EPA Issuing New Rule on Phase I Environmental Site Assessments. What does it mean for my real property purchase?
At some point in nearly every real estate purchase, a buyer should consider whether or not to order a Phase I Environmental Site Assessment. Why? Well, primarily to avoid potential liability for the cleanup of contaminants on the property. Under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), the EPA can require an owner (regardless of whether or not they caused the contamination) to clean up the property.
This includes a purchaser that does not investigate a contaminated property prior to buying it!
Protection from liability for innocent land purchasers under CERCLA can generally be achieved by meeting the requirements of the “all appropriate inquires” rule. That rule requires that the purchaser conduct a Phase I site assessment prior to taking ownership of the property in accordance with standards set forth by the EPA. On August 15, 2013, the EPA issued a direct final rule amending the Standards and Practices for All Appropriate Inquires.
The new rule will allow the additional option of using the recently revised ASTM standard E1527-13 to satisfy the “all appropriate inquires” rule. Any party who wants to claim protection from liability under CERCLA’s landowner liability protections may still follow the regulatory requirements outlined in 40 CFR part 312, use the ASTM E1527-05 standard, the ASTM E2247-08 standard, or the new ASTM E1527-13 standard.
Basically, the new rule provides additional flexibility for those industry professionals that conduct Phase I Environmental Site Assessments. If you are in the process of purchasing real property and conducting a Phase I, my suggestion is that you speak with your environmental consultant to determine if this new standard is a good option for your particular land transaction.