When buying or developing land, most people focus on price, access, utilities, and location. But another important factor to consider is the environmental condition of the property. In some situations, an Environmental Impact Study, or more commonly an Environmental Site Assessment, may be needed to identify environmental risks that could affect how the land can be used.
Understanding when these studies are necessary can help buyers avoid unexpected liability and ensure the property meets their goals.
What Is an Environmental Impact Study?
An Environmental Impact Study (EIS) evaluates how a proposed development or project could affect the surrounding environment. These studies may examine impacts to:
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Soil and groundwater
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Wetlands and streams
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Wildlife habitat
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Air and water quality
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Historical or cultural resources
Large developments or projects involving government permits may require an Environmental Impact Statement under the National Environmental Policy Act.
In most private real estate transactions, however, the more common process is an Environmental Site Assessment (ESA), which focuses on identifying existing environmental contamination or potential risks on a property.
Types of Environmental Assessments
Environmental due diligence is typically performed in phases.
Phase I Environmental Site Assessment
A Phase I ESA is the most common environmental review in real estate transactions. It involves researching the property’s history, reviewing regulatory databases, analyzing historical aerial imagery, and conducting a site inspection to identify potential environmental concerns.
Phase II Environmental Site Assessment
If a Phase I identifies potential issues, a Phase II ESA may be recommended. This phase includes soil, groundwater, or other environmental testing to confirm whether contamination is present.
When Is an Environmental Study Needed?
Not every land purchase requires an environmental study, but they are often recommended in several situations:
Commercial or Industrial Properties
Land that has been used for manufacturing, vehicle repair, fuel storage, or similar uses may carry contamination risks.
Development Projects
Large developments or projects involving significant land disturbance may require environmental review during permitting.
Lender Requirements
Banks may require a Phase I ESA before financing commercial property purchases.
Properties with Uncertain History
Land that previously contained gas stations, industrial uses, or dumping areas may warrant environmental investigation.
How to Get an Environmental Impact Study
Environmental studies are typically conducted by licensed environmental consulting firms. The process usually begins with contacting an environmental consultant who will evaluate the property and recommend the appropriate level of assessment, often starting with a Phase I ESA.
The consultant will research property records, inspect the site, and review environmental databases. If concerns are identified, additional testing such as soil or groundwater sampling may be recommended. Costs vary depending on the size of the property and complexity of the study, but buyers and developers often view this as an important part of due diligence.
Environmental Considerations for Rural Land
For recreational, agricultural, or hunting properties, full environmental studies are less common. However, certain issues may still warrant investigation, such as wetlands that affect building potential, old dumpsites, abandoned fuel tanks, or previous chemical storage.
A careful review of the property’s history and condition can help buyers avoid surprises after closing.
Final Thoughts
Environmental Impact Studies and Environmental Site Assessments help buyers understand potential environmental risks before purchasing or developing land. While they are not required for every transaction, they are an important tool when dealing with commercial properties, development projects, or land with a complicated past.
At RF Properties, we help buyers evaluate land beyond the surface, from access and utilities to habitat and development potential, so clients can move forward with confidence. Call us today to get started on your land buying journey!
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