Most people wonder, “if all Phase 1 Environmental Site Assessment Providers reports follow similar ASTM standards, why is there a huge variety of costs for those services?” Well, it’s obviously understandable that you don’t want to pay more for a Phase 1 ESA than you have to, but it does not make all reports equal. When selecting an environmental expert to perform a Phase I Environmental Site Assessment (ESA), it’s essential to pick the best one. Selecting an environmental consultant based on cost or convenience alone could be the most costly part of your real estate acquisition.
Minimum Expected Qualifications of a Phase I ESA Provider
According to the AAI criteria, the EPA set up minimum qualification standards for environmental experts who prepare Phase I ESAs.
You must be wondering what exactly an environmental professional means? Well, an environmental professional is recognized as a person who has enough experience, education, and training required to exercise professional judgment to bring out opinions and conclusions concerning the presence of releases and threatened releases to the surface or subsurface of a property. The definition involves persons who:
- Has a professional engineer or professional geologist’s license or registration with three years of full-time relevant practical experience.
- Holds a baccalaureate degree or higher from an authorized institution of higher education in a compatible discipline of environmental science, engineering or earth science along with five years of full-time related experience.
- Are certified by a tribe, state, or the federal government to carry out all appropriate inquiries along with having three years of full-time, hands-on experience.
- Hold 10 or more years of full-time relevant experience in the industry.
Minimum Qualifications a Phase I ESA Provider Must Have
Suppose an appropriate AAI is conducted (ASTM Phase I ESA), and the investigation fails to disclose evidence of prior contamination. In that case, the new property owner can attain the innocent landowner provision of the AAI rule. Although, if the AAI procedure was performed incorrectly, the buyer would not be eligible for the ‘innocent landowner defense’ and thus, could be responsible for pre-existing contamination.
However, if they detect contamination during the AAI procedure, the buyer or seller will have to report and potentially remediate the property to go through sale. In most circumstances, the revelation of contamination leads the deal to collapse and usually presents opportunities for the buyer. Knowing the significance of offering appropriate due diligence for anticipated buyers and their lenders, we suggest the following additional qualification for Phase 1 environmental site assessment professionals and will explain how you can identify these traits:
- Experience with the current ASTM standard
- Remediation experience
- Responsiveness
- Professional Liability Insurance
- Experience with similar properties
Experience with the current ASTM standard
ASTM International is basically a not-for-profit organization that offers a forum for the growth and publication of international voluntary consensus standards for products, systems, materials, and services. Started on December 30, 2013, the EPA has stated a rule formally identifying the ASTM E1527-13 Phase I Environmental Site Assessment Standard as meeting the conditions of AAI under CERCLA. Moreover, ASTM E1527-13 is considered the new industry standard for offering prospective buyers a way to secure CERCLA liability protections.
- Remediation experience
Most environmental experts with remediation experience can offer buyers and lenders an estimate of possible assessment and remediation expenses. Moreover, incredible purchase negotiation opportunities can be comprehended when the purchaser has cleanup cost detail.
- Responsiveness
Generally, property transactions have a comparatively short time frame for due diligence. That’s why it’s vital to get a skilled, adaptable environmental expert who can efficiently generate a quality ESA within the due diligence time period.
- Professional Liability Insurance
It only makes sense that the environmental organization you trust to direct an environmental site assessment has professional liability insurance.
- Experience with similar properties
Environmental experts familiar with the historical uses of a property may also know industrial methods and storage areas and will hence have a much better understanding of where to investigate for potential issues. If previous operations used underground tanks, an environmental expert experienced with underground tank cleanups would know to search for signs like old tank vents, old fill ports, monitoring wells, etc.
Choosing the Right Company to Offer Your Phase I ESA
The expertise of your phase 1 ESA provider is an essential part of the due diligence procedure when buying commercial property. CERCLA liability defenses are quite valuable, mainly since a buyer or lessee of contaminated property can be responsible for environmental cleanup costs even if the leak, release, or spill happened decades ago without regard to fault or negligence. Moreover, prospective purchases must also assess whether their environmental professional should investigate risk outside of the scope of the AAI rule. That’s why the selection of a reliable Phase 1 ESA provider is vital to a successful transaction.
