What are ESA inspections and why businesses need them
How ESA inspections are critical when purchasing a commercial property
Commercial properties are a large investment. Beyond the financial obligations, you have to consider the overall maintenance and upkeep of the business. The last thing that any business needs is to have environmental issues which would hinder the business. Yet, many businesses fail to have an ESA test performed on their property prior to purchase. A commercial property inspection may or may not come with an ESA and so it is paramount that you specifically request this type of testing for your potential property prior to purchasing.
What is an ESA?
ESA testing stands for Environmental Site Assessment testing. It is a two Phase test which provides commercial investors with a report of any environmental issues of any site which has been used for commercial purposes. Even if a property has been vacant for several years it is critical to have this test done. Sites which have been vacant may still pose environmental issues, especially if contaminants were not properly contained or disposed of prior to vacating the property. For example: If you are buying a property which was owned by a mechanic several years ago, it would be wise to ensure that oil was not improperly disposed of on the property. Oil cleanup is expensive and can involve fines, even if you are not the culprit of the initial spill. The philosophy is that it is your property and your responsibility. Ensuring that you are not accountable for someone else’s mess can save you a lot of heartache.
Phase I ESA
Consider Phase I as a minor test. Just like a test in school, the inspector reviews the existing materials to prepare for the inspection. The ESA inspector goes and looks at the material which is available. History records are searched as well as inspection records and interviews are conducted. If the former occupant is available for interviewing, one may be conducted. After all the research data has been collected, the ESA inspector will then inspect the property to identify any environmental issues.
In phase I ESA inspections, a professional (such as one from Capstone Inspections) will not only inspect your property but also ensure that contaminants from nearby businesses are not contaminating your potential property as well. This is something that a former report may not yield. If a new business has occupied the building next door after the property became vacant, then there would be no record of, for example, sewage leaking onto your property from a leaking septic tank on theirs.
Phase I inspections are required to qualify for the innocent land owners defense and filing with CERCLA.
Phase II ESA
Should the phase I inspection show that there are potential contaminations on the property then a phase II assessment will be performed. In phase II, an ESA professional commercial property inspector will take samples and perform laboratory analysis to establish the extent of the contamination , as well as provide possible solutions to the results. Test may include:
- Soil and water samples
- Surface soil borings
- Groundwater analysis (both on the desired property and on adjoining properties)
- Drum sampling of containers abandoned by prior occupants
- PCB testing
- Wells, septic, and egress testing
Ensuring that your property is environmentally sound is the best way to minimize financial losses due to cleanup, repairs, or containment. Should any issues be found, it is advised that these issues be brought to the attention of the seller and negotiations be conducted as to the proper removal of the contaminants from the property as it relates to your building cost.
Be prepared
No investor wants to think that he or she is being swindled in a deal, but it does happen. Unfortunately, the number of instances has increased over the years. This is not to say that your property is unfit for you to use or that your seller is trying to pull the wool over your eyes. We are just stating that in today’s society, it is critical that you get an ESA inspection performed and address any issues which may arise from the report prior to buying the property.
As stated earlier, environmental issues which are found after the purchase of the property are considered by the US Supreme Court as being the responsibility of the owner even if a prior occupant is responsible for the contamination. The courts have also upheld that any damages which are caused to adjoining properties as a result of contamination on your property can result in fines and restitutions to that business even though the initial cause of contamination was from a former occupant.
CaptoneInspectors.net would love to assist you with your ESA inspections. Our teams of professionals have all been certified by the NIBI as well as in ESA inspections. Should you have any inquires as to the ESA inspection process and how our business will conduct such an inspection on your potential property, please feel free to contact us by phone or by email.