How is it done?
A Phase I ESA includes a detailed visual survey of the property, a general visual survey of the immediate neighborhood, an interview with the current site manager (usually the owner), research of available records to determine the past uses of the property, and a review of EPA files on hazardous materials issues in the area of the property. The Phase I ESA does not include field sampling or analysis, but may recommend these measures where appropriate.
Why is it done?
The primary purpose is simple: to limit the purchaser's legal liability for the cost of hazardous substance clean-up and containment in connection with the property. To
do this, the purchaser must show that "all appropriate inquiry into the previous ownership and uses of the property" was undertaken at the time of acquisition. The Phase I ESA is also used to advise the purchaser of known or reasonably suspected environmental problems connected with the property.
"All appropriate inquiry"? What does that mean?
The law was made purposefully general, leaving it up to the real-estate industry to determine the level of inquiry appropriate for property transfers. Over the last few years a standard practice has been established, more or less by consensus. In 1993 the ASTM published a standard for the conduct of a Phase I ESA, which it updated in 1994. This standard is generally regarded in the industry as meeting the requirement for "all appropriate inquiry."
Does every property need a Phase I ESA?
This is a judgment call that must be made by the purchaser, and by the lender. Obviously, not every property needs the same level of inquiry; a property in a long-established, residential neighborhood will rarely require the investigation appropriate to a property in a heavily industrialized setting. However, every property should have some level of formal assessment.
How long does it take?
About two weeks, depending on the size and condition of the property. However, ASTM requires that any relevant information that can be made available within 20 days of request be included in the assessment. Most information can be retrieved more quickly than this; still, it is wise to allow at least three weeks for the conduct of the assessment.