How Long Is a Phase I ESA Valid?

The short answer

For liability protection under the federal AAI rule, the inquiry must be completed within one year before the purchase date. Several of its components must also have been conducted or updated within 180 days before the purchase date. If you close after those dates, the report generally cannot be relied on as it stands.

The components that carry the 180-day limit

Under the EPA's AAI rule, these parts must be conducted or updated within 180 days before acquisition:

• Interviews with owners, operators and occupants.
• The search for recorded environmental cleanup liens.
• The review of government records.
• The visual inspection of the property.
• The environmental professional's declaration.

How the dates are counted under ASTM E1527-21

The 2021 version of the ASTM standard asks the environmental professional to state the date of each component in the report. The 180 days are counted from the earliest of those component dates, not from the date printed on the report cover. A report can therefore be dated recently but already be partly used up if the records review was done weeks earlier.

A worked example

Suppose the government records review was completed on March 1, the site visit on March 20, and the report is issued on April 2. The earliest component date is March 1. A buyer who closes on September 15 is past 180 days from March 1, so the report would need to be updated before closing, even though only about five and a half months have passed since the report was issued.

What lenders add

Lenders often set their own requirements. Some ask for a report dated within 180 days of the loan closing, some require that the lender be named as a party who may rely on the report, and some ask for an update letter if the closing slips. Check the loan documents and ask your lender early, because a report that satisfies the law may still not satisfy the loan.

What to do if the dates run out

The usual route is to have the environmental professional update the components that have aged out, instead of starting over. This is generally faster and cheaper than a new report, but it depends on the professional and on how much has changed at and around the property. A report older than a year generally needs to be replaced.

Where a Geoscope report sits in the timeline

A Geoscope records report is not a Phase I ESA and does not follow the Phase I date rules. Each report shows the date it was produced and the records available on that date. Because new records are added to government databases over time, a records search done early in a deal can be refreshed later. Many buyers order one at the start to decide whether a Phase I is worth commissioning, and the Phase I is then timed to the closing.

This article is general information, not legal advice. Confirm the dates that apply to your transaction with an attorney or the environmental professional who prepares the Phase I.

Related

• What Is a Phase I Environmental Site Assessment, and Do You Actually Need One? →
• When Should You Order an Environmental Screening Report? →
• Environmental Due Diligence for Lenders →
• See what's included in a Government Records Report →