Environmental Site Assessments (ESA), commonly referred to as a Phase I, and Preliminary Assessments (PA) are a common requirement today for most commercial real estate transactions. A properly conducted ESA/PA provides a review of both historic and existing conditions on a site that may indicate a recognized environment condition. The ESA/PA is the only clear way to gain insight into the potential environmental risks that may be associated with real property.
The purpose of a Phase I ESA is to conduct all appropriate inquiry (AAI) into the previous ownership and uses of a property to allow a purchaser and/or lender to establish one of the liability protections under CERCLA sections 101(35)(B)(i)(I) and 101(35)(B)(ii). These liability protections include CERCLA’s innocent landowner defense, the bona fide prospective purchaser liability protection, and the contiguous property owner liability protection.
A properly conducted PA also allows a property purchaser and/or lender to qualify for the innocent purchaser defense to liability under the New Jersey Spill Compensation and Control Act (N.J.S.A. 58:10-23.11 et seq.).