Real Property “Due Diligence Standard” Change

Wactor & Wick LLP
October, 2013

Status Update on ASTM’s 1527 Standard Practice for Phase I Environmental Site Assessment Process

For the first time since 2005, ASTM International has updated ASTM 1527, which is the legally approved “All Appropriate Inquiry” (AAI) industry standard for conducting Phase I Environmental Assessments. The new standard ASTM 1527-13 is intended to clarify and augment ASTM 1527-05, which was approved by EPA on November 1, 2005 as meeting the AAI requirements under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). ASTM 1527-13 is expected to clarify what is necessary to meet the AAI elements to qualify for the CERCLA liability protections available to innocent landowners, contiguous property owners, and bona fide prospective purchasers of contaminated brownfield properties.

1. What Changes Does ASTM 1527-13 Make to ASTM 1527-05?

ASTM 1527-13 makes several changes to the definitions contained in ASTM 1527-05:

  • Recognized Environmental Conditions (RECs) would have a streamlined definition, but that does not significantly depart from its prior definition.
  • Historical Recognized Environmental Conditions (HRECs) would be redefined to apply only to sites that have been remediated to unrestricted residential use.
  • Controlled Recognized Environmental Conditions (CRECS) would be added as a new definition, and apply to sites with residual contamination for which property use restrictions, institutional controls or engineering controls are in place.
  • The definition of “release” and “environment” would be clarified as having the same definition as those terms have in the CERCLA statute.
  • The definition of “migrate/migration” would specifically include vapor migrations.

ASTM 1527-13 includes new standards for the following emerging issues:

  • Vapor Intrusion concerns are expressly addressed in this new standard by stating that contaminants that may migrate from the subsurface in vapor are RECs.
  • Regulatory File Review standards will place greater responsibility on the environmental professional performing the Phase I to justify instances where file reviews are not performed for adjacent properties.

2. What is the Current Status of EPA’s Actions on ASTM 1527-13?

On August 15, 2013, the United States Environmental Protection Agency (EPA) proposed a direct final rule in a Federal Register Notice, to formally recognize ASTM 1527-13 as satisfying the AAI requirements under the CERCLA. EPA accepted public comments through September 16, 2013. Amongst comments received, however, the industry professionals criticized EPA’s position of allowing environmental professionals the option of using the less rigorous, older ASTM 1527-05 standard in lieu of the new ASTM 1527-13 standard. As such, we anticipate that EPA will formally withdraw its proposed rule before it becomes effective on November 15, 2013 in order to resolve these and other comments. Please free to check back with us for additional updates.

Wactor & Wick LLP is an experienced environmental law firm which has helped many property owners solve the business, practical and regulatory issues associated with property transactions involving potentially contaminated properties. Peter Ton or Jon Wactor of Wactor & Wick LLP can be reached at or with any questions.