It is very important, and most times required, by lenders to have a Phase I Environmental Site Assessment (ESA) performed prior to a property transaction. The purpose of an ESA is to identify environmental risks associated with the property and to protect against liability related to existing site conditions. However, there are a number of environmental considerations which are outside the scope of a Phase I ESA; commonly referred to within an ESA as “non-scope considerations.” These additional considerations help identify business risks and potential financial burdens prior to completing a transaction.

Some of the most common non-scope considerations are wetlands, asbestos, lead and mold. All of these can be generally identified within the time frame of a Phase I; however, in order to more completely determine the risks or potential costs associated with these items, full research, investigation and testing is typically necessary.

In 1975, the United States Environmental Protection Agency (EPA) promulgated a three-stage ban to prohibit the future use of asbestos-containing materials (ACMs) in buildings. However, regardless of the age of the building, an asbestos inspection is required prior to any renovation or demolition activities that would impact suspect ACMs. Asbestos can be found in drywall, plaster, flooring materials, glues and adhesives, ceiling tiles as well as insulations materials. Though they generally present little risk if undamaged, they can result in a health exposure risk if damaged or disturbed and can add costs to a renovation or demolition project. These materials can easily be identified by having an asbestos survey performed by a licensed asbestos inspector. The results of an asbestos survey can provide important information while preparing to purchase, occupy, renovate or demolish a building.

Lead based paint is common on structures built prior to 1978. Like asbestos, if the paint is in good condition with no chalking, chipping or peeling; it presents very little risk. However, special considerations should be taken if a building with lead based paint is to be occupied with children. In addition, lead based paint can create hazards during renovation projects where lead dust may be generated. A lead based paint inspection can be performed to identify the presence of lead based paint. Lead based paint can be identified by collecting paint chip samples for laboratory analysis or by utilizing an XRF; a direct read instrument that provides instantaneous results. This information will allow a purchaser to identify the risks associated with utilizing a building where children would be present or provide a means of evaluating additional costs that may be associated with a renovation project.

Mold is naturally occurring and found in almost all indoor environments. When found in high concentrations and actively growing, it can present unexpected remediation and restoration costs. In addition, a property owner could incur liability associated with mold that results in health complaints. A visual inspection can go a long way in identifying mold issues if performed by an experienced inspector. A thorough inspection should include a visual inspection and moisture readings of building components, temperature and humidity readings as well as microbial sampling. This would help to understand the extent of an identified mold issue and the costs associated with remediation as well as provide information regarding the indoor air quality of a building.

A wetland is an area of land whose soil is saturated with moisture either permanently or seasonally. Such areas also may be covered partially or completely by shallow pools of water. Examples of wetlands would include but are not limited to swamps, marshes and bogs. The government provides incentives and regulates and manages wetland resources to protect them from degradation or destruction. For landowners who want to protect the natural resources on their property, knowing a wetland exists may be enough information for a hands-off form of stewardship. However, if you want to do something in or adjacent to a wetland which might impact the wetlands functions (or is a regulated activity), then knowing the wetland boundaries is essential. This can present some unexpected costs and limitations to a site development project in the form of permits, fines and wetland mitigation. By performing an evaluation of potential wetlands on a property prior to the transaction, the costs and limitations associated with a wetlands area could be avoided or better understood.