Ever-prolific in establishing standards associated with environmental due diligence in transactions involving real property , ASTM has adopted yet another standard for owners and potential owners of properties with historic contamination or Recognized Environmental Conditions (“RECs”). The new standard, entitled “Standard Guide for Identifying and Complying with Continuing Obligations” ASTM E2790-11, uses an awkward definition of “continuing obligations,”  which causes the title to be misleading -- basically the Standard provides guidance on identifying , monitoring and documenting compliance with Environmental Land Use Controls (“ ELUCs”); Activity and Use Limitations (“AULs”) and institutional controls (legal restrictions such as deed restrictions or use of municipal ordinances to restrict groundwater use) which may be extablished on a property. It can also be used for demonstrating compliance with terms and conditions in No Further Rediation (“NFR”) or No Further Action (“NFA”)-type letters and any conditions in Consent Agreements, Orders, or similar legal obligations applicable to environmental conditions on property.
The stated purpose of ASTM E2790 is to help property owners identify and comply with legally-established obligations and limitations on use of property, so that the owners can meet the CERCLA landowner liability protections known as the innocent landowner/innocent purchaser defense, contiguous property owner defense, and bona fide prospective purchaser defense). The new Standard is intended to apply to sites with hazardous substances as well as petroleum products, and applies to CERCLA as well as non-CERCLA properties.
To document a property owner has satisfied the conditions precedent to establishing the CERCLA landowner liability protections, the new ASTM E2790-11 identifies an oddly redundant 4-step process for developing a “continuing obligation plan” and documenting implementation of the plan:
Step 1: identification of any continuing obligations applicable to the property (such as found in ELUCs,AULs, institutional controls or terms and conditions set forth in No Further Remediation or No Further Action Letters, Consent Agreements and Orders, deed restrictions);
Step 2: evaluation of the RECs identified in the Phase I and any continuing obligations associated therewith;
Step 3: selection of the continuing obligations that must be “performed;” and
Step 4: establishment of a system for monitoring continuing obligations.
Once the RECs and continuing obligations have been identified and the recommended “continuing obligations plan” has been developed (there is also guidance on to prepare such a plan) ASTM E2790 describes how to implement the plan and provides guidance on how to document performance of or compliance with any continuing obligations. Appendices to the guidance include suggested forms for conducting inspections at simple, as well as complex, sites, a flow chart for determining applicability of the various provisions of the Standard, and example scenarios explaining how the Standard would apply to the scenarios.
The utility of the new ASTM standard remains to be seen. Existing facilities, particularly those already involved in brownfield remediation programs and state voluntary cleanup programs which have been issued some form of NFR or NFA are most likely aware they are subject to “continuing obligations,” and already have procedures in place to ensure such obligations are met. The same is likely true for facilities subject to settlement agreements with USEPA or states in the form of consent or compliance orders or agreements; such facilities most likely already have programs in place to ensure they meet environmental obligations applicable to their particular situation. Moreover, many consulting firms offer services designed to identify, monitor and track compliance with ELUCs, AULs, institutional controls and terms and conditions of NFRs, NFAs, Orders and Agreements. Because the potential users of the new standard are likely to be environmentally savvy, they will not need the guidance of the standard. Furthermore, there is no indication that any state or other jurisdication will reference or recommend use of the ASTM E2790 Continuing Obligation Standard as a due diligence standard or as a condition of establishing CERCLA-type landowner liability defenses. For these reasons, ASTM E2790 will not likely take on the significance of the ASTM E1527 Standard for Phase I Assessments.