©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Chapter 3 CRI Exam I Environmental Law
and Due Diligence. Questions And Answers
|Latest 2025 | Guaranteed Pass.
Lender Liability Rule - Answer✔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 - Answer✔Take extreme care conducting all environmental due
diligence prior to engaging in business on a property
Phase I Environmental Site Assessment - Answer✔Non-invasive high level inquiry. Site
reconnaissance of subject property and visual inspection of adjacent properties
Phase II Environmental Site Assessment - Answer✔Intrusive. Involves sampling and laboratory
analysis
Phase III Remediation Plan - Answer✔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 - Answer✔i) site reconnaissance
ii) review of historical sources of information
iii)interviews with past and present owners
iv) written report preparation and evaluation
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Things a Phase I ESA can reveal - Answer✔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) - Answer✔Presence or likely presence of hazardous
substances released into the environment by the property
De minimis - Answer✔Condition that generally is not a threat to human health or the
environment
Brownfield - Answer✔Site no longer in use after former CRE use due to ESA failure
Conclusions of Phase II ESA - Answer✔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 - Answer✔Asbestos, radon, PCBs Petroleum products
Common Hazardous Concerns - Answer✔Underground Storage Tanks, lead-based paint,
asbestos, Radon Gas,Petroleum Product Contamination,
PCBs
Underground Storage Tanks (USTs) - Answer✔Must follow specific requirements prescribed by
the federal government
2|P a g e
Chapter 3 CRI Exam I Environmental Law
and Due Diligence. Questions And Answers
|Latest 2025 | Guaranteed Pass.
Lender Liability Rule - Answer✔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 - Answer✔Take extreme care conducting all environmental due
diligence prior to engaging in business on a property
Phase I Environmental Site Assessment - Answer✔Non-invasive high level inquiry. Site
reconnaissance of subject property and visual inspection of adjacent properties
Phase II Environmental Site Assessment - Answer✔Intrusive. Involves sampling and laboratory
analysis
Phase III Remediation Plan - Answer✔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 - Answer✔i) site reconnaissance
ii) review of historical sources of information
iii)interviews with past and present owners
iv) written report preparation and evaluation
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Things a Phase I ESA can reveal - Answer✔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) - Answer✔Presence or likely presence of hazardous
substances released into the environment by the property
De minimis - Answer✔Condition that generally is not a threat to human health or the
environment
Brownfield - Answer✔Site no longer in use after former CRE use due to ESA failure
Conclusions of Phase II ESA - Answer✔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 - Answer✔Asbestos, radon, PCBs Petroleum products
Common Hazardous Concerns - Answer✔Underground Storage Tanks, lead-based paint,
asbestos, Radon Gas,Petroleum Product Contamination,
PCBs
Underground Storage Tanks (USTs) - Answer✔Must follow specific requirements prescribed by
the federal government
2|P a g e
