Environmental Site Asssessments - What Are They?

On December 11, 1980 Congress enacted the Comprehensive Environmental Response

, Compensation and Liability Act (CERCLA), commonly known as the Superfund. This law established a tax on the petroleum and chemical industries. It also provided the federal government with the authority to directly respond to releases and threatened releases of hazardous substances that could endanger the environment as well as public health.

Over the next five years $1,600,000,000 was collected. This money went into a trust fund which was to be used to clean up abandoned or uncontrolled hazardous waste sites.

In 1986 the Superfund Amendments and Reauthorization Act (SARA) were enacted. SARA stipulates that any person or entity that has a past or present tie to a contaminated property is responsible for cleaning it up and could be obligated to bear the financial burden of the entire cost of the clean up. The Environmental Protection Agency (EPA) may require the clean up, or the EPA could clean it up themselves and require that the responsible parties reimburse the cost of the clean up.

CERCLA and SARA established three basic defenses to liability: (1) an act of God, (2) an act of war, and (3) an act or an omission of a 3rd party against which the potentially responsible person or entity took all appropriate precautions. The third defense has come to be called the "innocent landowner defense".

The "innocent landowner defense" precluded the rise of environmental site assessment standardization.

Today general real estate practitioners have to be very much concerned with Environmental Site Assessments because the results of the assessments can have a major impact on whether or not a their clients would be interested in closing on a particular property. However, it wasn't until the early 1990s that environmental site assessment uniform standards were established.

Environmental Site Assessments are reports that identify either existing or potential environmental contamination liabilities. The analysis is often called an ESA and typically it addresses the underlying land.

A Phase I ESA attempts to satisfy one of the requirements necessary to qualify for the innocent landowner defense by completing "all appropriate inquiry into the previous ownership and uses of the property consistent with good commercial or customary practice".

The objective of a Phase II ESA is to confirm whether or not petroleum products or hazardous substances are present at the site and that they have concentrations that require action. Phase II ESAs typically include sampling and analyzing the soil, surface water, groundwater, and sediment.

Depending on the results of the Phase II assessment, environmental remediation may need to be done to clen up or remove contaminants from the property. In some cases, the EPA may require that corrective action planning should be implemented in order to reduce the contamination to below action levels.

by: Wendy Moyer

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