Alternatives when your Phase-1 ESA is detected with environmental concerns

Phase 1 ESA (Environmental Site Assessment) is one of the essential commercial real estate transaction procedures. The report helps assess if current or historical property uses have in any way impacted soil or groundwater, which may lead to a possible threat to the environment and human beings. 

The primary purpose of the Phase 1 ESA is to identify actual or potential site contamination. If an issue is found, it presents a potential liability for the lender or owner, thus affecting the property’s overall value in question.

While selecting a new project – residential, commercial or significant land development – Phase I ESA is a critical step to satisfy the requirements of CERCLA (Comprehensive Environmental Response, Compensation and Liability Act). Environmental assessment before going for any transaction becomes necessary to ensure that the property is free from contamination. 

Some prevalent concerns are dry cleaners, gas stations, vehicle repair, printing operations, and other hazardous manufacturing processes.

Procedures involved in Phase 1 Environmental Site Assessment

The report is made for all types of properties and includes the following:

  • A physical visit to the site to observe current and past uses of the property. The usage of adjacent properties is also considered for better assessments
  • A review of federal, state, and local regulatory databases including underground and above ground storage tanks, storage, and disposal of hazardous substances including petroleum products, etc.
  • A review of historical records with aerial photographs, fire insurance maps, city directories, and other historical topographic maps
  • Interviews with current and past property owners and occupants

Once Phase 1 ESA is complete, professionals summarize the concerns identified for the property. It includes suspected asbestos-containing materials (ACM), potential lead-based paint (LBP), mould growth, suspect of lead in drinking water and other hazardous substances.

Based on the recommendations, necessary actions are taken to satisfy the requirements of CERCLA. The cost of remedial measures is calculated to negotiate with the seller and decide to purchase.

What is the alternative approach when your Phase I ESA has Environmental Concerns?

When the Phase 1 Environmental Site Assessment reveals substantial evidence of acute contamination, which has impacted the soil or groundwater beneath the property, a site-specific and economically correct approach is adopted. This may include a further examination of Phase 11. 

The inspection’s ultimate goal is to evaluate and determine the presence of environmental liability and additional potential costs for the remedial procedures.

Environmental specialists provide consultants with property rehabilitation strategies. They also suggest alternative and cost-effective options to get rid of the chemical contaminants. The specialists’ teams serve as oversight consultants during the remediation and ensure that the client’s interests are taken healthy. The range of services may include:

  • Phase II Environmental Site Assessments
  • Brownfield Assessments
  • Business Environmental Risks
  • Remedial actions to be taken
  • Ongoing monitoring for the corrective actions

When evidence of contamination is found, the different approach is to find out the right solution. Additional research, interviews, analysis are conducted to reveal that the pollution will not pose a significant risk to the environment and will not pose a threat to human health.  

Phase II Environmental Site Assessments

Once all the assessments are carried on, and it is found that the property has a significant environmental risk, then Phase II Environmental Site Assessments are carried out. The previous report serves as the site model, and an investigation model is prepared, which includes developing plans. The data summarization will reveal that remediation is further required or not.

If Phase II investigation reveals any unsafe material, then remediation work is carried out with appropriate guidelines. Finally, sampling and testing are carried out to confirm that there is no more contamination and the site is free, meeting the CERCLA compliances.

Is a Phase I Environment Site Assessment required?

Yes! The assessment is required for any real-asset purchase and predominantly when it is financed through a bank. Avoiding ESA may result in bad real estate investment and may provide you with CERRCLA liability. It is good to understand that one has met their due diligence obligation making out a secure investment.


Phase 1 ESA is a system to help prevent paying for expensive contagion cleaning costs. Potential Environmental Concerns are well associated with the purchase of assets. A recognized environmental condition indicates known or possible contamination. The investigations enable the purchaser to establish if the contamination will remain or require additional work when the site is developed further. The comprehensive report helps assess if a piece of land or property is worth buying.

Make informed decisions, take Phase 1 ESA to ensure environmental safety.