Phase I and II environmental site assessments

Phase I and II environmental site assessments.

An environmental site assessment (ESA) is a report prepared for a real estate property that identifies existing or potential contamination liabilities. By identifying the risks, it is easier to assess the cleanup costs if the property were to be considered for redevelopment or a change of land use. The study addresses underlying land and physical improvements to the property. Contaminated sites are listed as “brownfield sites.” A buyer, lessor, or lender can be held responsible for removal of hazardous substance residues, even if a prior owner caused that contamination.

Severe cases are added to the National Priorities List (NPL). The NPL is subject to the EPA’s superfund program. Geologists, engineers, or scientists with knowledge of soil science, groundwater hydrology, and regulatory conditions should perform ESAs. Architects or professional engineers can inspect building materials. There are many home and building inspectors who claim to provide expert assessments but lack the necessary educational background to do so.

The phase one ESA is the first step in the environmental investigation. If the site is considered contaminated after phase I is completed, a phase II site assessment is usually conducted in which samples of soil, air, groundwater, or building materials are taken. Phase I and II assessments are used to assess the risks of ownership of commercial properties which may have been exposed to toxic chemicals in the past involving chemical analysis for hazardous substances.

A Phase II Environmental Site Assessment is an “intrusive” investigation. Samples of soil, groundwater, and building materials are tested for contaminants. The most frequent substances tested for are petroleum hydrocarbons, pesticides, solvents, asbestos, mold, and heavy metals.

ESAs are performed when:

  • Persons or entities not previously on title purchase properties.
  • New lenders on the property consider loans.
  • Ownership is principally redistributed or bought out.
  • Property owners apply to a public agency for change of use. (Excluding a discretionary land use permit).
  • The current property owner wants to understand the toxic history of his or her property
  • A regulatory suspects toxic conditions on a site.
  • Divestiture of properties.

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