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  • Writer's pictureNathan Hammer

Phase I Environmental Site Assessments

What is a Phase I ESA?

A Phase I Environmental Site Assessment (ESA) is a process that identifies potential or known environmental hazards on a property. It is typically conducted as part of the due diligence process for a real estate transaction, such as a purchase, sale, or refinance.


The Phase I ESA process involves a review of historical and regulatory records, a site visit, and interviews with current and former owners and occupants. The assessor will look for evidence of past or present uses that could have resulted in contamination, such as underground storage tanks, hazardous waste disposal, or industrial activity.


What types of properties is a Phase I ESA needed for?

A Phase I ESA may be needed for any type of property, but it is most common for commercial and industrial properties. This is because these types of properties are more likely to have been used for activities that could have resulted in contamination.


However, a Phase I ESA may also be needed for residential properties, especially if they are located in areas with a history of environmental problems. For example, a Phase I ESA may be required for a residential property that is located near a former industrial site or a landfill.


When is a Phase I ESA needed?

A Phase I ESA is typically needed in the following situations:

  • Purchase of a property: Most lenders will require a Phase I ESA to be completed before they will approve a loan for a commercial or industrial property.

  • Sale of a property: Sellers of commercial and industrial properties may choose to have a Phase I ESA completed in order to make the property more attractive to buyers and to avoid any potential liability for environmental contamination.

  • Refinance of a property: Lenders may require a Phase I ESA to be completed before they will approve a refinance for a commercial or industrial property.

  • Change in ownership: A Phase I ESA may be required if there is a change in ownership of a commercial or industrial property, even if the property is not being sold or refinanced.

  • Redevelopment of a property: A Phase I ESA may be required before a commercial or industrial property is redeveloped.


ASTM standard

The American Society for Testing and Materials (ASTM) has developed a standard for Phase I ESAs, known as ASTM E1527. The ASTM E1527 standard provides guidance on the scope of work, methodology, and reporting requirements for Phase I ESAs.


What now?

A Phase I ESA is an important tool for identifying potential environmental hazards on a property. It is typically required for commercial and industrial real estate transactions, but it may also be needed for residential properties in certain situations.


If you are considering purchasing, selling, or redeveloping a property, it is important to consult with an environmental consultant to determine if a Phase I ESA is needed.


Copyright Premier Safety Resources 2023


Disclaimer: This blog post is for informational purposes only and is not intended to be legal advice. If you have any questions about whether or not you need a Phase I ESA, please consult with an attorney or environmental consultant.


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