On December 30, 2013, the EPA approved the use of a new ASTM Phase I environmental site assessment standard, E1527-13 ("2013 Standard"), in order to satisfy the CERCLA "all appropriate inquires" rule and qualify for certain liability defenses, such as the contiguous property owner defense, and innocent and bona fide purchaser safe harbors. The EPA, however, did not rescind its endorsement of the previous standard, E1527-05 ("2005 Standard").
The EPA indicated it would rescind its endorsement of the previous standard in the "near future", but it is unclear exactly when the EPA will act. Until it does, investors, lenders, borrowers, developers and other prospective property purchasers will now have to select which standard to use in performing environmental due diligence in connection with real estate acquisitions.
In its approval, EPA encourages use of the 2013 Standard. The 2013 Standard is intended to provide users with more thorough and complete information about the presence of recognized environmental conditions than may be provided under the 2005 Standard. This additional information provided by the 2013 Standard may well come at an increased cost and a lengthened time to complete.
In some instances, the additional cost or time may not be justified. Prospective property owners may want to minimize costs for what may be characterized as low risk, low benefit information and prefer to use the 2005 Standard. [More ...]
What Should You Do?
Prospective property owners should familiarize themselves with the 2013 Standard, and its differences from the 2005 Standard, in order to make informed decisions on which standard to employ when investigating property and seeking to qualify for CERCLA liability defenses. If you are acquiring new property, the experienced attorneys at Polsinelli can assist you in properly investigating all environmental issues and enabling you to satisfy the "all appropriate inquiries" rule.
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