An ASTM Transaction Screen is a streamlined environmental assessment conducted in accordance with the ASTM E1528 standard. It primarily relies on a questionnaire, records review, and a potential limited site visit to identify potential environmental concerns associated with a property.
ASTM TSAs offer a preliminary level of environmental due diligence within commercial real estate transactions. They are often used for low-risk properties or to meet initial lender due diligence requirements.
The ASTM TSA Process: Key Components
Questionnaire
The environmental professional provides the property owner or occupant with a detailed questionnaire. This gathers information about current and historical site uses, storage or handling of chemicals, waste disposal practices, spills or leaks, and other activities that might suggest environmental risks.
Records Review
The environmental professional examines federal, state, and local environmental databases, as well as historical records (aerial photos, city directories, etc.), to find evidence of potential contamination sources on or near the property.
Limited Site Visit (Optional)
A site visit may be conducted to identify visual indicators of environmental concerns. This could include observations of improper storage/disposal, unusual odors, or site conditions that raise questions.
TSA Report
The report summarizes findings from the questionnaire, records review, and site visit (if conducted). It outlines areas of potential environmental concern (RECs) and may recommend a Phase I ESA for further investigation if warranted.
Benefits of an ASTM Transaction Screen
- Cost-Efficiency: ASTM TSAs are significantly less expensive than a full Phase I ESA due to their streamlined nature and focus on existing records. This makes them especially attractive for buyers and lenders involved in smaller transactions or those working with budget constraints.
- Speed: The reliance on a questionnaire and readily available records allows TSAs to be completed relatively quickly, often within a week or two. This facilitates faster decision-making in time-sensitive real estate transactions.
- Preliminary Risk Identification: While not as comprehensive as a Phase I ESA, a well-conducted ASTM TSA can still uncover obvious red flags. It provides a baseline understanding of potential environmental liabilities, helping buyers, sellers, and lenders assess risks early in the process.
The ASTM standard provides a degree of consistency and reliability, ensuring that even with the smaller scope of a TSA, buyers are still getting an assessment based on industry-recognized practices.
When to Consider an ASTM TSA
Scenario 1: Simple, Low-Risk Properties
Property Examples: Vacant lots in residential areas, small commercial buildings with straightforward histories (e.g., retail, office space), properties with no indication of past industrial use.
Why a TSA is Suitable: In these scenarios, the likelihood of significant contamination is often low. An ASTM TSA can provide a cost-effective way to satisfy a lender’s initial due diligence requirements and offer peace of mind before undertaking a full Phase I ESA.
Scenario 2: Stepping Stone to Phase I
Example: A property with a past use as a gas station (but now redeveloped). The ASTM TSA might uncover this past land use, but not provide sufficient detail to determine if contamination is present.
TSA’s Role: It flags the potential risk and clearly indicates that a full Phase I ESA, potentially including soil and groundwater testing, is necessary to make informed decisions about the property.
ASTM TSA vs. Phase I ESA
| Characteristic | ASTM Transaction Screen (TSA) | Phase I ESA |
| Scope | Limited: Questionnaire, records review, optional limited site visit | Comprehensive: Includes interviews, historical research, in-depth site visit |
| Liability Protection | May not fulfill CERCLA “Innocent Landowner Defense” requirements | When conducted according to ASTM standards, generally meets CERCLA requirements |
| Typical Cost | Significantly less expensive | Higher cost |
| Turnaround Time | Faster (often within a week or two) | Longer (several weeks) |
Situational Value of the ASTM Transaction Screen
The ASTM Transaction Screen (TSA) serves as a targeted tool within the broader framework of environmental due diligence. Its cost-effectiveness and speed make it a practical choice for initial assessments of seemingly low-risk properties or when time is a major constraint. The TSA, adhering to the ASTM standard, provides a structured approach to identifying potential environmental concerns.
It’s crucial to recognize the TSA’s role as a preliminary screening. In cases with complex property histories, known risks, or when maximum liability protection is desired, the more comprehensive Phase I ESA is essential. Understanding the distinct purposes of both the TSA and Phase I ESA is key to choosing the most appropriate assessment for the specific property and transaction.
Ultimately, a strategic approach to environmental due diligence, where the ASTM TSA is employed alongside other assessments as needed, helps buyers, sellers, and lenders manage environmental risks proactively, facilitating informed and responsible real estate decisions.
Frequently Asked Questions About ASTM Transaction Screen
What if the TSA finds potential problems? Am I still protected?
A TSA’s main function is to uncover red flags. If potential environmental concerns (RECs) are identified, it might NOT provide the same legal protection as a Phase I ESA. To understand your options, consult with your environmental professional and real estate attorney. They can help determine if a more detailed Phase I ESA is necessary for liability protection or to guide negotiations.
My lender is asking for an ASTM TSA. What does that mean for me?
Lenders often require an ASTM TSA as part of their due diligence on smaller or seemingly low-risk transactions. It helps them assess potential environmental liabilities before approving the loan. Cooperate with the process, as a smooth TSA can facilitate a faster decision on your loan application.
Can I use a TSA instead of a Phase I ESA to save money?
Sometimes, but not always. TSAs are less expensive, but they don’t offer the same depth or potential liability protection as a Phase I ESA. On high-risk properties or where maximum protection is sought, a Phase I ESA is the safer choice. Choosing the right assessment is crucial to avoid costly surprises later.
The property owner won’t agree to a Phase I ESA due to the cost. Can a TSA still be useful?
Yes. Even with limitations, a TSA is better than no assessment at all. It offers a preliminary look, and if any concerns are found, you can use those findings to negotiate for a lower price or insist upon remediation before proceeding.
Is there a specific time limit for how long a TSA is considered valid?
While there’s no set expiration like a Phase I ESA, TSAs rely on records that could change. Additionally, property conditions might change. Consult with your environmental professional and lender to determine if an update is needed, especially for transactions with longer timelines.