Phase 1 ESA

Phase 1 Environmental Site Assessment is a fundamental part of the real estate due diligence process and provides critical information about environmental liabilities associated with a property being purchased.

Do you need a Phase 1 ESA?

A Phase 1 Environmental site assessment (Phase 1 ESA) is an investigation of a property’s current and historical use. Typically, a Phase 1 ESA involves a on-site inspection with detailed photography to document conditions, a review of records for information about past ownership and uses, and a review of these uses to determine if any of them would have likely involved hazardous materials.

Lenders require a Phase 1 ESA for all properties that are greater than 4 units.  100% of the time, lenders will require a Phase 1 ESA for commercial properties.  For multifamily properties – it can go either way.  A Phase 1 ESA interviews with past and present building occupants, and with owners of neighboring properties are also conducted to validate past uses.  A Phase 1 ESA does not involve any testing of things like paint, soil, or moisture, though a visual inspection may indicate the presence of hazardous materials.

Essel Environmental offers complete, thorough and expedited Phase 1 ESA and consulting that is uniquely tailored to real estate developers. Our goal is to provide you with a simple process that keeps you involved & informed throughout the process.

Speak with one of our friendly client representatives today to discuss your needs and how we can quickly and efficiently meet them. Call us at 1-800-595-7616 or use our quick and easy to fill out contact form. We are here to serve you!

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Quick Service

We get Phase 1 ESA’s done faster than our competitors without sacrificing quality.

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Personal Attention

While others may outsource Phase 1 ESA’s to the lowest bidder, we only use in-house engineers so that means the best quality product done by experienced & reliable professionals.

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Fast and Thorough

We have perfected the process to allow us to be fast without sacrificing quality & consistency. We make sure your lender will accept our Phase 1 ESA.

How Long Does a Phase 1 ESA take?

A Phase 1 ESA takes anywhere from 2 – 3 weeks.  Essel Environmental will give you the verbal within 1 week to let you know whether it’s a “greenlight” or “red light.”.  Then, if you want to proceed – we will get the report done.

How Much Does a Phase 1 ESA Cost?

A Phase 1 ESA costs anywhere between $1,800 to $4,600.  The cost is depdendent on the location of the property, the complexity of the history of the site & existing uses.

Our Bay Area environmental services and Phase 1 environmental site assessments are vast in scope and fast in implementation. Serving the entire state of California, our work comes with unrivaled local knowledge experience.

Essel Environmental covers and offers the entire scope of Phase 1 ESA services and requirements, delivered to you quickly and efficiently and always on time.

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Phase 1 ESA Frequently Asked Questions

Will my lender find your report acceptable?

“In most cases the answer is yes (99.9% of time).  In our 16 years of existence – we have never had a client have a Phase 1 rejected by their lender.

How long is the report for the Phase I ESA good for?

In keeping with the current ASTM standard, the report for a Phase I Environmental Site Assessment is valid for the period of one year. However, this is dependent upon the fact that necessary updates will be performed between six months and one year.  At the end of one year, the Phase I Environmental Site Assessment report needs to be done again.

Just what are the ASTM standards for conducting a Phase 1 ESA?

Because the ASTM standard for conducting a Phase I ESA is copyrighted, we are unable to post a copy of it here.  However, you can read a summary of the standard by visiting the following site: http://www.astm.org/Standards/E1527.htm. Plus, you can obtain a copy of the standard at the American Society of Testing & Materials.

Why would I need a Phase 1 ESA?

When acquiring properties (usually commercial and industrial sites), an environmental site assessment will be needed, and in order to analyze a property’s historical use and to learn if a potential for use of hazardous materials is present as well as any release from the site. A Phase 1 ESA is conducted for commercial and industrial properties, rural land, open undeveloped land, residential multi-family properties, and for other land that can be obtained in any real estate transaction.

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) was enacted by the United States Environmental Protection Agency (EPA) in 1980. Mainly known as the Superfund, CERCLA “created a tax on the chemical and petroleum industries and provided broad federal authority to respond directly to releases or threatened releases of hazardous substances that may endanger public health or the environment.”

In accordance with CERCLA, a property manager, owner, lender or lessor could be liable, from virtue of ownership or control of a property, for the remediation of hazardous substances in the groundwater and/or soil that may exist on a site, despite the fact that the previous property owner did not cause and/or contribute to the contamination.  What the completion of a Phase I ESA represents is due diligence and in providing an “innocent landowner defense” for prospective property purchasers and lenders.

The Phase I Environmental Site Assessment entails a scope of work that must meet the technical requirements stated in the ASTM (American Society for Testing and Materials) guidelines which were published as Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process (Standard E 1527).  This practice of ASTM is meant to allow a user to fulfill one of any requirements essential to qualifying for an innocent landowner, relevant property owner, or true prospective purchaser the limitations existent under CERCLA liability statute.

ASTM released a new standard called the “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” (ASTM Standard E1527-05) in 2005.  This practice has the purpose of defining good commercial and customary practice in the United States with regards to conducting an ESA of a commercial real estate parcel. This of course, entails respect to the range of contaminants that lies within the scope of Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (42 U.S.C. 9601) and for petroleum products.

Therefore, the intention of this practice is to allow a user to satisfy one of the requirements to qualify for the innocent landowner, relevant property owner, or true prospective purchaser for the limitations under the CERCLA liability statute.

The EPA (Environmental Protection Agency) also published the final All Appropriate Inquiry (AAI) Rule (40 CFR Part 312), Standards and Practices for All Appropriate Inquiries; Final Rule” in 2005 (read the Final Rule here). This AAI standard establishes the specific regulatory requirements for conducting all appropriate inquiries. This includes inquiries into previous ownership, environmental conditions and uses of a property for purposes of qualifying for selective landowner liability protections under CERCLA.

Parties now (since November 1, 2006) must comply with requirements of the All Appropriate Inquiries Final Rule, or follow the standards that are set forth in the ASTM E 1527 – 05 Phase I ESA process, and do so to satisfy the statutory requirements for conducting all appropriate inquiries.  Thus, all appropriate inquiries must be conducted in compliance with either of these standards under CERCLA to acquire protection from potential liability as an innocent landowner, a relevant property owner or a true prospective purchaser.

ASTM amended the old 2005 standard in 2013 to a new standard called the “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” (ASTM Standard E1527-13).  As it is, the changes were mainly editorial, and the standard remains substantially unchanged.

What is the difference between the Phase 1 and Phase 2 ESA?

A Phase 1 ESA report consists of conducting an inspection of the property; researching historical use; analyzing local groundwater conditions and reviewing known local environmental liabilities. The latter covers liabilities that may impact property value throughout land used limitations, as well as cleanup costs and civil or tort liability from mitigation of offsite contamination. As for the Phase 2 Investigation Report, it consists mainly of collecting groundwater and/or soil samples to discover if significant concentrations and amounts of contaminants are present on the property.

How long does it take to conduct a Phase 1 ESA?

Essel Environmental’s turnaround time for conducting and completing a Phase 1 ESA is usually two weeks and sometimes faster. But if our search for files at local environmental agencies shows there to be a file for the subject property, it may take a slightly longer time to complete the ESA report (usually one week). This is caused by the need to schedule an appointment to review the file, and is dependent upon appointment availability from said government agency.

What exactly is a Phase 2 ESA report?

A Phase 2 Investigation report is usually recommended when a Phase 1 ESA report finds what is considered a recognized environmental condition, and is done in order to screen/test the groundwater and/or soil for any potential significant environmental liabilities. And this, whether they might be toxic tort liabilities or regulatory-mandated cleanups. Phase 2 report most often entail using a hand-auger or drill rig to collect samples of shallow soil. And this to determine if use and previous storage of chemicals on a property may have released regulated substances into the ground which might be affecting property value.

Who is allowed to conduct a Phase 1 Environmental Site Assessment under EPA regulations?

Only individuals with the required work experience and an appropriate education in environmental assessment are allowed to conduct Phase 1 ESA reports. This is in accordance with the AAI Rule or All Appropriate Inquiries Rule (40 Code of Federal Regulations, Part 312).

What is a Phase 1 ESA REALLY?

An ESA needs to be in compliance with the latest ASTM Standard E-1527-13 regulations (which became effective on December 31, 2013). An ESA includes a thorough review of environmental databases; an onsite inspection; interviews with occupants, owners, relevant agencies and nearby properties; analyses of local geologic conditions; and reviewing historical records and data of the subject property. The report serves the purpose of determining if there are any potential or known environmental liabilities for said property. Such liabilities can consist of toxic-tort liability, regulatory-required cleanup, regulated waste disposal, land-use restrictions, human health exposure, and the potential for civil liability for nearby property devaluation.

Are mold techs, asbestos tech and home inspectors allowed to conduct a Phase 1 ESA?

The answer is NO. In accordance with EPA regulations, these individuals are not allowed to conduct a Phase 1 ESA report unless they meet the qualifications of being an environmental professional. Environment professionals need to include a statement of qualifications in the Phase 1 reports they conduct, thus proving their experience and education for conducting an ESA.

You've got questions. We've got answers.

Email us your Phase 1 ESA questions and our experts will answer them.

Every week, our engineers respond to the handful of questions we receive from our present & future clients.  Feel free to email us your question via the button above and we will answer them. If you don’t see your question answered this week – stay tuned and we will definitely answer the following week.

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