Gavel to Gavel: Check Your Standards

By December 2021 the American Society of Testing and Materials (ASTM) Standards for Phase I Environmental Site Assessment (ESA) reports (E1527) will be updated per a mandatory eight-year revision cycle. Lenders, developers, environmental professionals (EP) and others know EE1527 as the industry standard for conducting and reporting environmental due diligence for real estate, commonly referred to as a Phase I. ASTM designed the standard to meet requirements under CERCLA (or Superfund) that a party conduct all appropriate inquiry (AAI) prior to a real property transaction to qualify for an exemption from liability for site cleanup costs.

The 2021 draft version E1527-21 proposes to assess new and existing human health risks and environmental liabilities, regulate the Phase I process based on modern science and laws, and to deliver higher-quality environmental due diligence.

Some of the most widely predicted changes include:

  • Observations, positive and negative, in site visits must be documented by photographs and described in the report.
  • Increased use of aircraft and drones in site evaluation must be addressed.
  • Emerging contaminants such as PFAS, currently an issue in many states, should be addressed in the Phase I ESA as a non-scope consideration. Users should be alert to adding PFAS as a non-scope item to their consultant’s scope of work.
  • Clarify that the 180-day or one-year shelf life of the report begins to run from the date the first task is conducted (interviews, records reviews, visual inspection or EP declaration), by requiring dates of each activity in the ESA.
  • Clarify that Environmental Lien Title Reports must search land records back to 1980 for potential restrictions on title. Running a title search back to the last change in title will be insufficient and can provide purchasers a false sense of security.
  • The addition or clarification of several definitions, including “Significant Data Gap,” “Historic Recognized Environmental Condition,” “Controlled Recognized Environmental Condition,” and “Activity and Use Limitations.”
  • Increased requirements for the scope of historical research, including mandating historical research on adjacent and surrounding sites and the use of aerial photographs, fire insurance maps, city directories, and topographic maps as standard Phase I historical research.

All users of Phase I reports should check the E1527-21standards for important changes.

This article first appeared in The Journal Record on August 18, 2021, and is reproduced with permission from the publisher.