Phase I Environmental Site Assessments (Phase I’s) have been the subject of this column in the past. See, for example, BIC’s August 2013 issue (pg. 94). Recent revisions to the standards for Phase I’s have been announced that will lead to more comprehensive Phase Is, which will benefit purchasers/lenders to the potential detriment of sellers/borrowers.
Phase I’s are widely used by real estate purchasers and lenders to discover past uses of property and potential contamination of that property. The requirements for Phase Is are set out in an ASTM standard, No. E1527-05, and EPA’s “All Appropriate Inquiries” Rule (40 CFR Part 312). Compliance with the existing ASTM standard is deemed compliance with the EPA rule. While both the ASTM standard and the EPA rule include specific guidelines and best practices to which an environmental professional conducting a Phase I must strictly adhere, there are differences that make the EPA rule more stringent.
ASTM has just revised Standard No. E1527-05 and will issue a new standard, No. E1527-13, that includes an updated and more detailed set of guidelines and best practices. EPA is expected to recognize or adopt the new standard and it will become the new standard for environmental professionals conducting Phase I’s. This will bring the ASTM standard more in line with the EPA rule. Continue reading “Upgraded Standards for Phase I Site Assessments May Impact Loans and Sales”