Environmental
A Phase I Environmental Site Assessment (ESA) is conducted to:
ATest soil and water samples for contaminants
BIdentify recognized environmental conditions through records review, site inspection, and interviews—without sampling✓ Correct
CDetermine the property's appraised value considering environmental factors
DObtain a state permit for property development
Explanation
A Phase I ESA identifies recognized environmental conditions (RECs) through historical records review, site inspection, and interviews—without collecting physical samples. If RECs are found, a Phase II (with sampling) may be recommended.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
ZoningLocal government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
VarianceOfficial permission to use land in a way that does not conform to the applicable zoning ordinance, granted by a zoning board when strict enforcement would cause undue hardship.
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