Phase I ESA Frequently Asked Questions

A Phase I Environmental Site Assessment (ESA) is prepared following  ASTM E1527-21.

Question:  If a phase one was done years ago and it was cleared, I want to sell the property now, do I have to do another one?

Answer:  A phase I generally speaking is good up to the date of completion.  As time progresses site conditions can and do change, meaning an event or events may have occurred from the date of Phase I completion to the present day that the prior Phase I would not document.   It is these data gaps that prior reports can miss.   Additionally, the ASTM standard that a Phase I Environmental Site Assessment (ESA) follows has changed over time so the Phase I may not be current to todays standard which currently is ASTM E1527-21

Question: I have a copy of a Phase I completed by a potential buyer of a property I want to buy.  Can I rely on the Phase I?  It is several years old?

Answer:  The Phase I is owned by the party contracting and paying for the Phase I.   Sometimes a reliance letter can be obtained from the company performing the Phase I that another party (typically a Bank gets a Phase I reliance letter) can rely on the Phase I.    If the Phase one is older, please refer to the question immediately above regarding the need for an updated Phase I.  

I am getting different prices to complete a Phase I, why are some companies more expensive or they doing it different?

All Phase I's follow a protocol ASTM E1527-21, which outlines how a Phase I is performed.  The 21, indicates the year when the protocol was last revised. So, on a level playing field everyone should follow the same recipe.  Your differentiation is WHO is performing the Phase I.   Veteran or more experienced environmental professionals will typically provide a better product based on their foundation of performing many Phase I's over the years, which can account for price differentials. 

In addition every Phase I (research) ca turn into a Phase II (testing) which many consultants want to have the Phase II work which is more expensive than the Phase I.  For example a Phase I may turn into a $12,000 Phase II, so some companies give an enticing price for a Phase I to get the Phase II.

At Curren we do all Phase I, II & II (remediation) work in house, our personnel and out equipment, most firms subcontract this work, and client suffer the markups.

The Phase I was reasonable, but it found issues that need to be investigated.  The cost for the Phase II is thousands of dollars, why?

Well depending on what the Phase I found, i.e., what issues would require investigation (more issues, more cost) dictates the cost.  Additionally, many firms that perform Phase I's are staffed by white collar professionals who outsource part of the Phase II cost such as drilling, GPR (Ground Penetrating Radar).  These subcontractor markups add to a Phase II cost.  Additionally, many firms view Phase I's as a loss leader and expect to make up profit margins on the Phase II.

The property is low risk i.e., residential, car wash, store or vacant so I don't think an environmental audit is needed?

We have found residential properties that were once commercial and had environmental problems.  Unless you are an experienced environmental professional you are not qualified to render an opinion.  We have found current property uses are not the same as past uses.   Car washes and stores have been found to had been gasoline stations. An environmental professional would only lend an opinion after a Phase I is completed.

The owner of the property didn’t perform a Phase I, so why should I?

Because you shouldn’t make the same mistake as the previous buyer.  What happens when you sell and the new buyer has a Phase I and finds a problem that predates your ownership, but you are responsible to cleanup?  Besides complain, you will pay for to fix the problem or take a significantly lower asking price for the site.

The number one compliant we hear about a Phase I is from a seller saying they wished they performed a Phase I before they bought the property.  This is typically said when the buyer has a phase I completed and find a problem the property owner didn’t know existed.

Who pays for the Phase I?

Typically, the buyer, but sometimes the seller and buyer will split the cost.   In this arrangement, if the buyer backs out, the seller still retains the rights to use the Phase I for another buyer.

I am selling my property, the buyer did a Phase I.   Issues were found and they backed out of the sale.  The buyer will not give me a copy of the Phase I, am I entitled to a copy since I am the owner?

If you did not pay for the Phase I, you do not own the report.  Many people who pay for a Phase I and do not buy the property tend not to want to share the Phase I with the owner.

I am selling my property, should I do a Phase I?

Aside from the outlay for the cost of the Phase I, there is little downside to the owner performing a Phase I and the upside is very large.  When an owner performs a Phase I, they have the opportunity to address any environmental issue BEFORE a buyer is found.  Some people also use a Phase I as a marketing piece for the property.

Phase I Questions?

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