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A Phase I ESA is a recommended minimum environmental investigation for any buyer/seller/lender of commercial or industrial property. A Phase I ESA is a comprehensive environmental investigation of a property. There are two parts of the site assessment. One, is the on-site survey of all improvements and all land surrounding the site. Attention is focused on potential hazardous materials that may have been handled in any manner around the site and can pose liability to an owner. The second aspect is the comprehensive record search for any information that may show evidence of handling hazardous materials on or in the vicinity of a site. The information available will vary from region to region. All relevant available records, maps, aerial photographs, directories and other sources for information are researched. In the United States there are several guidelines and standards to follow when performing Phase I ESA's. Some are published by financial institutions, banks, American Society for Testing of Materials (ASTM Standard Practice E 1527 and E 1528), Federal Deposit Insurance Corporation, Resolution Trust Corporation (RTC's Scope of work), and more. Each project has unique circumstances, and published standards cannot specify all activity necessary. Circumstances may be discovered during the investigation that may change a pre- set scope of work.


A major reason to conduct the Phase I ESA is to reduce liability and be made aware of potential environmental problems. Of major importance is also to show CERCLA the "innocent landowner defense", by making all appropriate inquiry as to the environmental status of a property. The U.S. EPA issued in 1989 a long awaited regulatory guidance on the innocent landowners defense, which mention "all appropriate inquiry should be done" to avoid liability, but neglect to provide a definition. A Phase I Environmental Site Assessment should be done to discover the obviousness of the presence or likely presence of a release or threatened release of hazardous substances due to current or past activity on or in the vicinity of the property. The report is a vital part when a decision maker assess the environmental concerns in deciding to buy/sell/finance or maintain a property.

A Phase I Environmental Site Assessment will be conducted following the clients specifications and, to the extent required in accordance with standard industry practice. Some clients specify the Phase I to follow published specifications, some are mentioned above. Most banks, lenders and investment firms require a Phase I ESA to avoid potential liability when making commercial loans or investments. Lender liability has been discussed in legal real estate circles since the U.S. Court case "Fleetwood". The "Fleetwood" case made a legal prejudice to make lenders co-responsible for contaminated properties. In essence, a lender could be made responsible to pay for cleanup of a site, even if they had no knowledge of the contamination and was not responsible for it.

The scope of services for an Environmental Site Assessment include the following tasks:

  1. An inspection of the site and all improvements is conducted with particular attention to any obvious use, storage or generation of hazardous materials in the structure or operating equipment.
  2. Permits and Material Safety Data Sheets (MSDS) are evaluated when available.
  3. Available records are reviewed in addition to a visual inspection for potential presence of Asbestos, Radon, Lead, PCB or other hazardous materials in or near the site.
  4. Analyze old aerial photographs of the site.
  5. A review the historical use and improvements made to the subject site, a title search and review of historic maps.
  6. A review of available Federal, State, and local governmental records that include building, planning, sewer, water, fire, oil and gas, environmental, geological records as pertain to subject site and neighboring property.
  7. An investigation of available records that in United States include the National Priority List, Comprehensive Environmental Response Compensation and Liability Information System list, Department of Health Service, Water Quality Control Board and other pertinent Boards or Agencies records and files.
  8. Interviews with current and/or past tenants and owners and/or neighbors. (Confidentiality can be maintained).
  9. Review pertinent and available documents and maps regarding local geological, topographical and hydrological conditions.
  10. Evaluate applicable special resource issues.
  11. Complete a written report summarizing the findings and compile all information found in the report. Available maps, records, reports, plans etc. to be attached as Appendix.
  12. Provide recommendations of further investigation or testing when needed, and recommendations as to potential environmental problems.
A limited Phase I ESA can be done for around $400.00. A full service Phase I ESA can cost between $1,500.00 to $8,000.00 depending on the size and the location of the property and what type of information need to researched.

For additional information on our Phase I ESA, please contact AQ Management & Control.




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