Phase I ESA Env. Lien Search
Phase I ESA Env. Lien Search
(OP)
Since ASTM E1527-05 went into effect, an Environmental Lien Search and an Activities and Use Limitations Search is spelled out as a user responsibility. These searches are also required in order to obtain the LLP afforded by the Phase I. Without the searches, there is no LLP.
As a result of the new standard, our base rate for a Phase I has already risen. In our proposals we include a line item to conduct these searches (we hire a title company) as an option. In some areas, these can be quite pricey. As a result of the price and an apparent inability on my part to stress the importance of having this done, our clients are typically forgoing these searches.
What are others' experience in this regard? I've contemplated removing the option and including it as a standard part of our process, but then it will look like another price jump on our part. With other firms not doing this, we will become uncompetitive. Any ideas?
As a result of the new standard, our base rate for a Phase I has already risen. In our proposals we include a line item to conduct these searches (we hire a title company) as an option. In some areas, these can be quite pricey. As a result of the price and an apparent inability on my part to stress the importance of having this done, our clients are typically forgoing these searches.
What are others' experience in this regard? I've contemplated removing the option and including it as a standard part of our process, but then it will look like another price jump on our part. With other firms not doing this, we will become uncompetitive. Any ideas?





RE: Phase I ESA Env. Lien Search
New Ph I is way more work. Some client's still use old standard, esp if they just need a Ph I to satisfy the bank, and not because they think there might be impairment to the site.
RE: Phase I ESA Env. Lien Search
What do you do if they don't provide the information? I note it in the report, and since it is a user responsibility, I am covered. My problem is that I do not like to do this. There is no LLP without the information, so I may as well perform the Phase I to the old standard - it would have the same value. I'm looking for a way to protect my clients without incurring an unreasonable expense on my part.
RE: Phase I ESA Env. Lien Search
RE: Phase I ESA Env. Lien Search
RE: Phase I ESA Env. Lien Search
No, the title search done for closing does not include a search for environmental liens or AUL. I've spoken to three title companies and asked them that question and they all said it would be an extra fee. Regardless, if the EP does not have the information, then the Phase I can not be considered complete. That would be like issuing the report and then doing the interviews later.
Even if the Phase I was just "to satisfy the bank", isn't the bank entitled to LLP protection as well? It's their money at risk.
RE: Phase I ESA Env. Lien Search
With that said, you did your part by giving them the option to perform the service.
To answer your other question, no the bank is not entitled to LLP protection. They don't need it. Lenders are automatically exempt from CERLCA liability. LLP protection is only for a prospective purchaser.
RE: Phase I ESA Env. Lien Search
ASTM E1527-05 is only a standard and not some sort of legal necessity. Following ASTM E1527-05 mearly shows that a standard was followed which hopefully would provide a stronger defense if for some reason it ever got to court. I have conducted many a Phase 1 to my client’s standards which commonly did not meet ASTM standards. If a client does not wish to pay for or provide the Environmental Lien Search, a simple disclaimer in your proposal or contract stating the exception of omitting the Environmental Lien covers you. A statement in the report regarding the omission would also be warranted.
In all reality, I don't see how a property could be impacted to the point where an Environmental Lien was applied against the property and no other indications of environmental concern were apparent. If someone could provide an example, I would love to see it.
RE: Phase I ESA Env. Lien Search