Phase I Environmental Site Assessment Checklist

A Phase I ESA can be triggered by a variety of circumstances, including seeking a loan from a bank or lender in order to purchase a commercial property, satisfying requirements of the “innocent landowner defense”, or as liability against responsibility for a cleanup project.

No matter the reason, if you are buying commercial property, conducting a Phase I Environmental Site Assessment is a prudent business decision. AEI has compiled a useful checklist to make sure you cover all your bases.

Phase I ESA Checklist Overview

What is a Phase I ESA?

A Phase I Environmental Site Assessment, or Phase I ESA, consists of a detailed report that researches and assesses the current and historical environmental uses of a property during a commercial real estate transaction. As an integral part of the environmental due diligence and decision-making process, it is ordered by stakeholders to mitigate risk regarding potential or existing environmental contamination at, or affecting, a property.

Who Performs the Phase I ESA Checklist?

An environmental professional must conduct the assessment on the client or user’s behalf. AEI’s Phase I ESA meets the most current ASTM Standard and can be customized to meet your unique needs. Our team of experienced and reliable professionals provide high quality reports for any site location or asset type.

Using the checklist ensures that you comply with the CERCLA All Appropriate Inquiry (AAI) rule, the minimum requirements necessary to qualify for landowner liability protections (LLPs). It also documents your specialized knowledge and experience with the property, which can then be used by courts to determine liability.

Components of a Phase I ESA Checklist

A Phase I Environmental Site Assessment Checklist includes four main components with multiple pieces of information to be gathered for each one.

1. Records Review

A records review involves obtaining and reviewing records in an extensive background search of the property to assess its use and analyze past activities that could lead to contaminations. Records may include:

• Standard Federal, State, and Tribal Environmental Record Sources: This includes any past ESAs as well as site and municipal plans to determine locations with maximum potential of contamination such as hazardous waste sites, disposal sites and cleanup sites.
• Regulatory Agency File and Records Review: If the property or adjoining properties are identified on one or more standard environmental record sources, regulatory records associated with the property should be reviewed to determine if a concern exists.
• Land Titles: This includes a list of all previous business owners in the correct order, which gives the assessor a better understanding of past activities on the site.
• Maps and Geological Surveys: These physical setting sources provide information about the geologic, hydrogeologic, hydrologic, or topographic characteristics of the site.
• Historical Use: Identify the property’s previous uses through means such as aerial photographs, fire insurance maps, property tax files, recorded land title records, topographic maps, local street directories, building department records, zoning/land use records.

2. Site Visit

After reviewing records to better understand where to focus, a site visit is the next step. The objective of a site visit is to gather information that would indicate the likelihood of identifying recognized environmental conditions in connection with the property. This includes:

• Visual Inspection of Buildings’ Interior and Exterior: If a building exists on the property, both the interior and exterior are observed. 
• Current and Past Business Use: Determine the operations and use of the current property as well as look for effects from past property uses and disposal of hazardous materials. 
• Adjoining Properties: Make exterior visual observations of any adjoining properties and, if possible, inspect the interior with permission of the respective owner. 
• Hazardous Substances and Petroleum Products: List any hazardous materials and substances that both can and cannot be identified, detailing quantity, disposal methods and storage conditions
• Tanks and Storage Containers: Identify all tanks both currently in use or decommissioned, including both underground and above ground as well as the size, year built, contents and location.
• Stains and Drainage Systems: Make note of any stains located inside the property, such as on walls, ceilings or floors, as well as stains outside the property, such as in the parking lot.
• Bodies of Water and Vegetation: Examine any pits, ponds or lagoons for contamination and evaluate local vegetation for signs of environmental stress caused by contamination.

3. Interviews

Additional information is gained by conducting interviews with people who are connected to the property. This includes:

• Past and Present Owners and Operators of the Property: Individuals who are closely associated with the property should be able to provide important information about its uses and conditions.
• Key Site Manager: This is typically the property manager, chief physical plant supervisor, head of maintenance or owner. Any of these people will have good knowledge of the uses and physical characteristics of the property.
• Occupants: This includes anyone who is currently occupying the property or has occupied it in the past.
• State and/or Local Government and Agency Officials: Gather information from agencies such as the local fire department, state or local health agency, local agencies responsible for hazardous wastes, and local agencies responsible for building permits or groundwater permits.

4. Evaluation and Report

The final step to the Phase I Environmental Site Assessment Checklist is to deliver the findings and insights, along with any conclusions and recommendations that can be made from the information gathered. Information in the report should include:

• Description of Assessed Property: Describe the details of the property, including its location, size and owners.
• Client Relationship: The relationship between the client and assessor must be summarized during reporting.
• Scope of Services: Include a description of all the services that were performed in sufficient detail so that another party would be able to reconstruct the work.
• Summary of Information Gathered: All information that is discovered (including no findings) as well as insight gained from the records review, site visit, and interviews should be summarized in an organized format.
• Data gaps (if applicable): Identify and comment on significant data gaps that affect the ability of the assessor to identify any recognized environmental conditions. Include the sources of information that were consulted to address the data gaps.
• Findings, Conclusions and Recommendations: Summarize all findings and conclusions based on the information gathered and the professional opinion of the assessor. Then, make recommendations for next steps for the client.
• Supporting Documentation and References: All documents and references leading to the conclusion must be attached to the report in an appendix.
• Qualifications of Assessor and Signatures: The assessor must sign the original document to verify their conclusions are valid based on their appropriate qualifications.