Are you in the market to buy commercial real estate in Chicago, but aren’t sure if the area you have in mind comes with environmental issues? If you want to keep your liabilities low, or if your bank requires an environmental report before financing a property, you may be required to get a Phase I or Phase II environmental site assessment.
If you’re not sure what a Phase I or Phase II ESA is, what it entails to get one, and why you might need it, read on.
In a Phase I environmental site assessment, environmental problems are identified before they can become serious problems and major liabilities. Discovering environmental issues after investing a considerable amount of money in the purchase of a real estate property can be devastating. A Phase I Environmental Site Assessment basically does a background check and a property inspection and verifies if a property is clear from any recognized environmental concerns.
However, there are situations where a Phase I Environmental Site Assessment may not be enough. For example, after a Phase I Environmental Site Assessment is conducted, there may be a chance that the results show some contamination is present. That’s when a Phase II Environmental Site Assessment may be required.
What Happens in a Phase II Environmental Site Assessment?
A Phase I Environmental Site Assessment covers a standard, well-ordered checklist of items. A Phase II ESA is conducted purely on the results of the Phase I ESA. So, for example, depending on the findings of the Phase I Environmental Site Assessment, a Phase II ESA could involve varied analysis and testing that may include soil analysis (above and below the surface), air and mold samples, groundwater testing, testing for lead, asbestos, and other contaminants.
Based on all the testing and analysis work involved, it goes without saying that a Phase II Environmental Site Assessment takes longer and also costs considerably more than a Phase I ESA. It takes time to take samples, test them, and monitor results. However, in order to truly determine whether there is any environmental contamination present, this process is unavoidable.
When you have a lot at stake in terms of the investment you’re planning to make, a Phase II Environmental Site Assessment is essential to get a really good handle on what you may be getting into.
Is a Phase II Environmental Site Necessary?
Not all Phase I ESAs will require further probing. But there are definitely times where it’s highly recommended that further work is done to mitigate risk. It really depends on the site itself, and the results of the Phase I Environmental Site Assessment.
There are two things that will often warrant a Phase II Environmental Site Assessment — first, the results of the Phase I Environmental Site Assessment and the recommendations made in it, and the level of risk that you, the investor of the property, are willing to accept and undertake.
In most cases, investors are willing to go the extra mile and make the added investment warranted by a Phase II Environmental Site Assessment. This is because, without a complete understanding of the environmental condition of a property, you could end up with a disastrous investment.
Looking for Soil Testing or a Soil Disposal Company in Chicago?
At Axis Response Group, we understand that this process can be a bit complicated. We’re here to assist you in making sense of it all by answering any pressing questions you may have about environmental due diligence, soil testing, and soil disposal in Chicago.