Phase 1 Environmental Report
What is a Phase 1 Environmental Study?
What exactly are they? Can they be done in place of a regular real Estate inspection?
In simple terms a Phase 1 is a site visit and document review of the surrounding area to determine if further investigation is advised from an environmental standpoint.
A Phase 1 inspection includes a review of local governmental documents regarding the site to determine what the past usage of the site was as well as extensive document review of the surrounding area. It also entails a very involved and detailed site visit by a qualified professional. In addition there is data base information that is gathered and reviewed of the surrounding vicinity to determine if there is a potential risk from an environmental standpoint in the immediate area. Examples of potential risks are a past gas station on or near the site that might have contaminated the ground water or a previous dry cleaner on the site that might have spilled chemicals into the ground. There could have been past dumping on the site or an auto repair that did not handle the oils properly, lead in the paint, asbestos, etc.
The focus of a Phase 1 inspection is environmental and not of the structure or any of the systems of the actual building(s). The structure and systems are the focus of the general visual inspection. They are two separate areas of responsibility and occasionally both are necessary.
Some commercial and industrial real estate transactions require a Phase 1 inspection depending on the amount of the loan, the location and age of the building.
Depending on what is found during the Phase 1 inspection and research, a Phase 2 and/or Phase 3 may be indicated. As you might assume Phase 2 and Phase 3 are the more involved aspects in the environmental field. Phase 2 involves testing of the site such as coring into the earth and taking samples of the soil and testing it to determine what is in the soil. The information gathered during a Phase 2 will determine if the site warrants further investigation and/or needs to be remediated. If remediation is indicated that is Phase 3.
In comparison, a good, thorough general visual inspection discovers and lists out the true condition of the structure(s) and site as well as provides solutions to any issues that arise.
As I have previously stated, a real estate inspection is done by a trained professional inspector who looks at the entire site while paying particular attention to the Plumbing, Electrical, Heating and AC, the Structure and Roofing as well as immediate drainage issues. The inspector should also look for material defects (meaning of significant importance or great consequence to the property) and safety issues. It’s also a good idea from a buyer’s perspective to ask the inspector to estimate the remaining expected useful life of the systems per industry standards.
A good, thorough general visual inspection is the only way to be certain of the exact condition of the property and the costs to cure. This is what you and your broker need in order to make a sound decision.
These two inspections are not interchangeable. If we discover evidence that a Phase 1 environmental study is needed we will certainly include that in our recommendations.
Call us TODAY and book your next inspection!
Bob Pace
Certified CREIA Inspector
General Contractor #461030
Commercial Real Estate Inspectors
800-931-2734
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