When purchasing commercial property or raw land, it’s important to consider the presence of potential contaminants at the site. But, there are different phases to ESAs – each more involved and expensive. How far do you have to go & when is it in your best interest not to move forward with buying the property.

A Phase One ESA or Environmental Site Assessment is recommended whenever purchasing a commercial property, or even raw land in some cases. A Phase One is conducted by doing a historical review of the property and speaking with the current owners and relevant personnel to see if there are any contaminants on the property. Now, Phase One is generally going to run you anywhere from three to five thousand dollars and can take three to six weeks on average. It’s very important though, a Phase One has to be conducted by a professional engineer and make sure that they sign the report when they give it to you. If they don’t sign the report, it could be deemed as invalid. Now, hopefully, the Phase One comes back negative with no known RECs. REC stands for recognized environmental conditions. If there are recognized environmental conditions potentially on the property, then you would need to move to a Phase Two.

Phase Two consists of collecting soil samples and testing those in a lab to see if there are any contaminants in the soil. Phase twos are a little bit more pricey starting at ten thousand dollars and up and they can take an additional four to six weeks. Now, hopefully, those soil samples come back negative. But, in the event that they do come back positive, at this point this is where you’re gonna need to ask yourself if it’s worth it to continue with the Phase three or, unfortunately, not move forward with the purchase of that property.

Now, Phase Three’s are actual mitigation of the soil and these can be extremely time time consuming and very expensive and in many cases they always cost more than you expect and take much longer than expected. So, as I’ve said in many videos, always consult with specialists, with consultants, with engineers. From our experience, generally, Phase threes just simply aren’t worth it and it’s not worth to move forward with it and purchase the property at that point.

Feel free to reach out to us with questions or other topics you’d like to see covered.

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