Phase I Environmental Site Assessment

First and foremost, you should perform a Phase I Environmental Site Assessment (ESA) on any property you are looking to purchase to protect yourself from liability.  The site assessment will give you peace of mind and help you avoid making a purchase you regret.  There are always risks involved in buying a property.  Protect yourself by doing your due diligence.

A property may appear to have no history of environmental contamination.  There are many factors that could contribute to future remediation costs and liability that was not planned.  Never Assume….Assess.

Purpose to conduct Phase I ESA

The purpose of the Phase I ESA is to gather information on the property and assess the environmental condition.  This helps to determine the likelihood of identifying recognized environmental conditions (RECs).  A REC may be a condition from a previous use; a dry-cleaning operation, a gas station, a factory, etc.  A REC could also come from a nearby off-site condition and cause contamination or a vapor intrusion condition.  Even sites that have never been constructed on before have a potential for environmental conditions.  For example, previous farming operations and the use of arsenic based pesticides could be hazardous.

A Phase I ESA sifts through many layers of time to determine if a potential for contamination exists.  The layers include current conditions on the property and historical conditions on the property. The current conditions are assessed through interviews with the property owner, as well as a site visit.  During the site visit, interviews are conducted with the property owner and any tenants.  These interviews help determine what chemicals are being used, where they are stored, and how they are disposed of.  The site visit also includes a review of conditions at the property to see if there are any ‘red flags’ such as underground or above ground tanks.  We look for any items that have potential for leaks.  We also look for any drains that could be used to dispose of chemicals, and any machines or tools that use chemicals which may not be in good working order.

Historical Uses

The second part of a Phase I Environmental Site Assessment looks at the historical uses of the property to determine if there are any RECs.  Sources such as aerial photos, Sanborn fire insurance maps, and city directories are very helpful.  These items can be purchased from a database vendor and are generally quite complete.

The conclusion of the report will identify no further action required or identify any RECs at the property and recommend further action.  Typically a Phase II ESA involves drilling samples in the ground to test the soil and/or groundwater for contamination.

Without getting heavy into the legal connotations of performing a Phase I ESA, it also completes legal obligations for All Appropriate Inquiry (AAI) to uphold innocent landowner defenses.  AAI is defined by the EPA through Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) as the process of conducting inquiry “into the previous ownership and uses of the property consistent with good commercial or customary practice…that will qualify a party to a commercial real estate transaction for one of the threshold criteria for satisfying the landowner liability protections to CERCLA liability.”

Protect Yourself

Buying real estate can be a very risky venture.  The potential for assuming liability from someone else’s past actions is real.  Let NAC’s team of due diligence professionals help you understand how to limit risk with your next real estate project. Contact us today for your consultation for your environmental or property condition assessment needs.