🏭 Can a Neighbouring Property Affect Your Phase I Environmental Site Assessment?
How adjacent properties can influence environmental risk, commercial real estate
transactions, and recommendations for further investigation in Alberta.
When purchasing, selling, or refinancing a commercial property, many people assume that environmental concerns are limited to activities that have occurred directly on their land. However, this isn't always the case.
Even if your property has never been used for industrial operations, fuel storage, or other potentially contaminating activities, historical or current activities on neighbouring properties may still present environmental concerns.
During a Phase I Environmental Site Assessment (Phase I ESA), environmental consultants evaluate not only the subject property but also surrounding land uses that could potentially affect its environmental condition.
So, how can a neighbouring property influence your Phase I ESA, and when might further investigation be recommended?
Let's take a closer look. 🔍
1. Environmental Concerns Don't Stop at Property Boundaries
One of the most important considerations during a Phase I Environmental Site Assessment is the potential for contamination to migrate from one property to another.
For example, a neighbouring property may have historically operated as a fuel station, automotive repair facility, or industrial operation. Even if these activities ceased decades ago, contaminants may remain in the soil or groundwater.
Depending on site-specific conditions, contaminants can potentially migrate beyond the original source property through:
Groundwater movement: Dissolved contaminants may migrate with groundwater.
Soil vapour migration: Volatile contaminants can move through subsurface soil gas and potentially enter nearby buildings.
Surface water runoff: Contaminated runoff may travel onto adjacent properties through drainage pathways.
Historical fill placement: Impacted soil or fill materials may have been moved between properties.
The presence of a potentially contaminating activity on an adjacent property does not automatically mean the subject property has been impacted. However, it may warrant closer evaluation during the Phase I ESA.
2. Common Neighbouring Properties That May Present Environmental Concerns ⛽
Certain historical and current land uses are more frequently associated with potential soil and groundwater contamination.
Examples include:
Former Gas Stations and Bulk Fuel Facilities
Historical underground storage tanks (USTs), fuel dispensing operations, and petroleum handling activities may have resulted in releases of petroleum hydrocarbons to the subsurface.
Automotive Repair Shops
Vehicle maintenance facilities may have historically handled petroleum products, solvents, waste oils, and other chemicals. Improper storage or disposal practices can create potential environmental concerns.
Dry Cleaning Facilities
Some historical dry cleaning operations used chlorinated solvents, including tetrachloroethylene (PCE). These substances can persist in the subsurface and may present groundwater or vapour intrusion concerns.
Industrial and Manufacturing Properties
Depending on the historical operations, industrial facilities may have used or stored fuels, solvents, metals, and other substances that could potentially affect surrounding properties.
Agricultural Chemical and Fuel Storage Facilities
Rural properties may have historically supported bulk fuel storage, pesticide handling, fertilizer storage, or equipment maintenance activities.
Importantly, the presence of one of these facilities nearby does not automatically establish that contamination exists or that further investigation is required. The environmental consultant must evaluate the specific circumstances.
3. How Does a Phase I ESA Identify Environmental Concerns on Neighbouring Properties? 📋
A Phase I Environmental Site Assessment involves much more than inspecting the subject property.
In Alberta, Phase I ESAs are commonly completed in general accordance with the CSA Z768-01 (R2022) standard, which establishes a framework for evaluating actual and potential environmental contamination.
To assess potential concerns associated with neighbouring properties, environmental consultants may review several sources of information.
Historical Aerial Photographs
Historical aerial photographs help identify how properties and surrounding areas have changed over time.
A neighbouring property that currently operates as a retail store, for example, may have previously been occupied by a fuel station or industrial facility.
Regulatory Database Searches
Environmental consultants review available regulatory information to identify historical environmental incidents, registered storage tanks, contaminated sites, and other relevant records.
In Alberta, this may include information available through provincial environmental databases and regulatory records.
Historical Land Use Research
Municipal records, historical maps, land titles, and other available information may help establish previous property uses and identify potentially contaminating activities.
Site Inspections
During the Phase I ESA site inspection, environmental consultants observe surrounding properties from accessible locations, looking for evidence of potentially contaminating activities.
This may include fuel storage tanks, industrial operations, chemical storage areas, and other visible environmental concerns.
When considered together, these sources help determine whether neighbouring land uses represent a potential environmental concern for the subject property.
4. Does a Neighbouring Environmental Concern Automatically Require a Phase II ESA?
No. Identifying a potentially contaminating activity on a neighbouring property does not automatically mean a Phase II Environmental Site Assessment is necessary.
Environmental consultants must consider several factors when evaluating whether further investigation is warranted.
These may include:
The nature of the historical or current activity.
The types of contaminants potentially associated with the activity.
The distance between the potential source and the subject property.
Local geology and hydrogeological conditions.
Available information regarding previous spills, releases, or remediation.
The potential for contaminants to migrate onto the subject property.
For example, a former fuel station immediately adjacent to a commercial property may warrant further evaluation, particularly if historical environmental records are limited or indicate previous petroleum releases.
Conversely, if sufficient information demonstrates that potential impacts have been adequately investigated and do not present a concern to the subject property, further investigation may not be recommended.
The objective is to make a technically defensible assessment based on the available information rather than assuming that every neighbouring commercial or industrial activity represents an unacceptable environmental risk.
5. What Happens if Further Investigation Is Recommended? 🔬
If a Phase I ESA identifies an Area of Potential Environmental Concern (APEC) associated with a neighbouring property, a Phase II Environmental Site Assessment may be recommended.
A Phase II ESA typically involves collecting and analyzing soil and/or groundwater samples to evaluate whether contaminants are present at concentrations exceeding applicable environmental guidelines.
Depending on the site conditions, this investigation may include:
Advancing boreholes in strategically selected locations.
Installing groundwater monitoring wells.
Collecting soil samples for laboratory analysis.
Collecting groundwater samples for laboratory analysis.
Comparing analytical results to applicable Alberta environmental guidelines.
For a potential off-site source, sampling locations may be selected near the property boundary or along suspected contaminant migration pathways.
The purpose of the Phase II ESA is to obtain additional information regarding subsurface environmental conditions and determine whether further assessment or management is warranted.
A recommendation for further investigation does not mean contamination has been confirmed. It means additional information is needed to adequately evaluate the identified environmental concern.
6. Why Does This Matter When Purchasing or Financing Commercial Property? 🏢
Environmental due diligence is an important component of many commercial real estate transactions throughout Alberta.
Banks, commercial lenders, purchasers, and developers often request Phase I Environmental Site Assessments to better understand potential environmental liabilities before proceeding with financing or property acquisition.
An environmental concern associated with a neighbouring property may influence:
Whether additional environmental investigation is recommended.
The timing of a commercial real estate transaction.
A lender's environmental due diligence requirements.
Potential future development considerations.
The evaluation of environmental liability and financial risk.
For property purchasers, identifying these concerns before completing a transaction provides an opportunity to make informed decisions and, where appropriate, investigate potential impacts before assuming ownership.
A well-prepared Phase I ESA should clearly explain the identified concerns, their potential significance, and the rationale for any recommendations.
7. Your Property's History Is Only Part of the Picture
A property may have been used exclusively for offices, retail, or other relatively low-risk activities throughout its history.
However, that history alone does not necessarily eliminate the possibility of environmental concerns.
Historical activities on surrounding properties, including operations that ceased decades ago, may still be relevant to the property's current environmental condition.
This is why a thorough Phase I Environmental Site Assessment considers both on-site and off-site sources of potential contamination.
Understanding the broader environmental history of an area helps purchasers, property owners, and lenders make better-informed decisions.
Need a Phase I Environmental Site Assessment in Southern Alberta? 🌱
At Nexus Environmental Services Ltd., we provide professional Phase I Environmental Site Assessments for commercial, industrial, agricultural, and development properties throughout Southern Alberta.
Our assessments incorporate historical land use research, regulatory records reviews, site inspections, and evaluations of surrounding properties to identify potential environmental concerns.
Whether you're purchasing, selling, refinancing, or developing a property, our goal is to provide clear, practical, and technically defensible environmental due diligence.
Contact Nexus Environmental Services Ltd. to discuss your property and determine how a Phase I Environmental Site Assessment can support your next transaction.
📍 Serving all of Alberta!
📞 403-394-4001
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