It’s never a happy situation to find yourself in when you’re responsible for finding an Environmental Consulting company to do a Phase 2 ESA on a property you own or a property you want to purchase. Chances are good you’ve never done it before. Below, we try to give you some quick advice on how to get through this as good as possible.
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Who Pays For The Phase 2 ESA?
Typically, the buyer pays for the Phase 2 ESA. However, this is a good time to re-negotiate with the seller. A seller should have answers to put any known concerns to rest or each new potential buyer will have the same concerns as the last. This is why sellers should perform their own Phase 1 ESA and if necessary a Phase 2 ESA to provide the findings as part of their marketing documents.
How Much Should a Phase 2 ESA Cost?
Phase 2 ESAs vary depending on the identified concern, such as heavy metals, petroleum fuels or dry cleaning fluid. A Phase 2 ESA typically includes a drilling company, laboratory testing services and an environmental professional for data analysis and risk assessment. A reasonable cost approximation for a property that is not heavily industrial is about $5000 but it’s impossible to know without reviewing the Phase 1 ESA.
How Long Will a Phase 2 ESA Take to Complete?
The goal at A3 Environmental is to complete a Phase 2 ESA within four weeks. Other consultants typically take up to 8 weeks. Scheduling the site visit to coordinate with the landowner’s schedule, drilling schedules and receiving laboratory results are three things that can significantly prolong the process.
Does the Bank Pick the Environmental Consultant?
A bank does not typically pick the environmental consultant but they strongly influence the decision. Quite often this is based on pure momentum. The bank’s consultant did the Phase 1 ESA so they are the likely pick for the Phase 2 ESA. In fact, consultants count on this arrangement, using the Phase 2 ESA as a loss leader with hopes to make money on the Phase 2 ESA. A borrower who shops for prices can often save themselves thousands of dollars. A properly done Phase 1 ESA report should be all the background information any consultant needs to propose costs for a Phase 2 ESA.
What’s The Most Important Thing To Be On The Lookout For? Where Are You The Most Vulnerable?
Lenders and borrowers are at their most vulnerable during a transaction because there is much to lose in terms of environmental liability. Sometimes, consultants will prey upon this vulnerability by recommending a Phase 2 ESA that may not be necessary based on the findings of the Phase 1 ESA. Protect yourself against shoddy science. First, make sure your consultant is familiar with the local area, is insured for errors and omissions and has a track record of providing quality work product. Then, get a second opinion. For a few hours of consulting time, send the Phase 1 ESA document to another consultant and ask them for their opinion. A3 Environmental would be happy to review any Phase 1 ESA from a consultant recommending a Phase 2 ESA. We offer a half hour of consulting time for free per project. Finally, if a Phase 2 ESA is required, go back to the seller and renegotiate to have them pay for some, or all, of the investigation.
I’ve Shopped For Prices On My Phase 2 ESA, Now What?
Everyone knows to disregard prices that are especially high, but more importantly, be suspicious of low prices. If you want to take the time to learn how to be a better buyer of environmental services, contact the low bidding consultant the high bidding consultant and ask them to explain how they determined their price. The high bidding consultant may see something that the others are missing and a conversation might prevent a nasty surprise. The low bidding consultant may be cutting corners that still leave you exposed to risk. If you are worried, you can call A3 Environmental. We’ll provide a half hour of our time per project for free, to review the lowest bid.
What Should Make My Spider Sense All Tingly?
You should be suspicious of outlying high and especially low prices and anyone that tells you to have a Phase 2 ESA done. Further, you should be suspicious of consulting firms that own their own drill rigs and/or laboratories. At first glance it seems counter intuitive to avoid consulting firms that have their own drill rigs and lab, but a firm will have an incentive to keep them busy whether or not the holes drilled or the samples tested are entirely necessary. It’s better to hire a consultant that is paid for good science than one that gets paid for upselling or cross-selling other services.
What’s Your Best Advice?
Our best advice is to build a good relationship with one environmental consultant after you have done your initial research and done a project or two with them. True, it’s important to hire a competitively priced consultant. However, having a solid relationship with a consultant who you can call and have meaningful conversations, often at no charge, can be worth its weight in gold. If a consultant knows you are a reliable repeat buyer of environmental services they will work to be a trusted resource to help you save money, frustration and time.
If you need a Phase 2 ESA, research or testing done on your property or one you are interested in purchasing, give A3 Environmental Consultants a call. We’ll get your project done with the utmost in confidentiality, we’ll meet or exceed ASTM Standard E1903-19 on any sort of commercial or industrial property. Our Assessments meet the requirements of all lenders and government agencies such as the Small Business Administration (SBA), Housing and Urban Development (HUD) and the United States Department of Agriculture (USDA). A3 Environmental Consultants can be reached at (888) 405-1742 or by email at Info@A3E.com.