Frequently Asked Questions
The purpose of a Phase I ESA as defined by the ASTM E 1527-13 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process is to identify recognized environmental conditions associated with a commercial real estate property. Recognized environmental conditions is defined by the standard as the presence or likely presence of any hazardous substances or petroleum products in, on, or at the property: (1) due to any release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment. De minimis conditions are not recognized environmental conditions. Controlled substances are not included within the scope of this standard. Although the Environmental Professional may, at his/her discretion or by mutual agreement with the user, address some of the following issues while conducting the ESA, the following items are some of the issues that are not included within the scope of a Phase I ESA: asbestos-containing materials, radon, lead-based paint, lead in drinking water, wetlands, regulatory compliance, Endangered Species Act, indoor air quality and mold.
Further, a Phase I ESA satisfies one of the requirements to permit a user to qualify for the innocent landowner, contiguous property owner, or bona fide prospective purchaser limitations (referred to as the landowner liability protections (LLP)) on CERCLA liability (ASTM 1527-13 1.1). To qualify as the LLP, one must have no knowledge, or reason to have knowledge of the contamination at the time of purchase. In the state of Maryland, a prospective purchaser who wishes to purchase a property with knowledge of contamination may apply to the Voluntary Cleanup Program for inculpable status. However, most Nutshell clients are not seeking protection from CERCLA liability, but are practicing due diligence prior to purchasing a commercial property and in most cases any discovery is worked out between the purchaser and the seller.
ASTM #1527-13 4.2 reads: This practice is designed to assist the user in developing information about the environmental condition of a property and as such has utility for a wide range of persons, including those who may have no actual or potential CERCLA liability and/or may not be seeking the LLPs.
To comply with the ASTM 1527 standard, a Phase I ESA must include the following four components:
- Regulatory records review;
- Site visit;
Learn about the phases of your environmental consultation.
Standards & Due Diligence
SBA SOP 50 10 6: Lender and Development Company Loan Programs
40 CFR Part 312: Standards and Practices for All Appropriate Inquiries; Final Rule
E1527-21: Environmental Site Assessments: Phase I Environmental Site Assessment Process
E1528-14: Standard Practice for Limited Environmental Due Diligence: Transaction Screen Process
E1903-19: Environmental Site Assessments: Phase II Environmental Site Assessment Process
E2247-16: Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property