Phase I Environmental Site Assessment ASTM Standard Update
Last fall ASTM International approved an updated version of ASTM E1527, the standard governing how Environmental Professionals conduct Phase I Environmental Site Assessments (ESAs). The updated ASTM E1527-21 is expected to be adopted by the Environmental Protection Agency (EPA) sometime in 2022 to formally identify ASTM E1527-21 as compliant with EPA’s All Appropriate Inquiries (AAI) rule. AAI requirements apply to prospective landowners and operators in commercial real estate transactions who may want to claim certain statutory protections from CERCLA cleanup liability as an innocent landowner, contiguous property owner or bona fide prospective purchaser.
Although EPA has not yet adopted ASTM E1527-21, the updated standard currently defines “good commercial and customary practice in the United States of America for conducting an environmental site assessment of a parcel of commercial real estate. . ..” It may help to meet with your Environmental Professional early in the due diligence process to discuss how the new standard impacts Phase I ESA scope considerations, documentation, turn-around time, and pricing factors.
Some of the changes in ASTM E1527-21:
Definitions of REC, CREC, and HREC are updated for clarity. For example, a CREC or Controlled Recognized Environmental Condition is when contamination has been addressed to regulatory closure through property use limitations or other controls. For an HREC or Historical Recognized Environmental Condition, contamination remains with the approval of the regulating agency, but without any use restrictions or other controls. The rationale for the CREC and HREC determinations are a “multi-step process that shall be reflected in the report’s Findings and Opinions sections.”
More emphasis is placed on the requirements to review additional historical sources for prior uses of the subject property and adjacent properties.
Emerging contaminants, which are not CERCLA hazardous substances are specifically discussed as “non-scope” considerations. PFAS, the pervasive, emerging contaminants making headlines and regulated by many states, are emphasized as an example.
The updates clarify and extend the User obligation to obtain and search title or judicial records to identify any land use or activity restrictions or environmental liens on the subject property. These searches are the responsibility of the User, rather than the Environmental Professional, and are usually done through third-party vendors. ASTM E1527-21 also specifies that the search should include land title records for documents recorded back to 1980, the year CERCLA was enacted.
The valid Phase I ESA report period of 180-days prior to the transaction is clarified to confirm that the clock starts on the earliest date that certain information is collected and not the date that the report is issued.
More discussion is provided on data gaps and the documentation required by the Environmental Professional in determining the significance of a data gap.
These are just a sampling of the changes in ASTM E1527-21 that seek to clarify information collection, analysis, and documentation for Phase I ESA services. Before the rush of the next transaction, consider contacting your environmental due diligence professionals to discuss ASTM E1527-21 and how services and Phase I ESA reports are changing.