What is a Phase I ESA?

November 8, 2023

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A Phase I Environmental Site Assessment, also known as a Phase I ESA (ESA), identifies historical environmental conditions (HRECs), controlled environmental conditions (CRECs), and recognized environmental conditions (RECs), as well as de minimis conditions of a specific property. The ESA is utilized to understand environmental risk by identifying potential contamination (if any) that impacts a property. This report is often used to protect buyers, sellers, lenders, and other parties in real estate transaction(s).

What’s Included in a Phase I ESA?

Complying with the industry standard set by ASTM E1527-21, and adopted by the EPA, a Phase I ESA starts with a thorough walk-through of the property. This assessment is conducted by one of our in-house environmentally trained staff. Visual observations of the site are conducted to document the current and past conditions of the property. Once this initial step is taken, our professionals will conduct the following:

  • Review federal, tribal, state, and local government databases to find the location of environmentally hazardous materials and waste in aboveground storage tanks (ASTs), underground storage tanks (USTs), or any storage or shipping containers that have the possibility of leaching harmful chemicals into the soil and groundwater.
  • Examine historical maps including, but not limited to, topographic maps, fire insurance maps, aerial photographs, and city directories.
  • Review records for any environmental cleanup liens as well as activity and use limitations (AULs).
  • Interview past and present property owners, operators, occupants, and any other entities familiar with the property.

The property and surrounding areas are researched and assessed to identify any potential environmental hazards. Findings are established in a formal report and are signed by an Environmental Professional.

It is important to note that although the guidelines set by ASTM E1527-21 are the industry standard, Phase I ESAs can be tailored to include more information upon request. This can include projects with Fannie Mae, Freddie Mac, and U.S. Department of Housing and Urban Development (HUD) scopes. In addition to the services listed above, our team of professionals can analyze the potential lead-based paint, radon, asbestos-containing materials, mold, and the presence of lead in the drinking water of a property.

Who Can Benefit from a Phase I ESA?

Utilized as an environmental due diligence tool, a Phase I ESA can provide liability protection for property buyers. And, it can be used as a negotiation tool in determining the purchase price of a property if environmental contaminations are present. This ESA can also be completed prior to closing to meet the requirements of CERCLA’s innocent landowner defense under All Appropriate Inquiries (AAI). A Phase I ESA can be especially beneficial for high-risk properties such as:

  • Dry Cleaners
  • Gas Stations
  • Printing Operations
  • Auto Repair Shops
  • Manufacturing

This assessment, however, is not limited to these types of businesses, since ultimately, risk can be found at any property type. An ESA can be utilized on various types of properties including multi-family residential, commercial buildings, industrial sites, agricultural properties, telecommunication properties, vacant lots, and undeveloped land. No matter what property you own or intend to buy, having a Phase I ESA is an important tool in protecting yourself and mitigating environmental risks.

Need a Phase 1 ESA? Moran Construction Consultants has the expertise to safeguard your investment. Give us a call at 866-545-3350 or contact us online to learn more!

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