By Breanne Cline, Environmental Scientist

You have finally mustered up the funds and courage to transition your side business into a full-time venture. You are confident that your new storefront will give you the clientele and the local presence you need to be successful. You found the perfect location in town. The ground-breaking and construction have just begun for your new building. What an exciting yet scary time in any entrepreneur’s life.

Then you get the call.

Your contractor just discovered an abandoned underground fuel storage tank on your property. To make things worse, the tank was never properly closed and has been slowly leaking fuel into the soil for years. The previous landowners never bothered to remove it, and now you are stuck with a potentially catastrophic situation that could crush your hopes for success. Because you did not perform the appropriate due diligence before purchasing the property, you are left with the financial responsibility of an expensive cleanup.

Sound like a nightmare? Well, it could be, but the good news is that this situation is avoidable with a little forethought and the completion of a Phase 1 Environmental Site Assessment (Phase 1 ESA).

What is a Phase 1 Environmental Assessment?

Performing a Phase 1 ESA is common practice to know whether a property will likely contain any environmental issues or “recognized environmental conditions.” Recognized environmental conditions include the presence, or likely presence, of hazardous materials or petroleum products due to a release or a probable future release. All Phase 1 environmental site assessments must meet the standard practices in the ASTM E1527. They are best conducted before property transfers legal ownership or know before you buy.

When You May Need a Phase 1 ESA

  • Commercial property transactions.
  • Commercial real estate transactions involving a bank loan.
  • Transactions involving industrial or commercial operations that used regulated hazardous materials (like lumber treatment, electroplating or dry cleaning).
  • Transactions of property located adjacent to industrial or commercial operations.
  • Transactions involving property used for oil or gas exploration.
  • Transactions involving property with known environmental liens.