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Phase I Environmental Site Assessment

A Phase I Environmental Site Assessment (ESA) is critical when trying to determine whether a parcel of land is suitable for purchase and/or development. Phase I assessments are most often required by banks and other lending institutions as a due diligence measure for commercial real estate transactions. A lending institution will likely require a Phase I ESA when applying for a loan for purchase of a commercial property, or using a property for collateral purposes. Phase I ESAs are designed to determine the potential for recognized environmental conditions (RECs) at a site. A REC is the presence or likely presence of any hazardous substances or petroleum products due to a release to the environment, or any environmental condition which may negatively impact the property. A lending institution will utilize a Phase 1 ESA to determine if there will be an environmental liability associated with the property if it is foreclosed upon in the future.


The completion of a Phase I ESA (environmental site assessment) is not outlined specifically within any federal or state regulations, but the completion of a Phase I ESA will satisfy the All Appropriate Inquiries (AAI) requirements as outlined within the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) for commercial real estate, and allow a property to take advantage of the defenses outlined therein. Though there are no federal or state guidelines pertaining to the completion of an environmental site assessment, the industry standard is the American Society of Testing and Materials (ASTM) guidance document ASTM E1527-13. Conversely, the Transaction Screen process, which does not satisfy the AAI requirements, is an alternative to the Phase I ESA for “low risk” environmental due diligence.


A Phase I is a database search and a site visit to determine if there is a potential for environmental impairment to the site.

The historical usage and transaction history (if any) of the site property and all nearby parcels are examined to identify potential liability risks associated with the property. This includes: site inspections, interviews with individuals familiar with the history of a site, and a review of federal and state regulatory information. Typically, there is no physical testing done as a part of a Phase I ESA. The land is studied at a surface level, and does not include the collection or laboratory analysis of any soil or groundwater samples.


If a potential environmental condition is identified that warrants additional investigation, a Phase II Environment Site Assessment is typically requested by the lending institution. The Phase II includes subsurface investigation (collection of soil and groundwater samples via subsurface test holes, borings, etc.) to determine if contamination is present.


Though the ASTM guidance has been the industry standard for years, the new guidance document was finalized in November 2013. The changes adopted within the new guidance document do not substantially change Phase I ESA methodology or the end users reliance on a Phase I report. However, some other changes include new and unfamiliar terminology, and may affect the amount of time or the costs associated with the tasks required by the environmental professionals preparing the Phase I ESA reports. It will be important to rely on your environmental professionals to educate you when necessary, and Point to Point Environmental is prepared to provide full service environmental consulting services using the new guidance document.


Point to Point Environmental conducts Phase I ESAs, in Georgia and throughout the Southeast, that will meet and exceed industry standards. If you would like to discuss your Phase 1 Environmental site assessment needs, please contact Point to Point Environmental at 678-565-4440.