If you’re new to investing in property, you may not realize how important it is to protect yourself against potential environmental liability with a Phase 1 Environmental Site Assessment.
WHAT IS A PHASE I ENVIRONMENTAL SITE ASSESSMENT?
Commonly referred to as an ESA, or Phase I ESA, is completed to research the current and historical uses of a property as part of a commercial real estate transaction. The intent of the report is to assess if current or historical property uses have impacted the soil or groundwater beneath the property and could pose a threat to the environment and/or human health. If these issues are found, it presents a potential liability for the lender and/or owner, as well as affecting the value of the property.
It helps you gather sufficient information to develop an independent and professional opinion about the environmental condition of the property. It’s part of your environmental due diligence as a commercial buyer and helps you identify whether there is actual or potential environmental contamination.
Not only Phase I ESAs are helpful for just real estate transactions, like new purchases, and bank financing, but also need for, refinancing, and foreclosures. By getting a Phase I Environmental Site Assessment, you help protect yourself from environmental liability.