A Phase Two environmental site assessment often becomes a vital part of individual commercial real estate transactions. However, many commercial landowners are unfamiliar with Phase Two ESAs because they are not required in every land purchase.
To help you protect your investment, we have created this guide to Phase Two environmental site assessments. We discuss what they are and when you may need one.
What Is a Phase Two ESA?
A Phase Two ESA is an in-depth site inspection. Phase II assessments check for contamination when recognized environmental conditions (RECs) are present. Common RECs include:
- Soil vapor or groundwater concerns
- Used fuel drums
- Fill materials on a site
- Dry cleaning chemicals
- Underground storage tanks
- Leaking pipes or tanks
Phase Two ESAs do not check for RECs. Instead, this inspection examines RECs that are found at the previous step during a Phase One ESA. Phase Two ESAs reveal if contamination is present on a site. These ESAs can unveil water or soil contamination.
A Phase II expands from indicators to confirmation by defining where and how hazardous substances might be encountered, then mapping their presence and likely impact on current and future site use. In practical terms, it is an assessment that converts field inspection and laboratory testing into decision-grade analysis your team and lenders can reference throughout due diligence.
When Are Phase II ESAs Necessary?
Phase One ESAs are needed for commercial real estate deals because lenders almost always require them to protect their interests. However, if a Phase One ESA is not mandated by your lender, we believe that you should still perform one. It will protect you from liability if environmental hazards are present.
Unlike Phase One ESAs, Phase Two ESAs are not always needed. A Phase Two ESA is only required if the Phase One ESA discovers RECs or other hazards. Phase Two ESAs reveal the severity of environmental contamination. They also help you determine how much it will cost you to make the land safe to use.
Developers also initiate Phase II work when change of use, redevelopment earthwork, or agency file reviews suggest potential hazardous releases that merit objective investigation. In these cases, a concise evaluation helps clarify regulatory expectations, document compliance posture, and set up any targeted mitigation that keeps the transaction on track.
What Does a Phase Two Environmental Site Assessment Entail?
Phase Two ESAs are complex site assessments. They follow specific guidelines outlined by ASTM in their document, “Standard Practice for Environmental Site Assessments: Phase II Environmental Site Assessment Process.”
As a result, a Phase Two ESA involves many steps. The exact steps taken during a Phase Two ESA will vary. However, site inspectors will typically perform the following activity during a Phase Two ESA:
Review Site Data
Site inspectors must review all land data. This data will help them determine the scope of the inspection. The data that they will review includes:
- Phase One ESA reports
- Title history
- Usage history
- Sale records
The assessment team will need to perform different tests depending on what the land was used for. The scope of the Phase Two ESA must also align with state and federal regulations. If it does not, then the Phase Two ESA may not protect you from liability. Treat data compilation as the foundation of the audit record by confirming chain of custody for historical sources and any prior assessment reports. Your consultant should note data quality limits so later analysis reflects known uncertainties rather than assumptions.
Permit Acquisition
After site assessors define the scope of the Phase Two ESA, they will need to obtain permits. Permits are needed for Phase Two ESA site drilling. Obtaining permits will increase the total cost of the Phase Two ESA. However, failing to obtain permits can result in fines.
Each state responds to permit requests at different rates. Some states offer permits in as few as five days. Others take two weeks or more. If your state takes longer to issue permits, it can delay the Phase Two ESA.
Early agency coordination reduces surprises and aligns drilling locations with site infrastructure and access constraints. Clear documentation here shortens review cycles and supports a verifiable due diligence file.
Perform Fieldwork
The key aspect of a Phase Two ESA is fieldwork. This fieldwork will vary depending on your Phase One ESA report findings. However, all Phase Two ESAs involve drilling. Some involve water sampling as well.
Inspectors will also assess RECs. They will check for leaks or other concerns. If new issues are discovered, then inspectors may have to expand the scope of the Phase Two ESA.
All of the collected samples will then be sent to a lab. The lab will test samples for various contaminants. After this step is completed, the results will be returned to the inspectors for review. Field investigation typically combines soil borings, groundwater sampling, and where relevant, soil-gas screening to delineate the presence and extent of contamination. Each activity should follow published methods so downstream testing and evaluation meet defensibility standards.
Review Test Results
Inspectors obtain large amounts of data during a Phase Two ESA. They must review all of this data to determine whether hazards are present. After the data is consolidated and reviewed, it is presented in text and charts. Presenting information in this way makes the data easier to read.
All tests must be performed following EPA standards to ensure accuracy. Otherwise, the results may be unreliable. You must select a reputable Phase Two ESA firm to handle your site inspection. Laboratory analysis should be presented with method detection limits, qualifiers, and data validation notes so readers can judge potential impact with appropriate confidence. Summary figures that overlay results on a site map help tie findings to actual conditions.
Create a Report
Phase Two assessors will compile an inspection report. The report will be presented to you and your lender. The report outlines what contaminants were discovered – if any. It will also explain whether these contaminants pose a risk to people or the environment.
The report will explain what tests the assessment team performed. It documents every step taken to obtain samples. This information demonstrates the legitimacy of the methods and findings.
Phase II ESA reports also include the firm’s recommendations. The firm may suggest remediation. Site remediation involves reducing or eliminating the contaminants present. Remediation may include things like removing soil or cleansing groundwater. The Phase II report functions as a durable audit artifact, linking observations, testing results, and professional evaluation to recommended actions. Well-structured narratives make it easier for agencies and stakeholders to verify that the assessment supports the project record.
Schedule Remediation
If remediation is recommended, you will need to schedule these services as soon as possible. When a site requires extensive remediation, it will reduce the value of the land.
You can use Phase Two ESA findings to negotiate a fair purchase price. You may even decide a piece of land is not a worthwhile investment based on your Phase Two ESA findings. If mitigation or corrective action is advised, the consultant should outline sequencing that considers access, safety, and seasonal conditions so work proceeds efficiently. These notes become practical guidance for integrating remediation with construction and operations without overstatement.
Learn More About Phase Two Environmental Site Assessments
Want to learn more about Phase II assessments and other due diligence practices? If so, then RSB Environmental can help.
Our team consists of experienced environmental consultants. We offer many services for property owners, including Phase Two environmental site assessments.Whether you are validating hazardous source presence or closing out a regulatory audit, a well scoped Phase II keeps the assessment, investigation, testing, and mitigation record aligned with the realities of the site and the schedule.
We also publish a monthly email newsletter that covers critical environmental topics. Send us an email at info@rsbenv.com to start receiving updates directly to your inbox. We’ll help you stay up-to-date on the latest developments that affect environmental compliance for property owners.
Frequently Asked Questions
When is a Phase II ESA triggered?
When Phase I findings suggest the presence of potential contamination, a Phase II assessment proceeds to confirm conditions through targeted investigation and testing at the site.
How does a Phase II ESA fit into due diligence?
Think of a Phase II ESA as Part of Environmental Due Diligence that provides defensible analysis and evaluation so stakeholders can understand impact and plan next steps.
What field activities are included in a Phase II ESA?
Typical work includes soil, groundwater, or soil gas testing, along with on-site inspection and sampling protocols designed to evaluate possible hazardous releases.
How are laboratory results used in decision making?
Validated data undergo analysis and evaluation against applicable benchmarks to determine impact on current and future site use.
Who should conduct the Phase II ESA?
An experienced consultant leads the investigation, maintains an audit-ready record, and aligns the assessment with relevant standards and guidance.
What does the final report deliver?
A clear assessment narrative that documents methods, testing results, and evaluation findings, plus recommendations for mitigation if warranted.
How does a Phase II ESA support mitigation planning?
If the presence of hazardous substances is confirmed, the report outlines mitigation options and sequencing that integrate with permitting and construction planning.
What outcomes should stakeholders expect?
Either a conclusion that no further action is indicated or a recommendation for additional investigation, mitigation, or monitoring based on confirmed impact at the site.
