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Phase I ESA History

Phase I ESA History Phase I ESAs began to be sought after in 1980 with judicial rulings stating the liability of resolving an environmental issue on a property was the responsibility of the land owner. The courts were interpreting the Comprehensive Environmental Response, Compensation and Liability act when they decide that a lender, lessor, or the buyer may be the responsibility party for cleaning up a site with environmental problems, even if that person was not the person who originally caused the property’s environmental issue.

The Phase I ESA began to be used as a safety net in order for land owners to qualify for the “innocent land owner defense.” Those who do qualify as for this defense are then able to use funds from federal and state levels of government, as well as other sources to pay for the remediation of their site, without being directly responsible for any costs for this cleanup.

In 1998 congress passed the Superfund Cleanup Act which required purchasers of commercial properties to conduct a Phase I ESA on the property and ascertain whether or not environmental issues exist.

The most recent standard for environmental investigation is the All Appropriate Inquiries (AAI) which is based on ASTM standards released in 2013. All appropriate Inquiries requires purchasers to contact all sources relevant to the property in question in order to ascertain the presence of any environmental issues that would need to be addressed before the sale of the property can be completed.