Property Site Assessments


When purchasing commercial real estate a buyer must be aware of any potential environmental liabilities they will become responsible once the property is purchased.  An assessment of the property by an environmental professional can assist the buyer in identifying and quantifying such liabilities. Once an assessment has been completed, and the proper documentation has been completed, a property owner has a second layer of protection through the Innocent Land Owner Act against unidentifiable liabilities as long as one can prove a thorough investigation was conducted prior to purchasing a property. 


Phase I Site Assessment

Phase I Purpose: To identify environmental conditions prior to entering into a contract for sale, re-financing, or option agreement, and ultimately to assist property owners to choose a site that presents manageable environmental risks.
Goal and Objectives: A Phase I Environmental Site Assessment (ESA) is a qualitative assessment intended to help owners of property satisfy one of the requirements to qualify for CERCLA's(1) innocent landowner defense. Since the mid-1980s, it has also been incorporated into the environmental policies of most lending organizations as a requirement of any loan application involving a parcel of commercial real estate.
Please note that in a Phase I ESA, no samples nor tests are made of any materials (i.e., no air, water, soil, building materials or site substances are tested or analyzed). In addition, a Phase I ESA is not an operational regulatory compliance audit. Federal, state, and local laws may impose environmental obligations that are usually not included in a Phase I ESA.
READ THE ENVIRONMENTAL POLICY OF YOUR BANK. ARE YOU REQUIRED TO PERFORM AN ASSESSMENT BEYOND THE SCOPE OF ASTM(2) E 1527 STANDARD PRACTICE? Non-scope considerations include, but are not limited to: asbestos-containing materials, radon, lead-based paint, lead in drinking water, and wetlands.
(1) CERCLA = Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
(2) ASTM = American Society for Testing and Materials


Phase II Site Assessment

A Phase II assessment may be defined as a quantitative assessment. It is the actual testing for specific hazards, which may be identified in the Phase I assessment, such as soil (soil borings), water (monitoring wells), on-site substances, and direct testing of building materials and the property. A Phase III assessment recommends management practices (i.e., corrective action) of the confirmed environmental conditions based on the findings of the previous phases.
For Your Information: It has been our experience that no environmental site assessment can eliminate uncertainty regarding the potential for identifying recognized conditions on a property. Historical research combined with the site investigation is the principal source for identifying environmental conditions on a property.


Comprehensive Site Assessment

The Comprehensive Site Assessment (CSA) documents investigation activities performed to characterize the cause, significance, and extent of contamination from a release from a UST system.