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EPA Endorses New Phase I Environmental Site Assessment Standard

The U.S. Environmental Protection Agency (EPA) on August 15, 2013, issued a direct final rule endorsing an alternative standard for environmental due diligence investigations, known as ASTM E1527-13. The rule will be effective on November 13, 2013 unless the EPA receives adverse comments by September 16, 2013.

Although the new standard largely keeps the same framework provided in the current standard (E1527-05), a few differences could impact the decision of which standard to use. Key differences include the following:

  • The definition of a historical recognized environmental condition (HREC) is clarified to apply only to sites where past contamination has been completely addressed without any restrictions. A new phrase, “controlled recognized environmental condition” (CREC), now applies to sites that have been remediated, but where some contamination remains in place subject to land use or engineering controls. These changes likely will increase the number of recognized environmental conditions (RECs) identified in a Phase I report, but will provide more specific information about those RECs, which can help prospective purchasers and lenders make decisions regarding a site.
  • E1527-13 adds an explicit obligation to consider possible indoor air issues from vapor intrusion if there is subsurface soil or groundwater contamination. This likely will increase the cost of Phase I assessments by requiring more extensive investigation of sites with volatile contaminant issues, such as former dry cleaners.
  • E1527-13 requires environmental professionals to more carefully consider whether regulatory file reviews are warranted for adjacent properties and to explain a decision not to conduct a file review. Additional file reviews will increase the cost of the Phase I assessment but will also provide a deeper understanding of the site.

Parties should consider these differences in choosing which standard is most appropriate in the context of their particular transaction.

For more information, contact Michael C. Powell and Todd R. Chason.


Michael C. Powell
410-576-4175 •

Todd R. Chason
410-576-4069 •