Phase I Environmental Site Assessment is required of purchasers of what type of property to identify potential environmental issues?

• A. Commercial property
• B. Residential property
• C. Public lands
• D. Industrial facilities

Answer: (A)

Phase I Environmental Site Assessment is a due diligence step used in real estate transactions to uncover potential environmental issues that could create liability or affect value. It focuses on the property's past uses, current operations nearby, and regulatory history through records research, interviews, and a visual site inspection. The goal is to identify recognized environmental conditions so the buyer can decide whether to pursue further testing (Phase II) or remediation, and to protect the buyer from future environmental liability. In practice, this assessment is most commonly required when purchasing commercial property, where lenders and buyers need assurance about contamination risk before financing or closing. Residential properties typically don’t require a Phase I as part of standard transactions, while public lands or industrial facilities may involve environmental considerations, but the usual due diligence for a property purchase targets commercial real estate.