Chapter 3 CRI Exam I Environmental
Law and Due Diligence Exam
Questions and Answers 100% Pass
Lender Liability Rule - ✔✔Defines "participation in management" in order to determine
if the lender played a significant role in the transaction, with particular respect to
environmental matters.
Key to not being held liable - ✔✔Take extreme care conducting all environmental due
diligence prior to engaging in business on a property
Phase I Environmental Site Assessment - ✔✔Non-invasive high level inquiry. Site
reconnaissance of subject property and visual inspection of adjacent properties
Phase II Environmental Site Assessment - ✔✔Intrusive. Involves sampling and
laboratory analysis
Phase III Remediation Plan - ✔✔Actual plan to fix what is non-conforming on the
property following a confirmed phase II contamination. Also includes an
implementation plan
Four parts to Phase I ESA - ✔✔i) site reconnaissance
ii) review of historical sources of information
iii)interviews with past and present owners
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, iv) written report preparation and evaluation
Things a Phase I ESA can reveal - ✔✔Water waste, sewer/septic issues, stressed
vegetation, hazardous waste disposal, accurate historical environmental issues and
remedies.
Adjacent property use and concerns
Recognized Environmental Conditions (REC) - ✔✔Presence or likely presence of
hazardous substances released into the environment by the property
De minimis - ✔✔Condition that generally is not a threat to human health or the
environment
Brownfield - ✔✔Site no longer in use after former CRE use due to ESA failure
Conclusions of Phase II ESA - ✔✔3 conclusion:
Property is deemed not to have actionable REC, property has REC however is de
minimis,
property has REC which requires remediation
Things a Phase II ESA can reveal - ✔✔Asbestos, radon, PCBs Petroleum products
Common Hazardous Concerns - ✔✔Underground Storage Tanks, lead-based paint,
asbestos, Radon Gas,Petroleum Product Contamination,
PCBs
Underground Storage Tanks (USTs) - ✔✔Must follow specific requirements prescribed
by the federal government
Lead based paint - ✔✔Must be disposed of, banned in 1978
100% Pass Guarantee Emily Charlene All Rights Reserved © 2025 2
Law and Due Diligence Exam
Questions and Answers 100% Pass
Lender Liability Rule - ✔✔Defines "participation in management" in order to determine
if the lender played a significant role in the transaction, with particular respect to
environmental matters.
Key to not being held liable - ✔✔Take extreme care conducting all environmental due
diligence prior to engaging in business on a property
Phase I Environmental Site Assessment - ✔✔Non-invasive high level inquiry. Site
reconnaissance of subject property and visual inspection of adjacent properties
Phase II Environmental Site Assessment - ✔✔Intrusive. Involves sampling and
laboratory analysis
Phase III Remediation Plan - ✔✔Actual plan to fix what is non-conforming on the
property following a confirmed phase II contamination. Also includes an
implementation plan
Four parts to Phase I ESA - ✔✔i) site reconnaissance
ii) review of historical sources of information
iii)interviews with past and present owners
100% Pass Guarantee Emily Charlene All Rights Reserved © 2025 1
, iv) written report preparation and evaluation
Things a Phase I ESA can reveal - ✔✔Water waste, sewer/septic issues, stressed
vegetation, hazardous waste disposal, accurate historical environmental issues and
remedies.
Adjacent property use and concerns
Recognized Environmental Conditions (REC) - ✔✔Presence or likely presence of
hazardous substances released into the environment by the property
De minimis - ✔✔Condition that generally is not a threat to human health or the
environment
Brownfield - ✔✔Site no longer in use after former CRE use due to ESA failure
Conclusions of Phase II ESA - ✔✔3 conclusion:
Property is deemed not to have actionable REC, property has REC however is de
minimis,
property has REC which requires remediation
Things a Phase II ESA can reveal - ✔✔Asbestos, radon, PCBs Petroleum products
Common Hazardous Concerns - ✔✔Underground Storage Tanks, lead-based paint,
asbestos, Radon Gas,Petroleum Product Contamination,
PCBs
Underground Storage Tanks (USTs) - ✔✔Must follow specific requirements prescribed
by the federal government
Lead based paint - ✔✔Must be disposed of, banned in 1978
100% Pass Guarantee Emily Charlene All Rights Reserved © 2025 2
