Environmental Site Assessments
Phase I ESA
A Phase I Environmental Site Assessment (ESA) is a critical component of the environmental due diligence process when considering the transfer of real property. The purpose of a Phase I ESA is to assess real estate with respect to the range of contaminants within the scope of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) as well as petroleum products.In many instances, a Phase I ESA will be required by a lender involved in the property transaction.
The primary goal of a Phase I ESA is to identify reasonably-attainable evidence of recognized environmental conditions(RECs) in connection with a subject property. The term recognized environmental condition means: (1) the presence of hazardous substances or petroleum products in, on, or at the subject property due to a release to the environment; (2) the likely presence of hazardous substances or petroleum products in, on, or at the subject property due to a release or likely release to the environment; or (3) the presence of hazardous substances or petroleum products in, on, or at the subject property under conditions that pose a material threat of a future release to the environment.
What Is The Industry Standard?
The industry standard for conducting a Phase I ESA is the American Society for Testing and Materials (ASTM) E1527 -Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. Following this standard allows a User to satisfy the All Appropriate Inquiry (AAI) process, and is intended to permit a User to satisfy one of the requirements to qualify for the innocent landowner, contiguous property owner, or bona fide prospective purchaser limitations on CERCLA liability. The American Society for Testing and Materials approved a new standard (E1527-21) for conducting Phase I Environmental Site Assessments, published November 2021. Mitten has incorporated the procedures outlined in ASTM E1527-21 for completion of new Phase I ESAs.
Completion of a Phase I ESA Generally Consists of the Following Activities:
Field observations made during a site and area reconnaissance
Correspondence and communications with persons familiar with the Subject Property
Review of available standard historical documents such as aerial photographs, fire insurance maps, topographic maps, and municipal/county records when available
Review of federal, state, and local environmental regulatory databases
Search (and request) of environmental records at state and local regulatory agencies
Review of available User-provided title information
A Phase I ESA report is then prepared to summarize the assessment findings. Further assessment may be recommended depending on the conclusions of the Phase I ESA, which may include testing of soil, groundwater, soil vapor, etc.