Learn why you can't use an old Phase I Environmental Site Assessment.
We've got a phone call last week from a guy, he was somewhat confused about Phase I Environmental Site Assessments, and had a pretty simple question: "I have a Phase I ESA from two years ago that the seller provided. I can just use this one, right?"
Simply put, relying on an old Phase I is like relying on a report from your mechanic from 3 years ago. It doesn't make sense, isn't a good practice, and obviously, things can (and probably have) changed signfigantly.
A Phase I Environmental Site Assessment is not just a checkbox to be marked off when you're dealing with property transactions, refinancing, or something similar. Using a report from someone you didn't hire, or using an old one, or using a cheap Phase I Environmental Site Assessment are all terrible ideas, and you'll regret (or end up paying for it on way or the other) as time goes on.
You can't rely on an old Phase I Environmental Site Assessment
Here's the reasons I explained to the fellow on the phone that you can't rely on a Phase I ESA from someone else.
- It's too old. The standards by which a Phase I should be conducted (ASTM E1527-13) indicate that the shelf life of a Phase I is one year. Older than that, and it won't provide the protections which are one of the most important reasons you’d do one in the first place. These reports are not good forever. If it's over a year old, you need a new one.
- Things can change rapidly. Things could happen at your site since a prior investigation was conducted. The report someone gave you is partly a snapshot of conditions at the time it was prepared, and may not reflect things that have occurred on the property since that time. Things that might have a real bearing on the condition of the property you are about to buy, such as releases to the environment and contamination. You want your Phase I as current as possible.
- They're done different, according to updated standards. The standards for Phase I ESAs have changed. The prior version of the report you were given might not reflect today’s requirements. In fact, I almost guarantee it doesn’t. You might run the risk of it not being accepted by another party due to failing to meet requirements.
- Why was it done in the first place? If it was prepared for someone else, they might not be concerned about the same things you are. Sure, Phase I standards should produce somewhat consistent reports regardless of who they are being produced for, but it’s far better off having a new report that was produced for only you, with your interests and specific requirements in mind.
- Who did the investigations & report? You have no control over the quality of the work produced in the prior report. In fact, you'll probably have no knowledge of the prior preparer or their company. Are they even still in business (we unfortunately see this all too often). Were they experienced? Were they following the required standards in place at that time? Did they meet the qualifications for an environmental professional? Even worse, were they the cheapest outfit that the other guy could find to do the work? Remember, you get what you pay for…
Using an old Phase I ESA is a bad practice.
A prior Phase I Environmental Site Assessment might not help you if you later find contamination on the property or some other form of release to the environment. If you didn’t follow proper procedures, you can’t rely on a Phase I to claim you that you did your due diligence. You'll be be facing loss of property value, potential fines and penalties due to environmental contamination, and fees associated with cleaning up your mess. Yes, that's right. If your Phase I wasn't done up to current standards at the time, and contamination is found, it becomes your problem.
So do yourself a favor. Don’t rely on that old Phase I ESA. Get a copy of it, provide it to your new consultant as relevant background information, but don’t rely on it as your sole source of information. You have too much riding on it, financially and otherwise, to make that mistake. If you're shaky on understanding what the difference in an old vs. new Phase I Environmental Site Assessment means, click here to contact us, or give us a call at 609-693-8301 to learn how we can help.
