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Phase 1 ESA vs Phase 2 ESA (in Layman’s Terms)

phase 1 esa inspections vs phase 2 esa inspections

As environmental concerns grown, it is becoming more and more common that a commercial real estate transaction will require either a Phase 1 or 2 Environmental Site Assessment. You may be wondering what the differences are between Phase 1 and Phase 2 ESA, and you may have already found that the information around the subject matter is written in very technical language, typically for inspectors to use as guidelines, rather than breaking it down for the Layman.

To begin with the basics, you will never get a Phase 2 ESA without having a Phase 1 ESA first. The Phase 1 ESA includes evaluating the property by collecting historical and environmental documents about the property and surrounding area, talking to current or past occupants, and a physical site inspection.

When the Phase 1 assessment is complete, you will be given a report. This report will outline the outcomes of your assessment. If your property does not meet certain requirements, you’ll be given the information needed to correct the course and move forward with the sale of your property.

However, if your report shows that there is a Recognized Environmental Condition (REC), you will most likely have to move into Phase 2. What is included in Phase 2 ESA depends solely on the findings of Phase 1. This could be groundwater analysis, or installing monitoring wells, or indoor air sampling, mold sampling, asbestos sampling, lead sampling, etc. The need for any sampling or testing in Phase 2 Environmental Site Assessments is based purely on the findings of the Phase I. Therefore, just take a look at the outcomes of Phase I and you’ll get an idea of what types of tests would be done during Phase 2 ESA.

After your Phase 2 is complete, you’ll receive a report with the results and suggested changes to make the property compliant with environmental regulations.

Phase 1 ESA vs Phase 2 ESA Cost

You can get an idea of the range of costs, however it hugely depends on many factors. The average cost of a Phase 1 Environmental Site Assessment usually ranges between $1,500 and $6,000, however can be more. If it’s less, just be careful. Someone competing on cost may be cutting corners that will end up costing you more in the end. More than $6K – you may be overpaying! Be sure to ask for the specifics of the bid and cost breakdown to understand the reasoning behind the cost.

The cost for a Phase 2 ESA ranges depending on the site specifics. This could be anything from the types of analyses needed, drilling methods, access to the subsurface, groundwater testing, overhead constraints, etc. Due diligence on a Phase 2 ESA can range from $4,000 to $25,000. As you can see, the range is wide. In order for a professional to provide an accurate estimate, provide them with all the materials they ask for up front in order to avoid unwanted surprises (and costs) later down the road.

If you need a Phase 1 or 2 ESA, feel free to contact our professionals for a quote.