What you need to know about environmental site assessments

An environmental site assessment (ESA) is a comprehensive survey of a site which can help identify the presence and nature of environmental hazards. An ESA can be used to identify any potential environmental risks, including the risk that human activities will pose disastrous consequences — such as pollution and contamination of groundwater. It can also be used to find out if your building’s lead paint has been disturbed or replaced; explore whether asbestos was present, how much asbestos there was and where it was located; and see if the site contains herbicides or pesticides.

The environmental site assessment (ESA) is a great way to reduce risk on your decision to purchase. “The purpose of an ESA, or environmental due diligence, is to make sure a purchaser’s liability is limited,” says BDC Senior Associate, Dan LaBossiere. “For entrepreneurs who discover that a property they want to purchase is contaminated and needs costly clean-up, this can become a condition of the sale, or they may just decide to avoid the issue altogether and walk away.

Before Buying a House Without Environmental Assessments, Think About These Things

 Environmental site assessments (ESA) are an inexpensive and efficient way to ensure that a property you’re purchasing is environmentally safe. LaBossière says, “If you buy a property without conducting an environmental assessment, the consequences can be costly and time consuming. For example, if you need financing to upgrade the property and discover that it’s contaminated, or if you discover there is lead dust or asbestos in your walls before renovations, it will likely increase your costs significantly. You might need to bring in a specialist to clean up the site and dispose of hazardous waste properly. These costs can add up to tens of thousands of dollars or more.”

Assessment phases

Phase 1

 An environmental assessment starts with Phase 1, a visual, historical inspection. An environmental consultant edmonton looks for visual evidence of actual or potential contamination, such as underground storage tanks. The consultant will also collect documents and aerial photos to determine past activities on the site and on neighbouring properties, from which contamination may have migrated. “Often, a business will have cleaned up its own property, but neighbouring property owners have not done the same,” explains LaBossière. The next step is Phase 2 — site mapping/ investigation. During this phase, LaBossière and his team dig down into the soil to find out about any existing waste facilities within a 100-metre radius of the parcel being examined. If there are underground pipes or tanks on-site from an earlier owner or generation of waste (such as petroleum cooking oil), they note this in the report. They then use further information collected to plan a clean-up strategy — essentially working backwards from when they know where contaminants are coming from to what specific areas need attention first.

Phase 2

 Phase 1 and Phase 2 Site Assessments mark the beginning of a formal inspection process. A Phase 2 assessment, which can include soil sampling or other tests, provides a better understanding of the condition of the land, groundwater and structures on the property. If Phase 1 identifies potential environmental issues, it usually triggers further action. A Phase II Assessment conducted for specific projects or efforts may include data collection to better understand how certain activities or practices impact adjacent properties and ecosystems, as well as identify potential relocation sites.

Costs and timing

 The cost of due diligence, which includes Phase I and Phase II assessments, should be factored into the offer to purchase. A two-month window should provide sufficient time to complete a thorough environmental assessment. Phase 1 assessments typically run about $3,000 to $5,000 and take about two weeks (or less). Phase 2 assessments can range from $7,000 to $60,000, depending on the environmental issue.

Environmental insurance

Environmental site assessments can help you acquire clean information about the property you’re purchasing. A thorough environmental assessment helps determine what contaminants might be present at that property. Environmental insurance often covers such conditions as geosynthetics and other surface barriers, soil contamination, groundwater monitoring, soil remediation and reconstruction, lead paint paint removal, asbestos abatement and venting, underground storage tanks and septic systems (if applicable).

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