Environmental

A Phase I Environmental Site Assessment (ESA) was conducted on a Minnesota commercial property. The assessor found 'recognized environmental conditions' (RECs). What should happen next?

AThe transaction should be cancelled immediately
BA Phase II ESA (soil and groundwater testing) should be conducted✓ Correct
CThe seller must clean up the site before selling
DThe buyer's lender determines if additional investigation is needed

Explanation

Recognized environmental conditions (RECs) discovered in a Phase I ESA indicate potential contamination that requires further investigation. A Phase II ESA involves actual soil and groundwater sampling to determine if contamination is present and its extent. Minnesota commercial property buyers should always conduct appropriate due diligence for environmental issues.

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