When a Phase II Environmental Site Assessment is recommended, it’s not uncommon for buyers, lenders, or brokers to assume the worst. Many view it as the beginning of expensive delays, unexpected cleanup costs, or even the end of the transaction altogether.
But in reality, a Phase II ESA isn’t designed to stop a deal, it’s designed to answer the questions that could otherwise keep it from moving forward.
Myth: “If a Phase II is recommended, the deal is in trouble.”
We know that additional testing sounds scary, but that testing just helps shed a light on what is actually present on the property. No one ever wants to come across unexpected environmental issues, but you need to have the full picture and scope of even a seemingly minor REC. More investigation often gets mistaken for bad news, but the reality is that a Phase II helps to limit risk and can also help protect against liability and long-term expenses.
Reality: A Phase II Provides Answers, Not Roadblocks
A Phase I identifies potential concerns. A Phase II determines whether those concerns are real, significant, or manageable. Your environmental team will collect soil, groundwater, soil vapor, or indoor air samples and test them to determine if there are contaminants present and, if so, how much. Then they will measure the extent of the impact to your property or surrounding areas and if remediation actions are required. This helps lenders and buyers make informed decisions.
For more information about what a Phase II is and if you need one, reach out to our team here!