -$1400 depending on what is entailed with the visit portion of the site being the major influencer of the cost.

So, when you’re contemplating whether you need a Phase 1 or not, then you should take they few questions into consideration.

#1:Is CERCLA liability protection important to you? If it is, then only a Phase 1 will do.

#2:Property Type

  • If the property taken into consideration is industrial property or another high-risk type property, then a Phase 1 ESA is advisable.
  • If the property is an office building, apartment or other low-risk property then a limited environmental due diligence would suffice.
  • If the property is a vacant space of land that is yet to be developed, a limited environmental due intelligence is recommended.

#3:Property location (note that not only is your property to be considered during the assessment but also the surrounding properties as well as how they may or not have an effect on your property.)

  • If your property is in a highly developed area or urban area which has existed for a long period of time, it’s best to get a Phase 1 ESA.
  • If the property is in a mostly underdeveloped area or rural area, limited environmental assessment should be considered.

#4:Also, what are the requirements of your lender? This is by far the most important of all questions. Different lenders have their own scopes of work that they need and this is dependent on the loan type.

In conclusion, by now you know why you need a Phase 1 ESA. The test environnemental Group Ortam offer various environmental assessments including the Phase 1 ESA.

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