Phase I & II Environmental Site Assessments
Contact
ESA ESA Phase One
Wide-angle photograph of a commercial real estate property with an environmental professional reviewing site documents on a clipboard, warm golden-hour light casting long shadows across the paved lot

Environmental Due Diligence

Guidance and resources for conducting environmental due diligence during commercial real estate transactions.

Why Due Diligence Matters

Environmental due diligence is a critical step in commercial real estate transactions. A Phase I Environmental Site Assessment (ESA) helps buyers, lenders, and investors identify potential contamination risks before committing to a property purchase. Conducting proper due diligence can protect parties from liability under CERCLA and support the innocent landowner defense.

All Appropriate Inquiries (AAI)

AAI is the process of evaluating a property's environmental conditions prior to acquisition. Completing a Phase I ESA consistent with ASTM 1527 standard practices satisfies the AAI requirement and is essential for establishing legal protections.

Brownfield Sites

The EPA defines a brownfield site as real property where expansion, redevelopment, or reuse may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Understanding brownfield classifications is key to assessing redevelopment risk and accessing available cleanup grants and programs.

Risk Management Strategies

  • Phase I ESA: Historical records review, site reconnaissance, and interviews to identify recognized environmental conditions (RECs).
  • Phase II ESA: Intrusive sampling and laboratory analysis when a Phase I identifies potential contamination.
  • Regulatory review: Checking state DEQ records, permits, and enforcement actions tied to the property.
  • Remediation cost estimates: Factoring cleanup obligations into transaction negotiations.

Key Standards

The ASTM 1527 Standard Practice for Phase I Environmental Site Assessments is the industry benchmark. It outlines the scope of work for identifying RECs, including historical usage research, regulatory database searches, and visual inspection protocols. Staying current with ASTM updates ensures assessments meet lender and regulatory expectations.