ENVIRONMENTAL DUE DILIGENCE
EI has been providing due diligence services for almost 30 years for lenders, developers, borrowers, and investors. EI personnel have performed these services in all 50 states and abroad.
Phase I Environmental Site Assessments (ESAs)
EI utilizes a number of controls to ensure that Phase I’s are completed in a uniform and professional manner. Phase I’s are completed using the ASTM E 1527-13 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. Completed Phase I’s are then subjected to a series of reviews for thoroughness and accuracy. This quality control process is completed by a team of Report Managers. Our Report Managers have a significant amount of education and experience in areas that make them uniquely qualified to assess the potential for liability in real estate transactions.
As an alternative to a Phase I ESA, EI provides Desktop Reviews, which include a complete historical and regulatory review along with an interview of persons knowledgeable of the property. Such a product is requested when circumstances allow, which can include a low loan amount, a low risk property, or a refinance of existing debt. While a Desktop Review should not be used in place of a Phase I ESA, it can be a very useful tool in providing some level of due diligence on properties where no environmental assessment would otherwise be performed.
Database Reviews provide a regulatory review on properties and is also used as an alternative to a Phase I ESA. Such a product is requested when circumstances allow, which can include a low loan amount, a low risk property, a refinance of existing debt, or used to update the regulatory inquiry portion of an already existing Phase I. While a Database Reviews should not be used in place of a Phase I ESA, it can be a very useful tool in providing some level of due diligence.
This level of assessment is only typically used for properties that are not believed to have current or historic site uses that are likely to have impacted the subject property. The assessment includes a site inspection, a limited evaluation of the historical use of the subject property, and the review of an environmental database search. Completion of the Transaction Screen Process in accordance with the ASTM 1528-14 Standard Practice may allow the user to conclude that no further inquiry is needed to assess the environmental conditions of the property. This will allow the user to invoke the innocent landowner defense without performing a Phase I ESA. Although transaction screens are similar to a Phase I ESA, they involve a smaller scope of historical research at a lower cost. While a transaction screen should not be used in place of a Phase I ESA, it can be a very useful tool in providing environmental protection on properties where no environmental assessment would otherwise be performed.
Phase II Environmental Site Assessments
Should areas of concern be identified during a Phase I, EI is available to further investigate the concern through a Phase II Environmental Site Assessment. A Phase II evaluation typically includes sampling of soil, groundwater, surface waters, sub-slab soil gas/vapors and/or suspected hazardous materials on or off the subject property. Data from the sampling effort is compiled and evaluated to determine if contamination is present and in cases of more extensive studies, the extent of the contamination on a site.
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Phase Is are conducted per ASTM E 1527-13 and include several major components: a site reconnaissance, completion of a User Questionnaire, a regulatory database search, interviews with persons knowledgeable of the property, and a review of reasonably ascertainable and readily available historical sources to identify the use of the property back to 1940 or its first developed use, whichever is earlier. As such, the ASTM E 1527-13 Standard Practice provides specific guidance as to what must be addressed. However, there is no ASTM standard for Desktop Reviews (more commonly called Risk Search with Risk Assessments-RSRAs). Therefore, RSRAs differ from consultant to consultant and also do not provide protection on CERCLA.