What happens if I don’t get a Phase 1 ESA?

If you don’t get a Phase I environmental assessment before purchasing a property, there are a few key risks:

  1. You may unknowingly buy contaminated property. Without an assessment, you likely won’t know if past land uses like industry, gas stations, dry cleaners etc. have contaminated the site with hazardous substances.
  2. You may lose the ability to use the innocent landowner defense under CERCLA if contamination is later discovered. Without conducting “all appropriate inquiry” including a Phase 1 assessment first, you likely wouldn’t qualify for the innocent landowner defense to avoid cleanup liability.
  3. You could become liable for very costly environmental cleanup. Under CERCLA, current landowners can be held responsible for cleaning up pollution on their sites, even if the contamination occurred decades ago by previous owners. The costs can reach hundreds of thousands or millions of dollars in some cases.
  4. Contamination could impact development plans for the site. If undetected pollution is severe enough, it may be impossible to build on areas of the property without first conducting a cleanup.
  5. You may have difficulty selling the property in the future if buyers discover contamination. Pollution issues must be disclosed, which can severely impact property value, financeability, and overall marketability until cleaned up.

In summary, skipping a Phase I assessment opens you up to massive potential legal, financial, health, and planning risks from pre-existing contamination that could remain hidden on site. Conducting a Phase I is crucial due diligence.

Nicholas Moran

Nicholas Moran

Nicholas Moran grew up in sunny south Florida and lives in Boca Raton. He studied geologist and is a licensed professional geologist. He helps environmental and engineering companies implement software solutions to improve their efficiency and effectiveness and is Senior Geologist at MORAN ROCKS LLC, a boutique environmental consulting firm that uses the latest technology and workflow solutions to deliver personalized service at competitive prices.