5 Ws of STAGE 1 PSI / PHASE 1 ESA

5 Ws of STAGE 1 PSI / PHASE 1 ESA

03:39 20 November in Uncategorized
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The Stage 1 Preliminary Site Investigation (Phase I Environmental Site Assessment) is an important tool for property owners, investors, realtors, lenders, financial institutions and more. The Stage 1 PSI allows you to go into a property deal with your eyes open to the potential environmental liabilities present. Following is a brief outline and the 5 Ws on Stage 1s.

“A lending organization or individual who takes possession of [a Contaminated Site] … may find that the property is worth very little. They may even find that the costs of a cleanup exceed the property’s value.” ~CMHC 2006

Who? – A Stage 1 Preliminary Site Investigation (PSI), otherwise known as a Phase 1 Environmental Site Assessment (ESA) is carried out by an Environmental Consultant for a client who is interested in determining the environmental risks of a property or site.

What? – The Stage 1 PSI is a method used to assist in determining potential environmental liabilities due to contamination on a site or property. This process involves a detailed review of land uses and history including a site visit, record searches, personal interviews and the evaluation of related information and reporting. This information is compiled and used to determine the potential of impact on a site due to contamination.

Where? – Most often PSI’s are used to assess commercial or industrial land prior to financing, acquisition tenancy or sale; but may be used in many circumstances to gather valuable environmental information on a property or site.

When? – Stage 1 Preliminary Site Investigations (PSI) or Phase 1 Environmental Site Assessment (ESA) may be used to:

  • provide a liability assessment prior to an acquisition or divestiture, or prior to tenancy of a property or site
  • provide due diligence measures in support of a real estate or financing agreement or to maintain compliance with a corporate stewardship policy
  • meet a regulatory request

Why investigate? – 3 Reasons: Financial, Legal and Environmental

Financial concerns with contaminated sites can quickly become significant.

“A buyer who borrows money to purchase a property that turns out to be contaminated may subsequently be prosecuted for environmental offences and face fines and legal and cleanup costs… If lenders then have to take possession of the contaminated property, they may be prosecuted or become liable for the debtor’s environmental problems, including clean up costs.” ~CMHC 2006

The Legal aspects of contaminated sites are complicated and potentially very expensive.

“A demonstration of due diligence has been used successfully as a defence strategy in legal cases dealing with environmental problems. If a lender or owner becomes involved in legal proceedings concerning contaminants at a particular site, a credible Phase I ESA, with appropriate follow-up, may help support a claim of due diligence.” ~CMHC 2006

Identification of Environmental features and receptors will assist in managing future site uses and potential contamination damages.

“A Phase I assessment may help reduce the environmental damage inflicted by contamination. By identifying potential problems, an ESA can alert those responsible to the need for cleanup or management of the contamination.” ~CMHC 2006

How? – To initiate or inquire about a PSI/ESA for a site or property contact a suitable qualified environmental professional to discuss details. Be sure to inquire about the standards and methodology that will be used.

Valhalla Environmental meets the following Stage 1/Phase 1 Criteria:

  • CSA Standard “Z768-01 Phase 1 Environmental Site Assessment” – Phase 1 ESA
  • Canada Mortgage and Housing Corporation CMHC guidelines
  • The requirements of the BC Ministry of Environment (MoE)
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