Owners should protect assets from environmental woes.

Environmental issues cause unforeseen financial and physical costs. Significant problems may have been prevented and may have been less costly to remediate by following basic preventative measures, but do you really want to hear that!

Phase I Environmental Site Assessments (Phase I ESA) are recommended for all commercial real-estate transactions, including the sale of property, re-mortgaging of real estate, and lease termination protection. The intent of the Phase I is to identify any potential Recognized Environmental Conditions (REC) associated with the subject property at a given time.

The criteria by which Phase I Environmental Site Assessments are performed has been established by the American Society for Testing and Materials (ASTM) to ultimately determine the presence of Recognized Environmental Conditions (REC's) and to ensure that all sites are being evaluated subject to the same minimum standards of evaluation, regardless of who is performing the assessment.

What is a Recognized Environmental Condition? As defined by ASTM Standard 1527-00, a REC is, "the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, groundwater or surface water of the property."

To properly perform a Phase I, the environmental professional requires an understanding of existing and historical conditions and uses of the subject property and all adjoining properties to assess potential liabilities associated with a property. It is the responsibility of the professional performing the Phase I to obtain reasonably ascertainable information, which is publicly available and obtainable from its source within reasonable time and cost constraints. The environmental professional is also responsible for conducting a site reconnaissance and interviews. Prior to the environmental professional performing the site reconnaissance, the user of the Phase I, should disclose all information pertaining to the subject property Based on the information obtained, the professional develops an opinion and provides a conclusion regarding RECs associated with the subject property

Under the Freedom of Information Law (FOIL), an applicant may seek "obtainable" information. Typically, FOIL requests are sent to the local County Department of Health, Town Building Department and local Office of Fire Prevention. Proper planning on the part of the user should allow ample time for the professional to gather information to ascertain an opinion and provide a conclusion for the information obtained through the FOIL requests.

The validity of the Phase I is for a specified period of time, usually six months. The reason for the time limitation is due to changing conditions affecting either the subject or adjacent property such as, spills from tank failures or human error, or changes in the utilization of the adjacent property.

A Phase I should always be prepared by qualified environmental specialist(s).