Phase I Environmental Site Assessment vs Property Condition Assessment

In 2008 American Society for Testing and Materials (ASTM) published a standard practice for conducting Property Condition Assessment (PCA) at commercial properties, referenced as ASTM E2018 – 08. Some organizations have been left wondering if they should be requesting a Phase I environmental site assessment (ESA) or a PCA.

Although both standard practices are completed in conformance with an ASTM standard practice, the issues each practice is intended to address is very different.

In summary, a Phase I ESA conducted using ASTM E 1527-05 is intended to identify “Recognized Environmental Conditions” (or RECs) associated with a property. Recognized Environmental Conditions are defined as “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 [future] release”. In short – a Phase I ESA addresses releases hazardous substances and petroleum products; it does not address other environmental issues which may be of interest, such as compliance with regulations and permits. It does not address the condition of equipment or structures, unless the equipment or structures are associated with hazardous substances or petroleum products, and that the condition contributed to a release or the threat of future release.

A Property Condition Assessment conducted using ASTM E 2018-08 is a different type of due diligence, pre-purchase, pre-lease, or post-lease inspection. The goal of the PCA is to identify and communicate physical deficiencies to a User. The term physical deficiencies means the presence of conspicuous defects or material deferred maintenance of a property's material systems, components, or equipment as observed during the field observer's walk-through survey. Although a PCA can report on potential environmental contaminants, this type of assessment does not have the same regulatory benefits of a Phase I ESA. Most importantly, a PCA does not constitute “all appropriate inquiry” that is required for CERCLA liability protections. Therefore, prospective purchasers of real estate that wish to retain their Landowner Liability Protections (LLP) under CERCLA need to conduct a Phase I ESA. They may decide to also conduct a PCA to access the property, structures and equipment for defects.

Caltha LLP conducts PCAs and Environmental Site Assessments on commercial and industrial properties across the Upper Midwest. To request a quote, go to Caltha website.

For further information, contact Caltha LLP at:
Email: info@calthacompany.com
Website: http://www.calthacompany.com/