In November 2013, the American Society of Testing and Materials (ASTM) revised their “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” standards for conducting Phase Is. The new standards, which are set forth in ASTM E1527-13, and update the 2005 standards set forth in ASTM E1527-05, apply to all Phase I environmental site assessments performed after November 1, 2013. The updated standards can be found here:

There are several key revisions to the new E1527-13 standards. 

  • Several definitions have been clarified to eliminate confusion among environmental professionals on how to categorize identified conditions. For example, the definition of a “recognized environmental condition” or “REC” has been shortened and made more clear. The definition of “historic recognized environmental conditions” or “HREC” has also been clarified to include past releases that have already been addressed to the satisfaction of regulators or that otherwise satisfy standards for unrestricted use, but do so without the necessity of institutional controls (such as deed restrictions against digging or restrictions on the use of groundwater). 
  • Some key terms were added for the first time. The term “controlled recognized environmental conditions” or “CREC,” (which is defined as a past release that has been addressed to the satisfaction of regulators, but where some level of contamination is allowed to remain on site because institutional controls are in place to address environmental concerns) has been added to distinguish such conditions from historic RECs. A separate, stand-alone definition for “De Minimis Conditions” has also been included for the first time. Further, the definition of “release” was revised to have the same meaning as under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA” or Superfund). 
  • The potential for vapor intrusion must now be evaluated as part of a Phase I, as the definitions of “migrate” and “migration” have been revised to include the intrusion of vapors from petroleum products or other hazardous substances. 
  • Environmental professionals performing Phase I assessments are now required to review a broader range of public agency records and files, in certain circumstances. For example, if the subject property or adjoining property is identified on one or more of the standard environmental records sources, the environmental professionals must review the related regulatory files to assess the issue prompting the listing. If the environmental professional determines that a records review is not warranted, the updated standard requires the written Phase I report to include a justification for omitting this review. 

The United States Environmental Protection Agency (“USEPA”) previously recognized that the older ASTM E 1527-05 standard may be used to satisfy the “All Appropriate Inquiries” (“AAI”) requirement necessary to qualify for the innocent landowner, contiguous property owner, or bona fide prospective purchaser limitations on liability under CERCLA. To establish these CERCLA liability protections, anyone purchasing commercial real estate must make an “appropriate inquiry” into the environmental condition and current and past uses of the property to assess environmental risks. 

On December 30, 2013, the USEPA issued a final rule confirming that the new ASTM E1527-13 standard is also acceptable for establishing that the AAI requirements have been met. However, USEPA did not, at the same time, remove the reference to the older standard in the AAI regulations. Thus, the AAI rules currently recognize both the 2005 and 2013 versions of the ASTM standards for satisfying AAI requirements. The USEPA has, however, stated its preference for the updated ASTM E1527-13 standard, as it improves upon the previous standard and reflects the evolving best practices that will afford prospective property owners necessary and essential information when making real estate decisions and meeting CERCLA liability protections. USEPA has also stated its intention to publish a proposed rule in the near future to amend the AAI final rule to remove the previous reference to the older ASTM E1527-05 standard. 

Given USEPA’s preference for the updated ASTM E1527-13 standard, and the fact that reference to the 2005 standards in the AAI regulations could be eliminated, it is advisable for prospective purchasers and environmental professionals to use the updated 2013 standards when performing Phase I environmental assessments.