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A Phase 1 Environmental Site Assessment is recommended anytime a commercial or industrial property needs to be developed, bought, or sold. This assessment is mainly conducted to examine the potential contaminations and its effects on the subject property. If the contamination exists, the process of reduction and elimination is carried out by gathering any and all information, historical or scientific. To some clients, an ESA may seem like a burden because it was mentioned as a condition of financing the project by the lender.

However, there are five reasons why an Environmental Site Assessment (ESA) is an impactful addition to your project:

•The Lender’s Safety:

When the Client is looking to purchase a commercial property, or even a piece of land for commercial/industrial development, the bank requires an ESA to be conducted before the loan is approved. This is the case with most commercial lenders in Canada and the USA. A phase 1 site assessment is considered a necessity because they are protecting their investment. In the case that the borrower does not have the funds to pay their debt and a loan default or foreclosure occurs, the bank is ensured that the subject property has no liabilities coming with it. The ESA gives a sense of security and a level of certainty that the property does not pose any environmental risks.

Also Read: Top 5 Benefits of ESA Remediation

•The Buyer’s Safety:

A phase one environmental is usually considered during some commercial property transactions. Therefore, as a buyer, it is essential to know what kind of property it is that you are purchasing. An ESA Phase I is a cheap way of ensuring you are aware of all the problems that come with the subject property. Phase I Environmental Site Assessments are the first steps to discovering if the subject property poses any potential contamination and risks that can affect the value of the land or building in question or if any further research/testing will be required. Ideally, no one wants to invest their money into a property that has a short future or will cause problems. Hence, the recommended phase1 environmental assessment is not only a safeguard for the lender but also for the borrower who is buying the property.

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•The Environment’s Safety:

ESA’s also make sure that the project you’re carrying out isn’t a threat to the environment around you or a threat to any of the people involved with the project. A level I environmental assessment can also examine the effects of the property on the environment. Environmental liability includes factors such as agriculture, marine life, use of land, air quality, and the health or wellbeing of the people. An ESA report is created after all historical and scientific factors are considered. It outlines whether the property poses a threat to the environment and how to reduce or mitigate the risks. The report will recommend future actions that the Client will need to take in the case that potential contamination exists. It is a safety measure undertaken to reduce all risks. Although a Phase I ESA can reduce the risk, it is essential to remember that it does not eliminate it.

Also Read: A Phase 1 Environmental Site Assessment Cost Estimator

•The People’s and Project’s Safety:

In the rare case that the Client chooses not to conduct Phase I and is allowed to pursue developing the property, all liabilities that arise with the property regardless of the timeline will be the Client’s burden. Without conducting an ESA, the Client will have no protection against future liabilities. Suppose during the process of
development, a tank leak occurs, and there is substantial damage to the soil. First of all, all construction will come to a halt as it is a threat to the onsite personnel. This affects the project’s timeline and will push the deadline for completion. Secondly, all costs associated with fixtures will be the Clients responsibility even if the leak existed before the purchase of the property. Then the Client will be obligated to fix the problem even if they didn’t cause it, and their respective lenders will cease the release of funds. Lastly, in the unfortunate case that the leak creates an explosion, and there are fatalities or injuries related to the incident, the Client will be held responsible. Therefore, an ESA is a small price to pay for someone’s life.

•The Financial Safety:

An ESA is the best insurance the Client can pay for as compared to the cost of remediating. Usually, Phase I’s are a couple of thousand dollars. Whereas the cost of remediation is hundreds or thousands of times more than the Phase I. Not to forget the legal fees that would come along in case the Client is being sued. Environmental liability is severe and cannot be taken lightly. The lack thereof can have severe repercussions. Although an ESA cannot eliminate all risks, it can be managed by a professional from trusted Engineering Consulting firms. An ESA can save the Client millions of dollars. It is the easiest way to reduce risks and saves a lot of trouble, so why not get it?

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Pinaaz Rahman

Project Coordinator-Environmentalist at prycoglobal
Pinaaz is a Chemical Engineering graduate who has years of experience conducting Environmental Site Assessments. She studied at University of Alberta and brings a fresh perspective on projects. Pinaaz has an impressive background in process analysis/design and is our lead Environmentalist.
Pinaaz Rahman