Contributed by Bradley S. Tupi

Buyers of real estate and their lenders are familiar with the Phase I Environmental Site Assessment.  Originally developed in the 1980s in response to the CERCLA statute, the Phase I protocol has been refined over the years.  EPA got into the Act in 2005, promulgating standards for “All Appropriate Inquiries.”  The idea of the EPA regulation was to define the level of environmental due diligence necessary to give a property purchaser protection under CERCLA’s “innocent purchaser” defense.

Effective December 30, 2013, EPA published a new revision of the All Appropriate Inquiries rule.  It is available at 78 Fed. Reg. 79321.  It offers parties purchasing potentially contaminated properties the option of using the ASTM E1527–13 standard when conducting environmental due diligence.  The rule does not require use of this standard; parties may also follow 40 CFR Part 312.

The ASTM E1527–13 standard uses the expression “Controlled Recognized Environmental Condition,” which refers to sites where governmental authorities have allowed hazardous substances or petroleum products to remain in place subject to certain restrictions, such as engineering controls or property use restrictions.  The Phase I report must highlight this so that developers will be aware of the restrictions before they purchase or improve a property.

The ASTM E1527–13 standard is more rigorous with respect to vapor intrusion.  Vapor intrusion refers to the possibility that vapors from subsurface contaminants may pass through the wall of a structure and come into contact with persons within.  All appropriate inquires and Phase I Environmental Site Assessments must now include assessment of the real or potential occurrence of vapor releases at or into the subject property.

Your Tucker Arensberg environmental attorney will guide you through these changes as they apply to your next transaction.