EPA Approves Amendments Regarding “All Appropriate Inquiry” for Protection of Purchasers of Property from CERCLA Liability

On December 30, 2013, the USEPA amended the Standards and Practices for All Appropriate Inquiry Rule (“AAI”) which addresses the manner by which a prospective purchaser can assess the environmental conditions of a property in order to receive liability protections afforded under Section 101(35) of CERCLA. This rule and these protections apply to bona fide prospective purchasers, contiguous property owners, or innocent landowners as set forth in the Small Business Liability Relief Revitalizations Act, commonly known as the Brownfield Amendments to CERCLA. The new rule provides for the use of ASTM International’s E1527-13 “Standard Practice fir Environmental Site Assessments: Phase 1 Environmental Site Assessment Process” to satisfy the AAI requirements of CERCLA. Although the rule does not explicitly supersede the prior standard, ASTM-1527-13, the new standard has been strongly recommended by the EPA; further, the EPA expressed its intent to publish a proposed rulemaking to remove the older standard. Under the prior rule, adopted in 2005, prospective purchasers could either conduct a Phase 1 environmental site assessment pursuant to the AAI Final Rule, or comply with two ASTM standards which were recognized as equivalent to the AAI Final Rule: ASTM E1527-05 “Standard Practice fir Environmental Site Assessments: Phase 1 Environmental Site Assessment Process,” and ASTM E2247-08 “Standard Practice fir Environmental Site Assessments: Phase 1 Environmental Site Assessments for Forestland or Rural Property,” as applicable. ASTM E1527-13, the new standard, clarifies the 2005 standard by revising the definitions of “Recognized Environmental Condition” (“REC”), “Historical Recognized Environmental Condition” (“HREC”) and “Controlled Recognized Environmental Condition” (“CREC”). ASTM E1527-13 also adds standards for evaluating the potential for vapor intrusion in a Phase 1 ESA, and revises standards for regulatory file review. The new standard for RECs and HREC, as well as the addition of CREC are expected to help developers and lenders distinguish between sites impacted by releases or threatened releases of hazardous substances, previously contaminated sites that have been cleaned up, and sites that have obtained regulatory closure despite the presence of residual contamination, such as sites subject to institutional or engineering controls. The revised definition of REC does not have any significant substantive changes, it rather presents the standard differently in an effort to remove some ambiguity, and, according to EPA, better comports with the objective of AAI as set forth in regulations. The definition of HREC is intended to apply to releases that have been cleaned up and have received regulatory closure, such as a no further action (NFA) letter or determination. The definition in the 2005 rule, however, has caused confusion in such circumstances as where regulatory closure was obtained with residual contamination remaining on-site, because such a scenario could potentially qualify as both an REC and an HREC. The revised definition clarifies that HRECs apply only to sites were contamination has been remediated to an unrestricted residential use. The new definition, CREC, applies to sites with residual contamination that have been closed in accordance with risk-based criteria and may present future obligations for the land owner. As Vapor Intrusion (“VI”) has been the subject of greater scrutiny from the regulatory authorities; authorities, lenders and other interested parties have grown concerned about potential effects from vapors as well as the potential impact on property values. The 2005 ASTM standard is ambiguous as to whether a Phase 1 ESA should include assessment vapor intrusion risk. The new standard emphasizes the assessment of vapor intrusion risk. The new standard also differentiates between vapors attributable to hazardous-waste releases such “non-scope indoor air quality issues” that are not attributable to hazardous substance releases, such as naturally occurring radon. Finally, the new standard addresses regulatory file review, emphasizing the review of regulatory files for adjacent properties. The standard states that if the target property were adjacent property is identified and governmental records, those “pertinent regulatory files and/or records associated with listing should be reviewed” based upon the environmental professionals discretion. An environmental professional must justify its decision not to conduct a regulatory file review in the Phase 1 report. The new standards do not add anything substantively new to the commonly understood procedures for AIA. They provide some clarification to ensure that the standards are understood and applied in a uniform and definitive manner. DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, PC is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department. The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.


DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum PC (http://www.dbnjlawblog.com) is a full service law firm in New Jersey which provides a broad range of legal services. For additional information about the matters in this bulletin or in the firm’s Employment Practice, please contact Richard P. Flaum, Esq.

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.