Phase I 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 as an Environmental Firm – we have never had a client have a Phase 1 Environmental Site Assessment rejected by their lender.
How Long is a Phase I ESA Good For?
A Phase I ESA is valid for the period of one year. This is dependent on the fact that necessary updates will be performed between six months and one year. At the end of the year, the Phase I Environmental Site Assessment will need to be repeated.
How Long Does A Phase 1 ESA Take?
A Phase I ESA will generally take two to three weeks to complete on average. Essel Environmental’s turnaround time for conducting and completing a Phase 1 Environmental Site Assessment 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 Are the Phase 1 Environmental Site Assessment ASTM Standards?
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 Choose a Phase 1 ESA?
When acquiring properties (usually commercial and industrial sites), an environmental site assessment will be needed, and 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 Environmental Site Assessment 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 acœcreated 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. Phase 1 Environmental Site Assessment companies provide due diligence with a 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 1 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 1 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.
Phase 1 Environmental Site Assessment companies 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 1 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 a Phase I ESA and a Phase II ESA?
A Phase 1 Environmental Site Assessment report consists of conducting an inspection of the property; researching historical use; analyzing local groundwater conditions and reviewing known local environmental liabilities. A Phase 2 Environmental Site Assessment consists mainly of collecting groundwater and/or soil samples to discover if significant concentrations and amounts of contaminants are present on the property.
What exactly is a Phase 2 ESA report?
A Phase 2 environmental site assessment is the process in which soil samples are taken from the property and analyzed in a lab to assess the lateral and vertical impact of the soil, groundwater or vapor underneath the surface. A Phase 2 assessment is usually recommended when a Phase 1 Environmental Site Assessment finds what is considered a recognized environmental condition and is done to screen/test the groundwater and/or soil for any potential significant environmental liabilities. This is 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 and Phase 1 Environmental Site Assessment companies with the required work experience and an appropriate education in environmental assessment can 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 Environmental Site Assessment?
A Phase I 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. An ESA needs to follow the latest ASTM Standard E-1527-13 regulations (which became effective on December 31, 2013). 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.