What is a Phase 1 environmental inspection?
In the United States, a Phase I Environmental Site Assessment (ESA), or Phase I ESA, is a report. This report is prepared for a real estate holding that identifies potential or existing environmental contamination. The analysis addresses both the underlying land as well as physical improvements to the property. The sampling of soil, air, groundwater, and building materials is uncommon during a Phase I ESA.
The Phase I ESA is the first step in the process. Standards for performing a Phase I site assessments are determined by the US EPA and are based on ASTM in Standard E1527-13.
(If a site is determined to be contaminated, a Phase II environmental site assessment may be required.)
What is the purpose of a Phase 1 environmental site assessment?
A Phase I Environmental Site Assessment (ESA) is performed to calculate the uses of a property, pending a commercial real estate transaction. The ESA will assess if current or previous property usage has pollution or is harmful to the environment and human health. If these issues occur, it could present potential liability for the lender or owner, as well as affect the property value. If a Phase I ESA is completed before a real estate transaction is finalized, the report can be used to complete the requirements of CERCLA’s (Comprehensive Environmental Response, Compensation and Liability Act) innocent landowner defense under All Appropriate Inquiries (AAI).
Phase I Environmental Site Assessment reports can be conducted on all types of properties. All Phase I ESA reports will comply with ASTM E1527-13. (Exceptions have been made for properties comprised of large primarily undeveloped land. These exceptions can be researched under ASTM E2247-16).
A Phase I environmental site assessment (ESA) checklist typically includes:
- Visiting the location to determine conditions and uses of the property and adjacent properties;
- Reviewing all federal, state, and local regulatory databases including, but not limited to, underground storage tanks (USTs), aboveground storage tanks (ASTs),
as well as release cases;
- Reviewing all historical records, such as historical aerial photographs, fire insurance maps, historical city directories, and historical topographic maps;
- Reviewing all state and local agency records, including but not limited to state environmental agencies, Building Departments, Fire Departments, and Health Departments;
- Interviewing all past and present property owners, occupants, or others associated with the property.
- Interviewing the Report User for title or judicial records for environmental liens and checking into all activity and use limitations as well as the reason for the preparation of the Phase I ESA. It is the user’s responsibility to provide this information. Otherwise, they may not be eligible for the innocent landowner defense.
Research is evaluated by the Environmental Professional (EP) to determine potential environmental risks to the property. These risks include past or present operations on the property that may have used hazardous substances or petroleum products
Some businesses of concern involve industries such as dry cleaners, gas stations, auto/vehicle repair, printing operations, and manufacturing. In addition to potential soil and groundwater contamination, ASTM E1527-13 addresses the concerns associated with contamination in soil vapor and the potential for vapor migration to pose a threat to onsite and offsite tenants.
(NOTE: While not part of ASTM requirements, Phase I ESA reports typically include a discussion of observed suspected asbestos materials, potential lead-based paint, and mold growth; The potential for lead in drinking water and radon is also of concern. Sampling these non-ASTM concerns is beyond the scope of a standard Phase I ESA, but can be included upon request.)
ASTM E1527-13 provides the guidelines for all Phase I ESA reports to meet industry standards. However, there are other factors to consider. When ordering a report, projects which are associated with Fannie Mae, Freddie Mac, U.S. Department of Housing and Urban Development, and the Small Business Association each have specific report requirements. These industry standards may also apply to other lending institutions.
Once phase 1 environmental site assessments are complete, the Environmental Professional will summarize the concerns that were identified and make recommendations about what actions, if any, are needed to address these concerns.
Please consult with the professionals at All American Environmental before engaging in any Environmental Site Assessments.
For your phase 1 environmental site assessments and all your environmental service needs, please contact All American Environmental, New Jersey.
All American Environmental
Call: (973) 663-1680
Address: 136 Edison Rd. Lake Hopatcong, NJ 07849
Email: allamericanenviro@gmail.com
