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Fun Fact Friday: Environmental Site Assessments

By August 30, 2019No Comments3 min read

Phase I and Phase II Environmental Site Assessments (ESAs) are procedures which have been developed by the American Society for Testing and Materials (ASTM) to evaluate environmental issues at a real estate site. These assessments are usually performed when land is changing ownership or usage, but are also occasionally performed for an existing property owner who wants to know the toxic history of the property, or if a regulatory agency suspects toxic conditions on the site.

Environmental Site Assessments are usually performed as part of due diligence requirements. These requirements are regular parts of corporate law. Additionally, these assessments help protect potential property owners. The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) holds land owners, lessors, and lenders to be responsible for resolving environmental issues, even if the hazards were the result of activities from a previous property owner. This makes an ESA critical in ensuring that a potential new property does not provide an unexpected risk of liability for decontamination.

A Phase I ESA is a quick, simple, noninvasive report used for the identification of potential or existing environmental contamination liabilities for real estate properties. This assessment is completed by reviewing records, completing a surface-level site inspection, and interviewing owners, occupants, neighbors, and local government officials. The goal of a Phase I ESA is to determine the likelihood that any Recognized Environmental Concerns (RECs) are present, which may then be further investigated through a Phase II ESA. The RECs could be contamination from activities which took place on site or contamination from adjacent properties. Essentially, the Phase I ESA is intended to determine the history of the property and ensure that there are no obvious concerns.

The Phase II ESA is a more invasive assessment which requires collection and testing of soil, groundwater samples, and/or building materials. While the Phase I ESA is more purposed to determine presence or absence of environmental concerns, the purpose of a Phase II ESA is to determine the scale and details of the discrepancies found by the Phase I investigation. This phase of investigation can take a significant amount of time to allow for sampling and testing, as well as any monitoring activities deemed necessary by the Phase I results.

While a Phase II investigation is not always required, performing a Phase II ESA is a good practice, especially for those considering purchasing real estate. Without a Phase II ESA, it is possible that environmental hazards on the property could go unnoticed, and the cost of dealing with removing those hazards often greatly outweighs the cost of the Phase II ESA. This makes the examination extremely helpful in allowing potential real estate buyers to fully understand the liabilities of the property before they make their purchasing decision.

Environmental Site Assessments are unique in their ability to allow property owners and buyers to make more knowledgeable decisions. These activities can prevent massive liabilities for buyers and allow property owners to catch potential problems before they cause massive damage or become harder to resolve.

Encorus Group provides a variety of environmental services, including Phase I and Phase II ESAs. If you need Environmental Site Assessment services, contact Encorus’s Geologist, Andrew Kucserik, at 716.592.3980 ext. 149. or