Phase I Site Assessment, or Phase I Environmental Site Assessment. In New Jersey provides the following:
A Phase I; also known as a Phase I Environmental Site Assessment – Greatly reduces your chances of buying a property with serious environmental problems by identifying existing or past environmental problems on the property. Many commercial properties on the surface appear to be suitable properties but in realty harbor hidden serious environmental problems. Serious environmental problems mean an expensive and long lasting environmental cleanup that can break-the-bank.
A Phase I also allows one to get bank financing. In every real estate transaction for a commercial property the bank financing the property requires that a Phase I be completed. Because the bank does not want to supply hundreds of thousands of dollars for a property and then find out that the property is worthless because of a hidden environmental problem. A Phase I prevents huge monetary losses to all parties involved in a real estate transaction. As you know not all real estate transitions for a commercial property are financed through the bank. Some developers pay cash, and many times they don’t complete a Phase I. Sometimes the property is okay with no environmental problems. Although in other instances the property has a serious environmental problem, and the developer can take a huge hit because they didn’t do a Phase I.
A Phase I allows you to determine if the property is worth buying. Once a Phase I is completed one can make an intelligent decision as to whether the property is worth purchasing. Before completing a real estate transaction for a commercial property or as part of due diligence for a commercial transaction one should investigate the property for its environmental condition. This is done through a Phase I, or Phase I Environmental Site Assessment. A Phase I protects the buyer by identifying past, or potential environmental conditions on a commercial property.
What is a Phase I?
It is a document that investigates the environmental condition of a property usually for a real estate transaction.
The cost of a single Phase I Environmental Site Assessment is $1,500 for any property 2 acres in size, and under. Properties greater than 2 acres in size are quoted on a case-by-case basis.
HOW LONG DOES IT TAKE?
Under normal conditions it takes approximately 2 weeks to finish a Phase I.
WHAT DOES IT DO FOR ME?
It allows you to evaluate the general environmental condition of a property so one can determine if it is feasible to purchase the property.
WHAT DOES A PHASE I COVER?
A Phase I will evaluate general pre-existing environmental and potential existing environmental conditions on a property. By evaluating some of the following; to name a few:
What is the difference between a Phase I, and a Real Estate Transaction Screen?
A Phase I involves a physical visit to the property, walk-through, and evaluation. Then an in-depth written report is produced. Also, a Phase I is for a commercial property only. A Real Estate Transaction Screen is for commercial or residential properties, and there is no site visit. A Real Estate Transaction Screen is a one page map outlining all immediate existing environmental conditions near or on the property.