Environmental Site Assessment (ESA) Phase I

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and Superfund Amendments Reauthorization Act (SARA), the federal law, established a system for identifying and cleaning up properties containing hazardous substances. EGS has conducted several Phase I ESAs, and most of the Phase I’s were conducted as part of the “Due Diligence” requirements for real estate sales transactions.

The purpose of Phase I ESA is to gather sufficient information to develop an independent professional opinion about the environmental condition of the property and to identify actual or potential environmental contamination that may impact the property value or affect the claim to an “innocent landowner” exemption following the acquisition.

EGS conducts comprehensive ESAs by following the United States Environmental Protection Agency (USEPA) Standards and Practices for “All Appropriate Inquiries [(AAI), 40 CFR Part 312],” and guidelines established by the American Society for Testing and Materials (ASTM) in the Standard Practice for Environmental Site Assessments (ASTM Standard Practice E1527: Phase I Environmental Site Assessment for real estate transactions, property development, bank financing, re-financing, and foreclosures and other audit programs.

Codified into Federal Law (40 CFR Part 312) on November 1, 2005, which requires complying with the U.S. Environmental Protection Agency (EPA’s) All Appropriate Inquiries Rule (“APIR”). On December 31, 2013, EPA finalized a rule that the new ASTM Standard (E1527-21) is a standard by which parties may comply with the APIR (40 CFR Part 312).

40 CFR Part 312 defines the term Environmental Professional (EP) and establishes qualifications for those performing Phase I Environmental Site Assessments (ESAs) to hold a current Professional Engineer (PE) or Professional Geologist (PG) license or registration from a state, tribe or U.S. territory (or the Commonwealth of Puerto Rico) and have the equivalent of three years of full-time relevant experience or 4 year Baccalaureate degree in any engineering or science field with 5 years of full-time relevant experience.

Phase I ESAs should be an essential step in acquiring commercial or industrial property. Phase I ESAs are the first phase of investigating if there is a potential for environmental risk or contamination on a property that would affect the value of the real estate property and if additional investigation and testing are warranted.

Many transfers of ownership of commercial property are required by law to receive a Phase I ESA. In addition, banks will not approve a loan for the purchase of property if a trained environmental professional has not reviewed the property for risk of environmental contaminants. There are some contaminants on a property that may require further testing and remediation.