A Phase 2 Environmental Site Assessment (ESA) is a process mandated by the US government to test commercial land and improvements for environmental contamination. It helps establish accountability for buyers and determine cleaning costs. The process involves investigative and testing phases, and the American Society for Testing and Materials (ASTM) sets the standards. The buyer receives a written report that establishes the type and level of contamination and provides advice on corrective actions.
A Phase 2 Environmental Site Assessment (ESA) is a process mandated by the United States government to test commercial land and improvements to determine the level of environmental contamination. It is conducted after a phase 1 ESA has determined that contamination likely exists. The appraisal process helps establish accountability for buyers looking to purchase the property and determine cleaning costs.
Environmental contamination of real estates occurs when hazardous chemicals or petroleum seep into the ground or hazardous materials are used in building improvements. This can happen when a property is too close to a manufacturing facility that dumps chemicals into the local river, for example. Building materials often contain contaminants as a result of changing industry standards that once approved the use of certain substances only to find that they are dangerous to humans over time, such as asbestos and lead paint.
The US government has established strict accountability standards for commercial real estate buyers, making any buyer responsible for remediating contaminated properties after the purchase is complete. This liability applies regardless of when the contamination occurred, who was responsible for the problem, or if the buyer was aware of the problem prior to completing the sale. The only exception is if the buyer can prove that they have conducted a diligent investigation of the property to determine contamination. If his due diligence hasn’t raised any red flags, he’s considered an “innocent buyer” and isn’t responsible for the cleanup.
Buyers satisfy due diligence requirements by ordering an SEC on the property. An ESA has three phases. The first stage is investigative. Search the history of the property and the surrounding area for signs of environmental impact, such as proximity of manufacturing facilities, historic historical accidents, and common uses of building materials for the age of the property. If the investigation reveals any problems, a phase 2 environmental site assessment is ordered.
A Phase 2 environmental site assessment is the testing phase. The experimenter takes samples of soil, groundwater, and surface water and tests them for petroleum, heavy metals, pesticides, and solvents. It also takes samples of the building materials used for improvements and tests indoor air quality. The process looks for lead paint, radon, mercury, asbestos, mold and mildew.
The American Society for Testing and Materials (ASTM) sets the standards for a Phase 2 environmental site assessment. A consultant is hired to conduct the survey and provides the buyer with a written report. Typically, the report establishes the type of contamination involved and the level of exposure, as well as providing professional advice on corrective actions that should be taken to clean up the property. This is an indispensable part of the process for a buyer and allows him to determine the costs associated with government remediation if he decides to go ahead with the sale.
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