ENVIRONMENTAL SITE ASSESSMENTS
An Environmental Site Assessment (ESA) is an essential part of your due diligence when buying or refinancing a commercial or industrial property and, in some cases, may be considered for residential properties. An ESA can potentially save you thousands of dollars in expenses and help avoid lawsuits and liability for environmental damages.
Read on for more information, or click the button below to contact us and let our trained professionals help you decide whether a Phase I or Phase II ESA is something you need.
ENVIRONMENTAL SITE ASSESSMENTS
An essential tool to protect yourself from liability that may come from acquiring property having environmental defects.
An Environmental Site Assessment is the first step in protecting yourself from liability, including cleanup costs, when acquiring property. Remember Love Canal from the 1970s? After that environmental disaster, the EPA and Congress stepped in to make sure those responsible for contamination were held accountable for the cleanup and costs. The problem though, is that innocent purchasers got caught in the EPA’s snare. An ESA can help you avoid the trap.
Why Get a Phase I ESA?
Phase I ESA’s are conducted for real estate and business transactions such as land purchases, building purchases, leases, business purchases, new residential developments and bank loans. Our Phase I ESA reports are in compliance with the American Society for Testing and Materials (ASTM) Standard E-1527-13. This ASTM standard adheres to the Environmental Protection Agency’s “All Appropriate Inquiries” rule, codified into the federal regulations by the EPA (40 CFR Part 312). This type of environmental report is the one required by lenders and is highly recommended prior to purchasing commercial or industrial real estate, or prior to starting new residential developments.
All Appropriate Inquiries Rule
The EPA’s All Appropriate Inquiries rule governing the scope of Phase I Environmental Site Assessments went into effect on November 1, 2006 and provided specific scope requirements for a Phase I ESA to meet the requirements of CERCLA’s Innocent Land Owner defense.
In our environmental risk practice, we help buyers meet the legal requirements for the CERCLA innocent landowner defense and we provide practical business advice on environmental liability to our clients.
ASTM E1527-13 Standard Update
On November 6th, 2013, ASTM published the long anticipated new standard for conducting Phase I Environmental Site Assessments, ASTM E1527-13. ASTM E1527-13 took effect immediately and replaces the E1527-05 standard as the industry best practice for Phase I ESA’s. The changes from the 2005 to 2013 ASTM standards do not significantly alter the Phase I Environmental Site Assessment report or process, but there are a few key changes you should be aware of.
The most significant changes include:
File Reviews – The E1527-13 standard imposes a stronger imperative for conducting regulatory file reviews. The environmental professional reserves the right to forego such a review, but must explicitly explain in the report why a review is not warranted.
Vapor Migration – E1527-13 places greater emphasis on assessing impacts to the subject property from vapor migration. This is done through several changes in the standard: 1) clarifying that the definition of a release does include contamination in the soil vapor phase, not just in soil or groundwater; 2) adding a definition of “migration” that includes vapor (as well as soil and groundwater); and 3) clarifying that vapor migration/intrusion does not fall under the category of an Indoor Air Quality concern (which is out of the ASTM E1527-13 scope of work).
Definitions – Several definitions have been clarified and simplified, and a new definition has been added: a “Controlled Recognized Environmental Condition” or “CREC.” You will now see CREC as an additional section being discussed in the executive findings and conclusions.
Phase I ESA Scope
What’s In It For You?
Site Visit
- Inspection of the site by a trained and experienced inspector
- Catalog the presence of hazardous materials or petroleum products
- Historical Aerial Photographs
- Reverse Street Directories
- Building Permits
- Planning Records
- Topographical Maps
- Sanborn Fire Insurance Maps
- Department of Oil and Gas Maps
- Title Information
Geology and Hydrogeology
- Soil Type
- Geological Setting
- Groundwater Depth
Regulatory Research
- Fire Departments
- State Environmental Agencies
- Federal Environmental Agencies
- Interview Tenants and Owners
- Interview State and Local Regulators
- Review Provided Reports
Phase I ESA Services from MGM
About our Phase I Environmental Site Assessments:
- All our Phase I’s are done in strict accordance with all current ASTM & AAI requirements. Our inspectors were trained by the ASTM, meaning you get a qualified Phase I ESA from an environmental expert.
- We coordinate our environmental due diligence with your legal, financial, and insurance institutions, or your legal and HSE departments to ensure your Phase I will stand up to whoever wants, needs, or requires it.
- Our evaluations on your property and its history are thorough, and done to find any possible environmental issue that may have ever occurred.
- If conditions warrant, we will advise you of the possible need for a Phase II for the further investigation of potentially contaminated sites and properties.
- We provide assistance to potential property sellers to reduce or eliminate environmental liabilities before the property is listed for sale, also known as sell side assistance.
- Many clients are now using Phase I ESA’s as part of their due diligence when negotiating buy/sell agreements to provide further protection prior to the close.
Limited Environmental Due Diligence Products
Not all circumstances require a full Phase I Environmental Site Assessment. If the user is not looking to qualify for CERCLA liability protection, such as many lenders conducting environmental due diligence for loan originations, a tiered environmental due diligence policy utilizing both the Phase I and limited-scope or “desktop” environmental reports can be successful at screening for high environmental risk properties.
