As environmental concerns continue to grow, it is becoming more frequent that a commercial real estate transaction will require either a Phase 1 or 2 Environmental Site Assessment.
You may be wondering what the differences are between Phase 1 and Phase 2 ESA, and you may have already found that the information around the subject matter is written in very technical language, typically for inspectors to use as guidelines.
WHAT IS A PHASE I ESA?
For starters, you will never just get a Phase 2 ESA without having a Phase 1 ESA first. The Phase 1 ESA includes evaluating the property by collecting historical and environmental documents about the property and surrounding area, talking to current or past occupants, and a physical site inspection.
When the Phase 1 assessment is complete, you will be given a report. This report will outline the outcomes of your assessment. If your property does not meet certain requirements, you’ll be given the information needed to correct the course and move forward with the sale of your property.
However, if your report shows that there is a Recognized Environmental Condition (REC), you will most likely have to move into Phase 2.
WHAT IS A PHASE II ESA?
What is included in Phase 2 ESA depends solely on the findings of Phase 1. This could be groundwater analysis or the installation of monitoring wells. It may include indoor air sampling, mold sampling, asbestos sampling, lead sampling, etc.
The need for any sampling or testing in Phase 2 Environmental Site Assessments is based purely on the findings of the Phase I. Therefore, just take a look at the outcomes of Phase I and you’ll get an idea of what types of tests would be done during Phase 2 ESA. After Phase 2 is complete, you’ll receive a report with the results and suggested changes to make the property compliant with environmental regulations.