When buying or refinancing a property—especially commercial or industrial—environmental due diligence is critical. One of the first steps in that process is the Phase I Environmental Site Assessment (ESA). But a common question many clients ask is:
“Who is actually responsible for ordering a Phase I ESA?”
Let’s break it down.
Who Typically Orders a Phase I ESA?
- The Buyer
In most cases, the buyer of a property initiates and pays for the Phase I ESA.
Why? Because it helps them:
Assess potential environmental risks
Qualify for the “Innocent Landowner Defense” under CERCLA
Avoid future liability for contamination
Tip: If you’re a buyer, always get the Phase I ESA before closing.
- The Lender
If the property is being financed, the bank or lending institution may require a Phase I ESA.
This protects their investment and ensures the property has no hidden environmental liabilities.
Many lenders won’t approve commercial loans without a clean ESA report.
- The Seller (Occasionally)
Although less common, some sellers choose to order a Phase I ESA to speed up the sale or build trust with buyers.
Sellers who proactively disclose environmental conditions can make negotiations smoother.
Legal & Financial Responsibility
While buyers usually bear the cost, the responsibility to ensure due diligence is done lies with whoever wants to protect themselves from liability.
If you’re a developer, investor, or real estate agent, recommending a Phase I ESA can safeguard your clients and business.
Need Help Ordering a Phase I ESA?
At BegEnvironmental, we assist buyers, sellers, and lenders with fast, compliant, and reliable Phase I Environmental Site Assessments throughout Texas and beyond.
Contact us now for a free consultation or to get a quote today.