In follow-up to our August 16, 2013, blog regarding the EPA’s Direct Final Rule installing the new ASTM E1527-13 as an alternative, updated process for conducting Phase I environmental due diligence, it should be noted the Agency has indicated (in an email to BNA reporter Pat Ware) that it will WITHDRAW that rule.

The ASTM E1527 standard is identified in 40 CFR Part 312 as the standard to be followed to ensure a user of the standard can assert Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) affirmative defenses (innocent purchaser and bona-fide prospective purchaser defenses) to CERCLA liability for contaminated real property,  The ASTM E1527 standard is universally used in real estate transactions to assess environmental conditions on properties subject to transactions.

The withdrawal is based on comments received by EPA which criticize not just the terms and conditions of the 2013 version of the ASTM standard, but EPA’s interpretation of how and when the new standard can be used. BNA reports that comments were received which criticized the Agency’s position that users may rely on either the 2005 or the 2013 versions of the standard when performing Phase I assessments. The BNA reported criticisms suggest that because the 2013 standard will be more expensive, institutional users of the standard (e.g. lenders) who tend to be high-volume purchasers of consulting services for Phase I assessments will continue the use of the 2005 standard, which is less expensive, thus rendering the 2013 standard at best moot, but most likely, confusing and potentially controversial to the myriad users of Phase I reports.

It is expected that consultants who have been gearing up for the new 2013 standard which was anticipated to become effective late this fall, will fall back for now and will be proposing services based solely on the 2005 standard.