When you set your eyes on a piece of commercial or industrial property, you successfully had the initial research conducted on it, and a Phase I Environmental Site Assessment (ESA) was completed. Now you are wondering if you should proceed to Phase II.
Buyers and Sellers
A seller may choose to get Phase II testing if it is suspected that there may be a problem with contamination. The results of the test would enable the seller to know what needs to be done – if anything – to bring the land up to its prime value. It could also reveal the cost of cleaning up any contamination.
Phase II is needed at times because it can affect the value of the land. If there are contaminants present, it may devalue the land.
When to Get Phase II
The good news is that it is not always needed. You should get Phase II Environmental testing if possible contaminants were suspected or observed in the Phase I environmental site assessment. Phase II will perform physical testing on the property to determine if Recognized Environmental Condition (REC) are what they appear to be and how extensive the damage has become.
Types of Testing
The types of tests given in Phase II testing will depend on the nature of the suspected REC’s. Testing may involve collecting samples from:
- Soil
- Surface water
- Groundwater
- Soil vapor
- Air
- Tank testing
- Tank abandonment
- Tank Removal
- Ground penetrating radar
Various substances may also be tested. This will likely include testing for pesticides, solvents, heavy metals, mold, asbestos and petroleum hydrocarbons. The tests are not going to be all-inclusive but will be based on what was indicated as possible contaminants in the Phase I environmental site assessment.
Tests may also involve various tools to get the samples. They may include several types of drilling, well-monitoring, ground penetrating radar, monitoring stations and more.
The Scope of Testing
The idea behind a Phase II test is to discover whether or not REC’s are present and to what extent. In some cases, only minimal testing is required, often determined by the lender. Phase II testing will provide a general picture of the quality of the property – but there may still be some risk due to uncertainty. Reducing the doubt and risk requires more involved testing.