A Phase I Environmental Site Assessment (ESA) is a critical tool to understanding and managing environmental risk associated with a real estate asset. But when do you need more than a Phase I ESA? For buyers who want to qualify for defenses to liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) , the answer is always. In order to qualify for such liability defenses, EPA requires property buyers to go beyond hiring a consultant to complete a Phase I ESA.
CERCLA and AAI
Under Federal laws the owner of a property can be responsible to cleanup a property even if they didn't cause contamination and did not own the property when the contamination occurred. It is possible to qualify for defenses to CERCLA liabilities, but only by carefully following the requirements established by EPA. A Phase I Environmental Site Assessment can be an important tool to protect buyers from the negative impacts to cash flow, value and use of real estate, and ability to sell or finance the property that can result when contamination is present, but it is not enough to allow buyers to claim defenses to liability under CERCLA.
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Bill Tryon
As Director of Strategic Development, Bill Tryon focuses on advancing key risk management initiatives from an environmental, engineering and construction risk standpoint. Bill has a long track record of innovation, and hopes to educate the industry on best practices to control risks, reduce costs and create a competitive advantage. Through The Science of Real Estate forum, Bill will provide regular updates from across the CRE risk management world.
