Need A Transaction Screen Assessment (TSA)?

A Transaction Screen Assessment (TSA) is a form of environmental due diligence which is less comprehensive than a Phase 1 ESA but more comprehensive than a Record Search with Risk Assessment (RSRA). Because it holds a middle ground, there are cost advantages in doing one. However, there are drawbacks too. Keep reading and learn why environmental consultants like A3E hate doing Transaction Screen Assessments and don't recommend them to clients.

To get a good base of knowledge you should probably read about Phase 1 Environmental Site Assessments.

When you are done, you should read about Record Search with Risk Assessments (RSRAs).

Who Needs a Transaction Screen Assessment?

As we mentioned earlier, a TSA is a half step below a Phase 1 ESA. It's also a half step above a RSRA. Essentially it's a RSRA with a site visit added on. The TSA is a ASTM standard product E1528-14 which is the standards organization for environmental reports in the United States. We see these reports being requested by banks and other lending institutions who make loans with the Small Business Administration (SBA). It appears that someone in management at the SBA likes TSA. For that reason, banks typically request them by name. We have noticed our bank clients request TSA on apartment buildings but there's no special reason why they couldn't be requested on most types of commercial real estate.

How Long Does It Take to Do Transaction Screen Assessments?

The difficult part of doing a TSA is getting an environmental professional onsite to do the site assessment. Scheduling and travel are difficult to fit into other projects going on so we typically ask for the same amount of time it takes to do a Phase 1 ESA, or 10 to 15 days.

What Does A Transaction Screen Assessment Cost?

A TSA costs less than a Phase 1 ESA but more than a RSRA. The price is dependent on the size of the property, the distance from the environmental professional and the difficulty of getting the project done. A typical price for a TSA is $950. The cost for a Phase 1 ESA is typically $2000 and the cost for a RSRA is typically $650. As you can start to see, the TSA takes the same time as a Phase 1 ESA but costs less. All of this would be good if it weren't for the fact that the protections it gives you in the form of a limitation to the liability of the user (buyer of the TSA) is the same as that of the RSRA - None. All of this leads environmental consultants like A3E to think; if there is no protection for either, but the RSRA is faster, why not just get a RSRA?

To put a fine point on it, this is the reason environmental consultants hate the Transaction Screen Assessment. More cost than the RSRA, no liability protection like the Phase 1 ESA, and no time savings.

What Type of Limitation of Liability is Built Into the Transaction Screen Assessment?

None. The Transaction Screen does not satisfy the requirement to conduct all appropriate inquiries into the previous ownership and uses of the property in order to qualify for one of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) Landowner Liability Protections (LLPs). Qualification for one of the CERCLA LLPs requires a Phase 1 ESA.

How Long is a Transaction Screen Assessment Good For?

Like a Phase 1 ESA, a TSA is good for 180 days.

Who Can Perform Transaction Screen Assessments?

Any environmental due diligence consultant can perform a TSA, however a wide swath of other people can perform them too. In the ASTM Standard E1528-14, section 4.3 it lists the following:

"4.3 Who May Conduct—The transaction screen process may be conducted by the user, or some other person, including environmental consultants, lenders, brokers, appraisers, corporations, lawyers, government agencies or any other party looking to screen environmental property risk. The transaction screen process can be performed by, but does not require the judgment of an environmental professional. If an environmental professional is contracted to prepare a transaction screen questionnaire, nothing in this practice requires the professional to develop opinions and conclusions. Nothing in this practice precludes a user from contracting with any person identified herein for mutually agreed upon additional services."

Is A Site Visit Required for a Transaction Screen Assessment?

Yes, Absolutely. But a site visit isn't the best determining factor of environmental risk, it's just one more factor. The Environmental Database Reports (EDR) which we get from our data vendor, ERIS, are very important too.

What Happens If There Are Recognized Environmental Concerns (REC) Identified In My Transaction Screen Assessment?

First off, in the TSA world we don't have Recognized Environmental Concerns (REC)s, we have Potential Environmental Concerns (PEC)s. If we find PECs, we typically turn our TSA into a Phase 1 ESA to get liability protection. We can however go straight to a Phase 2 ESA if we determine it's a good idea.

What Else Do I Need To Know about Transaction Screen Assessment?

If you need a Transaction Screen Assessment, 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 product E1528-14 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.

If you're thinking of having a TSA done on you property to save time and money, make sure you understand the process and the possibility of having to spend more money on a Phase 1 ESA if PECs are found in order to get LLPs. The TSA does not go into as much historical detail about a property as a Phase I ESA. Unlike a Phase I ESA, TSAs relay solely on interviews with current owners, occupants and the user, limited historical information and review government databases.