Real estate professionals rely on environmental site assessments (ESAs) for numerous reasons. ESA results help identify any possible contamination that needs to be cleaned up or managed according to regulatory requirements; furthermore, an ESA protects both owners and investors from liability issues associated with environmental hazards; ultimately a Phase 1 ESA serves as an essential step in any meaningful real estate transactions.
As it’s essential to keep in mind, a Phase I ESA can only reveal what is known about a property, previous use such as gas station, dry cleaner or scrap yard may have resulted in contamination on-site and may have spread off site and posed additional liabilities for its owner.
As such, lenders typically require a Phase 1 ESA prior to financing any real estate transaction – especially commercial properties – in order to assess any environmental risks that might be present and provide sufficient assessment of liability insurance coverage.
Why an Environmental Site Assessment Is Essential in Property Transactions
While it might be tempting to cut costs by forgoing this essential due diligence step, doing so could have serious repercussions. Skipping it exposes property buyers to potential contamination-related legal risks while cleanup efforts, regulatory fines or penalties and possible depreciation in value could become the responsibility of future property buyers.
Phase 1 ESAs can identify potentially hazardous substances that could adversely impact people working or living nearby, including employees, customers, residents of nearby buildings or neighborhoods, as well as residents themselves. Such contamination can result in liability lawsuits demanding financial compensation for damages and may tarnish reputations in the community at large.
As such, investing in a Phase I ESA is an economical and timesaving solution to expensive clean-up efforts, remediation efforts, legal fees and potential delays in real estate transactions. Furthermore, such an assessment gives peace of mind for real estate transactions of all sizes; making it imperative that businesses of all kinds invest in it.
Phase I Environmental Site Assessments are often completed by multiple parties during the real estate transaction process, including investors, developers, lenders, property managers and tenants. Process usually takes two to four weeks; timeframe can vary based on size and complexity of property. An ESA is necessary when purchasing, refinancing or redeveloping real estate – taking this necessary due diligence step can reduce liability and avoid costly cleanup bills in the future. Reach out to RSB Environmental today to discover more information or schedule a Phase 1 Environmental Site Assessment! Our professional testing and inspection services range from asbestos testing to mold inspection – don’t hesitate to get in touch if any questions arise! Our team is standing by to take your call; don’t be shy – reach out now!