What is the Difference Between a Phase I and Phase II Site Assessment?

The scenario: You’ve found the perfect location for commercial property and you have decided it is the right time to purchase. It is an exciting time for the business, but when your contractor arrives he discovers an environmental hazard underneath your property. This could quickly become a costly error in judgment. 

Where it went wrong: You didn’t perform a Phase I Environmental Site Assessment (Phase I ESA) and do your diligence prior to purchasing the property. You are now left with the financial implications of environmental cleanup. 

The solution: Prior to investing in your new commercial property, you could avoid any surprises when it comes to environmental hazards by getting a Phase I ESA completed. This will reduce any liability when it comes to resolving any existing environmental issues. Learn more about what a Phase I Environmental Site Assessment is here 

Are Phase 1 ESA’s a legal requirement?

Federal regulations do not need a Phase I ESA to be completed on every commercial property. Although, CERCLA liability protection is only available when the assessments are started before the purchase of the property. When looking for a loan from the bank, they look at the use of the property and its history before determining if a Phase I ESA is required. 

It is often deemed important to get a Phase I ESA conducted before property transfers legal ownership, as the majority of lenders will require this to ensure that the property they are buying does not pose an environmental liability. Since the risk tolerance can vary, there is a slight grey area as to when a Phase I ESA is required. Mill Creek Environmental have put together the situations and industries as to when a Phase 1 ESA is clearly and often warranted: Some of the industries that require such assessment more often than not are: Gas Stations, Dry Cleaners, Vehicle Repair, Printing Operations, and Manufacturing. Please note that this is not a comprehensive list, for accurate advice you would need to contact our experts directly. 

Situations Where a Phase 1 ESA Would Be Beneficial 

When purchasing a property that is adjacent to commercial and industrial businesses it is important to invest in a Phase I ESA. Moreover, a property that is involved with regulated hazardous materials; a property with known environmental liens, or oil and gas exploration would all benefit from a Phase I Environmental Site Assessment. 

Learn more about what a Phase I ESA would look like here.

How Can Mill Creek Environmental Consultants Help You? 

An environmental consultant at Mill Creek Environmental can determine if the commercial real estate you are wanting to purchase has any underlying issues that can be a potential liability for the new owner and affect the value of the property. 

Mill Creek Environmental specialize in fast completion and first-class quality Phase I Environmental Site Assessments. If you would like more information or to request a no-obligation cost estimate – contact us today!

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