Phase I investigative reports prepared for real estate property are meant to identify environmental contamination and __________.

• A. Liability
• B. Risk
• C. Remediation
• D. Compliance

Answer: (A)

Phase I environmental site assessments are done in property transactions to uncover whether there is environmental contamination and the potential liability tied to that contamination. The key idea is not just whether something was contaminated, but who might be legally responsible for cleanup and penalties if it is found. This liability focus helps lenders and buyers assess financial exposure and decide on next steps, such as further testing. Remediation and compliance are addressed in later stages or separate processes—the Phase I’s job is to flag conditions that could create legal responsibility, not to fix them or ensure regulatory conformity.