Phase I Environmental Site Assessments


As a prospective buyer of a commercial or industrial property, it is critical to have a firm understanding of the environmental condition of a property prior to purchase. Under the federal Comprehensive Environmental Response Compensation and Liability Act (CERCLA), the property owner is responsible for any environmental contamination at that property—whether or not the owner contributed to the contamination or is even aware of its existence.

Investigations are typically performed to mitigate the risk of being stuck with the potential costs and liabilities associated with environmental contamination. The performance of such investigations is commonly described as “environmental due diligence.”

Most commercial lenders require a Phase I Environmental Site Assessment (ESA) to be performed on these types of properties prior to lending, since the lender also has potential legal liability. The Phase I ESA also has value for cash buyers, as it provides important information in determining a property’s proper value. A Phase I ESA conducted in accordance with current ASTM standards provides certain liability protections and potential benefits (such as Brownfield tax credits) to a bona fide purchase when remediating and returning a property to beneficial use.

If you have any questions, contact Tim Brown at 614-964-7288.