If you plan to purchase, rent, refinance or lease a commercial or industrial property, you could be liable for pre-existing environmental conditions on the site.  These include:

• Hazardous Waste
• Chemical spills
• Petroleum spills
• Soil contamination
• Groundwater contamination

Limit Your Liability
To protect yourself and to limit your liability, it is highly recommended that you perform a Phase I Environmental Site Assessment of the property in question. 

A Phase I Environment Site Assessment (Phase I ESA) satisfies one of the requirements of the Innocent Landowner Defense to liability imposed by the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

Phase I ESAs are performed by buyers, sellers, brokers and lenders involved in the sale, purchase, re-finance or lease of industrial, commercial and agricultural properties. Phase I ESAs are typically required by lenders in order to assure that properties do not possess environmental conditions that could diminish the value of the property, the ability of the borrower to repay, or to establish baselines to allocate responsibility for clean-up costs.

What is a Phase I ESA?
A Phase I ESA is a detailed study of the property and surrounding properties including a thorough site inspection, occupant interviews, historical records searches, a study of past land uses, spills, tanks, and other environmental conditions.  Gathered information is presented in a written report format.

Our Phase I ESAs are performed in accordance with ASTM Standard E1527-05.

Cost

The cost of an ESA depends on the following factors:

• Scope of work (Phase I ESA vs. Transaction Screen)
• property size
• property location
• size and type of facilities
• nature of surrounding properties
• additional services (asbestos samples, mold testing, Radon testing, water testing, etc.).

Phase I ESA approximate costs
The approximate costs of Phase I Environmental Site Assessment are listed below by category:

• Small rural commercial property such as a gas station:  $1,400 to $2,000.
• Small urban commercial property such as an auto repair shop:  $1,500 to $2,200.
• Large rural commercial property such as a strip mall:  $2,000 to $2,800.
• Large urban commercial property such as an apartment complex:  $2,200 to $3,200.

What is needed to proceed?

Documents
If available, we need copies of the following documents:

• Property title
• Previous environmental reports

Information
We need as much of the following information as available:

• Accurate property address
• Property tax ID number
• Name, address, and telephone of the current owner and, if possible, previous owners
• Name, address, and telephone of the current occupant(s) and, if possible, past occupants.

What do the Phases mean?

Transaction Screen
A limited study of historical records and site features, per ASTM E1528-06. 

Phase I
A non-invasive in-depth study of the property and relevant historical records.

Phase II
Invasive sampling and analysis of the site, often by subsurface drilling.

Phase III
Remediation of adverse site conditions including soil removal, tank removal, hazardous waste removal, and groundwater clean-up.

History of Environmental Due Diligence

In response to Love Canal and other environmental disasters during the 1980s, a number of laws and regulations (including Superfund) were developed in order to protect the environment from similar situations.

The Superfund law was created to identify problem sites before disaster strikes, assess the threat, clean up the worst sites, and recover the cleanup costs from Potentially Responsible Parties (PRPs).

Superfund laws are strict, joint and several.  This means that the laws have very broad powers in assigning blame and collecting cleanup costs from PRPs.  The laws allow anyone or any entity that had anything to do with the property or the materials that caused an environmental problem on the property to be assigned as a PRP with the possibility of being required to pay for any or all of the cleanup costs.

Under the federal Superfund law, a purchaser of real estate is protected from liability for property contamination it did not know about at the time of purchase, if it conducted "all appropriate inquiry" into the previous ownership and uses of the property.

Over time, the American Society for Testing and Materials (ASTM) E1527 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process came to be recognized as the standard for “all appropriate inquiry.”

On January 1, 2002, the Small Business Liability Relief and Brownfields Revitalization Act was enacted.  The act required that the EPA promulgate its own standard for meeting the “all appropriate inquiry” requirement.

Over several years, the EPA worked with industry leaders to develop the new All Appropriate Inquiry Standards, which took effect on November 1, 2006.

Property Condition Assessments

Property Condition Assessments (PCAs) are often performed in conjunction with the performance of Phase One Environmental Assessments.  A PCA provides an engineering opinion of the estimated costs for maintaining a property after the purchase or finance of the property.  This includes the costs for any required immediate replacement and repair for property components and also the costs for replacement and repair over the life of a loan.  The EI Group is available to perform PCAs in any location throughout the United States.

Alta Inspection Services is a leading provider of comprehensive environmental risk management and due diligence solutions for lenders and commercial property managers.  Drawing upon the best and the brightest environmental specialists in the area, we utilize innovative technology to develop solutions to complex environmental issues. Through the integration of diverse environmental skill sets, our unified structure of professionals and technology affords us the ability to provide you with specific, streamlined organizational improvement and program management at an affordable price.

We recognize that not all environmental situations or levels of service are alike. That’s why we work hard at discerning your specific needs and offer you a diverse selection of custom tailored services; allowing you to put the focus back on maintaining and growing your business goals.  Alta Inspection Services comprehensive menu of environmental services has been designed to support your operations, goals and environmental commitments through the highest levels of quality, cost-effectiveness and customer attention. 

Our clients are a continued testament to the quality of our service and we are extremely proud of the track record that has helped to set us apart in today’s environmental marketplace.  As requirements associated with commercial property acquisitions and divestitures continue to rise, we remain firmly committed to providing you with a single-source for all your environmental due diligence needs.

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