Environmental site assessments (ESAs) are an essential part of the due diligence process for any property transaction. They provide valuable information about the environmental condition of a property and can help identify potential contamination risks and liabilities. But when exactly do you need an environmental site assessment. Here we’ll explore the different scenarios in which an ESA is necessary and why it’s important to conduct one.
What is a Phase 1 Environmental Site Assessment?
Before we dive into when you need an environmental site assessment, let’s first define what it is. An environmental site assessment is a comprehensive evaluation of a property’s environmental condition. It involves a thorough review of the property’s history, current use, and surrounding area to identify any potential environmental risks or liabilities.
There are two main types of environmental site assessments: Phase 1 and Phase 2. A Phase 1 environmental site assessment is a non-intrusive investigation that includes a review of historical records, site inspections, and interviews with current and past owners and occupants. A Phase 2 environmental site assessment is a more in-depth investigation that involves collecting and analyzing soil, water, and air samples to determine the presence of contaminants.
Now that we have a better understanding of what an environmental site assessment is, let’s explore when you need one.
When is a Phase 1 Environmental Site Assessment Required?
Real Estate Transactions
The most common scenario in which an environmental site assessment is needed is during a property transaction. Whether you’re buying or selling a property, it’s important to conduct an ESA to identify any potential environmental risks or liabilities. This is especially important for commercial properties, as they often have a history of industrial or commercial use that may have resulted in contamination.
In most cases, lenders will require a Phase 1 Environmental Site Assessment before approving a loan for a property. This is to ensure that the property is not contaminated and that there are no potential risks or liabilities that could affect the value of the property.
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Development and Construction Projects
If a third party develops a property, whether it’s for residential or commercial use, and leases the land, it’s important to conduct an environmental site assessment. This will help identify any potential environmental risks or liabilities that could affect the development process.
When Do You Need a Phase 2 Environmental Site Assessment?
Sometimes a Phase 1 Environmental Assessment may lead to a Phase 2 Environmental Site Assessment. If contamination is suspected, the owner may want to test the soil for heavy metals, hydrocarbons and different types of volatile organic compounds, for example. While a Phase 2 Environmental Site Assessment is less common, there are some situations that will trigger further investigation.
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Potential Contamination
If you own or manage a property, it’s important to conduct regular environmental site assessments to ensure that the property is not contaminated and that there are no potential risks or liabilities. This is especially important for properties that have a history of industrial or commercial use, as they are more likely to have environmental issues.
For example, a landowner may want to conduct a small-scale Phase 2 ESA due to potential contamination from a tenant. Bolson Engineering and Environmental Services was recently retained to test the soil for a property that had been leased to trucking company. A significant amount of hydrocarbons has been spilled into the soil. In this scenario, the tenants were required to remediate the soil. There are a variety of scenarios that may make this process necessary to protect commercial property owners (i.e. nearby oil contamination, fire, high machinery traffic, chemical use, oil drilling, underground tanks, etc.).
Final Thoughts
In conclusion, an environmental site assessment is necessary in a variety of scenarios, including property transactions, property development, property management, government regulations, and insurance purposes. It’s important to conduct an ESA to identify any potential environmental risks or liabilities that could affect the value of a property or pose a threat to human health and the environment.
If you’re in need of an environmental site assessment, it’s important to work with a reputable environmental consulting firm such as Bolson Engineering and Environmental Services that has experience conducting Phase 1 and Phase 2 site assessments. They will be able to guide you through the process and provide you with a comprehensive report that outlines any potential issues and recommendations for remediation.
Don’t overlook the importance of an environmental site assessment. By conducting one, you can ensure the safety of your property and protect yourself from potential liabilities. Bolson Engineering and Environmental Services is passionate about development. Please contact us for a quick turnaround and seamless Phase One ESA.
