What is a Phase I Environmental Site Assessment (ESA)?
A Phase I Environmental Site Assessment (ESA) is the first step in ensuring the property you’re buying is safe, has no hidden risks, and is compliant with regulations. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), property owners can be held liable for the cost of pollution cleanup if the property is not properly assessed before purchase. Most lenders will require a Phase I ESA before loan approval.
While not every Phase I ESA is the same and is tailored to the client’s needs, the basic steps are as follows:
Pre-Assessment Preparation - collecting all the necessary information on the property including its history, regulations, and ordinances
Site Inspection - surveying the site in person to visually inspect for any signs of potential contamination
Interviews and Documentation - interviewing property owners, neighbors, and local officials along with anyone else who may have interacted with the property
Data Compilation and Analysis - the ERG environmental specialist will compile all their findings and put them together for the client so it’s easy to read and understand
Reporting and Recommendations - the final report is prepared and the ERG team will offer expert advice to help with any environmental issues
The Phase I ESA is compiled per the American Society for Testing and Materials (ASTM) standards and most reports are broken into the following components.
Executive Summary
Findings
Recommendations
If, after inspection, no environmental hazards have been found, the report can be sent to your lender, and you will have peace of mind that the property you’re buying is safe, compliant, and of appropriate valuation.
However, if the property has identified environmental risks, our ERG professional will share tips on handling and mitigating those risks in a timely and cost-efficient manner. Some possible next steps would be:
Disposing of built-up waste
Excavating and removing contaminated soils
Treating contaminated soils or groundwater
Building barriers to prevent the spread of contamination