The Role of Phase I Environmental Site Assessments in Real Estate Transactions
You should perform your due diligence with any real estate transaction. For commercial properties, an Orlando Phase I environmental site assessment is crucial to your business’s financial and regulatory well-being. Here’s why.
When you purchase a home, an inspector evaluates the property to determine if it needs repairs or maintenance. An inspection report gives the buyer peace of mind that the house they’re buying is in good condition and can significantly impact the sale price. Foundation work, a new roof, or an electrical system come with hefty price tags. Building those costs into the home’s value and the sale price is crucial.
On a much larger scale, when a real estate transaction involves a commercial property, the buyer must perform their due diligence to determine the regulatory compliance and condition of the property. Our team of experts can handle your Orlando Phase I environmental site assessment, so there are no hidden surprises.
An Environmental Site Assessment (ESA) is a crucial first step to minimize risks in real estate transactions. Our expert team specializes in thorough and meticulous site assessments, identifying environmental contaminants that could impact your property’s value. Our emphasis on detail and precision guarantees that your investment is protected from financial and physical environmental concerns.
We begin with a Phase I environmental site assessment or Phase I ESA. During a commercial real estate transaction, a Phase I ESA evaluates both current and past activities on a property. The main objective is to assess whether these activities adversely affected the soil or groundwater beneath the property, posing potential environmental and human health risks. Identifying such environmental issues can substantially influence the property’s value and may result in liabilities for both the lender and the owner.
Our Orlando Phase I Environmental Site Assessment Process
Our specialized Phase I ESA services are tailored to meet the unique needs of our clients across Florida and the Southeast, ensuring environmental due diligence. A Phase I ESA includes:
Step #1: Records Review
We carefully check public records to find any past environmental issues related to the property. Our detailed review includes:
Researching past land use
Checking for possible sources of contamination
Examining any previous regulatory actions or permits for the site
This thorough process helps us understand the property’s environmental history, making informed decisions during real estate transactions easier.
Step #2: Site Reconnaissance
Our Orlando Phase I environmental site assessment experts visit the property to look for any signs of environmental issues. We carefully check the site, examining the soil, water sources, and overall condition. This detailed inspection helps us understand the property’s environmental health, providing vital information for assessments.
Step #3: Interviews
We talk to current and past owners, operators, occupants, and local government officials to get direct information about the property. Engaging in these conversations helps us learn more about the history and current state of the property from those involved with it.
Step #4: Report Compilation
We gather all the assessment information and create a detailed written report. Your ESA report outlines any recognized environmental conditions (RECs) and potential concerns we found during our investigations. Having all of this information in one document helps in understanding the environmental aspects of the property, making it easier for everyone involved to grasp and address any issues.
Why Is A Phase I ESA Important?
Completing a Phase I ESA before the close of escrow provides legal protection for the buyer. If an environmental issue arises after the property transaction is finalized, the buyer (or their lender) is shielded from liability under the law.
Essentially, a Phase I ESA safeguards the new property owner from being held responsible for any environmental problems that emerge after the property has been transferred.
If a transaction is completed without a Phase I ESA, the new owner takes full responsibility for the property, including addressing any environmental issues that may arise during or after the transfer.
Frequently Asked Questions About Orlando Phase I Environmental Site Assessments
Q: How long does a Phase I Environmental Site Assessment take? A: Most Phase I ESAs can be completed within 10 to 15 business days, depending on the property’s size, complexity, and how quickly historical records and interviews can be obtained. Large or multi-parcel sites may take longer.
Q: Is a Phase I ESA the same as an environmental inspection? A: Not exactly. A Phase I ESA is a structured, regulated process under ASTM standards, whereas a general environmental inspection may not follow those protocols. A Phase I ESA is specifically designed to assess for potential contamination and establish legal protections for the buyer.
Q: Does a Phase I ESA expire? A: Yes. Lenders and regulatory agencies typically consider a Phase I ESA valid for 180 days from the report date. After that, it may need to be updated or redone, especially if site conditions or regulations have changed.
Q: Can I use an old Phase I ESA from a previous deal? A: Only if it’s less than 180 days old and still relevant to your transaction. However, you’ll want to verify that the scope, property boundaries, and conclusions still apply. CES can review and update existing reports when appropriate.
Q: What happens if a Phase I ESA finds a problem? A: If recognized environmental conditions (RECs) are identified, the next step is typically a Phase II ESA, which involves collecting soil, groundwater, or vapor samples to confirm whether contamination is present and whether remediation is needed.
Let Us Handle Your Orlando Phase I Environmental Site Assessment
