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Phase I Environmental Site Assessments

Environmental site assessments have become an essential part of today's commercial and residential real estate transactions. The Comprehensive Environmental Response Compensation and Liabilities Act of 1980 (CERCLA) as amended in 1986 identified property owners as liable parties for cleanup associated with environmental contamination. In addition, the U.S. Environmental Protection Agency (EPA) may assess costs associated with cleanup to past owners or anyone involved with the contamination of the property. Other applicable environmental laws also contain provisions to hold leasers and landowners responsible for contamination that existed at the time of purchase/lease.

The American Society of Testing and Materials (ASTM) developed standards for performing due diligence ESAs and for a preliminary screening method called the Transaction Screen Process. Included in the ASTM standard are the "Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process," E 1527-94, and the "Standard Practice for Environmental Site Assessments: Transaction Screen Process," E 1528-93. Both standards satisfy the appropriate inquiry, or "due diligence," requirement necessary to qualify for the CERCLA innocent landowner defense.

Phase I ESAs are normally performed for commercial properties, residential developments, agricultural properties and industrial properties , and are usually required by banks for real estate purchase loan or refinancing. A Phase I Environmental Site Assessment is also an important action a purchaser can take to learn about the property's past use, the environmental conditions at the site and adjoining sites, and the likely presence of hazardous substances. Armed with this knowledge, the prospective purchaser can:

  • 1) Better asses the financial risk posed by potential environmental contaminations;
  • 2) Take steps to avoid full or partial liability for cleaning up the property;
  • 3) Demand that the current landowner clean up the property prior to the sale; or
  • 4) Have the cost of the property reduced commensurate with the cost of the cleanup.

The goal of ENVIROCON's Phase I ESAs is to assess the environmental conditions of commercial real estate and identify Recognizable Environmental Conditions (RECs) associated with the subject property. Recognized environmental conditions are defined in the Standard as "the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, groundwater, or surface water of the property." To assure this, ENVIROCON regularly includes the following in a Phase I Site Assessment:


  • Visual site inspection and walk-through
  • Investigation of impact from adjacent properties
  • Review of records associated with property
  • Review of files of environmental regulatory agencies
  • Inventory of above ground and underground storage tanks
  • Conducting local interviews and investigations
  • Investigation of present and past ownership and use
  • Inspection of historical aerial photographs
  • Inspection for evidence of hazardous materials
  • Inspection for evidence of PBC contamination
  • Review of historical records associated with the property

Based on the information gathered during the Phase I assessment, ENVIROCON will prepare a report in accordance with the ASTM E 1527-00 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. Our reports will summarize the findings and provide professional opinions regarding any recognized environmental conditions and the potential for an environmental problem to be present at the site in order for our clients to make appropriate decisions prior to property transactions.

ENVIROCON's other services such as asbestos surveys, mold surveys and/or lead-based paint surveys can be done in association with a Phase I Environmental Site Assessment report as the client's request. Asbestos, mold and lead-based paint are not part of the ASTM standard, but occasionally the client will want to address these issues before purchasing or selling a property.




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