If you’re planning to buy a property that has previously been used for commercial purposes, you may be hearing about Phase 1 Environmental Assessments. What is a Phase I Environmental Site Assessment? It’s a valuable tool that can help you to understand and identify potential contamination that might exist on the property.
What Is a Phase 1 Environmental Assessment?
A Phase 1 Environmental Assessment is an assessment on a property (downtown lofts, for example) that has previously been or is currently being used as a commercial property. The assessment is intended to determine whether the property may be contaminated from its use. A Phase 1 Environmental Assessment is designed to identify common significant issues like soil contamination, water quality, mold, lead-based paint, and the presence of asbestos in the buildings.
The assessment is rather involved and is often conducted by environmental scientists. It can take some time to complete and compile the results, so an assessment is not a last-minute action. A Phase 1 Environmental Assessment helps to paint a more detailed and accurate picture of the conditions – hazardous or not – in a commercial property.
What Is Included In a Phase 1 Environmental Assessment?
A Phase 1 Environmental Assessment is a detailed assessment of a commercial property. Generally the assessment consists of an on-site review to assess the property’s current condition. The assessor may interview the past owner of the property, neighbors, and the property manager to gain additional information about potential contaminants and hazards. This information will be compared with any records available on the property, such as those filed by the local health department.
If a Phase 1 Environmental Assessment identifies that the site is contaminated, then a Phase 2 assessment, in which the site is tested for contaminants, may be necessary.
When Is a Phase 1 Environmental Assessment Necessary?
There are a number of circumstances that may necessitate a Phase 1 Environmental Assessment, but an assessment is most commonly instituted when a commercial property is to be purchased by a new party. In some cases, an assessment may be called for when the business’s ownership changes hands, a new lender assumes an existing loan on a property, or when the property’s owner wants to better understand the property’s history.
What is a Phase 1 Environmental Assessment? It’s a necessary step when commercial property is purchased or sold, and it can leave buyers better informed about the situation they are entering by buying a particular property.