If you’re involved in (or planning to be involved in) a real estate transaction, the deal could be delayed due to existing (or potential) environmental issues that a Phase I Environmental Site Assessment (ESA) Overview may help identify. Conducting a thorough environmental due diligence assessment is critical in limiting your environmental liability under CERCLA. Without one, you could be held liable for any previous environmental issues (and cleanup costs) at the site. Not conducting a Phase I may inhibit your ability to get financing or come back to haunt you years later when an environmental issue is discovered on your site.
Liability Protection
Sometimes, the recs (recognized environmental conditions) are pretty obvious: petroleum product discharge, floor drains, pcbs, vocs, vapor intrusion, etc. Other times they require a diligent review of publicly available files like historic sanborn / fire insurance maps, doh, local/county/state/federal records, old phone directories, surveys, engineering plans, interviews of previous site owners, etc.
Phase I’s, as they are commonly called, help landowners receive liability protection should contamination occur in accordance with the Comprehensive Environmental Response, Compensation, & Liability Act (CERCLA, aka the Superfund Act). If the evaluation is not performed, you could lose your right to defend yourself against future environmental liabilities. Most lenders require a Phase I to limit their environmental Liability exposure.
A Phase I ESA adhering to the American Society for Testing and Materials (ASTM) E1527-13 “Standard Practice for Environmental Site Assessments: Phase I ESA Process” meets the Environmental Protection Agency’s (EPA) standard for “All Appropriate Inquiries”. The “Rules” are always changing/being updated. So make sure you team up with an attorney who knows how to navigate environmental liability protection.
Additional Information Needed Before We Can Start
Noticing the covers to monitoring wells is a good field observation when conducting a phase i esa. Monitoring wells are often installed to check on groundwater contamination. They almost always entail digging for more information as to the contaminant in question. A phase 2 investigation recommendation often results to confirm what is going on underground. This particular site had over 15 monitoring wells that were observed.
Before the Phase I process starts, we need the information listed below:
- Client (& Bank) name and contact information Phase I made out to.
- Bank’s enviro due diligence requirements (If financing).
- Copy of the Property Survey or Site Plan (The older one is acceptable).
- Complete contact Information of current owner (include e-mail & phone)
- Complete contact information for all tenants (If rental).
- Complete Title Binder (Deed if the binder is not available).
- Copies of historic Phase I’s or other Enviro / Eng Studies, Investigations done.
- Information regarding utilities that service the property (sewer or septic, electric (underground or above ground) oil (AST/UST) or natural gas, public water/well (or both).
Additional Fees (That May Be Incurred)
Occasionally there are additional fees that we will let you know of if needed like:
- In-person “File Reviews” of Agency files (T&M)
- Printed copies of Report & Research Databases (All reports are sent digitally)
- Postage, Tolls, Mileage, etc. (As outlined in proposal T&C)
- Language changes to the report after issued (T&M)
- Out of Scope items for lenders like the Bank (ie: Visual Assessment for Asbestos / Lead Paint / Mold / Hydrology / Radon / etc.)
- Any enviro testing is not part of a Phase I ESA (Quoted separately)
- RUSH services to expedite (Add $1,500 to expedite within 10 business days)
Turn-Around-Time (TAT) & Pricing (Typical)
We require three (3) weeks (15 business days beyond weekends and Holidays) to complete Phase I which costs from $1,800 – $3,800 for smaller non-industrial sites to large tracts that often require a specialized proposal. The clock starts One (1) business day after receipt of the executed contract, deposit & requested additional information. Additional fees are often needed for RUSH projects, in-person file reviews, etc.
