ASTM E1527 Changes: Coming Soon to a Property Assessment Near You

Lenders, Developers, Environmental Professionals and others over the years have come to know the industry standard for conducting and reporting environmental due diligence, “ASTM E1527 Standard Practice for Environmental Site Assessment: Phase I Environmental Site Assessment Process”.  E1527 (commonly referred to as a “Phase I”) was designed by ASTM International to meet the requirement under CERCLA (or, “Superfund”) that a party conduct all appropriate inquiry (“AAI”) prior to a real property transaction in order to qualify for an exemption from liability for site cleanup costs.  CERCLA imposes joint and several liability on responsible parties (or potentially responsible parties) for the cleanup of contaminated sites.  First released in 1993, ASTM E1527 is the Environmental Protection Agency’s approved AAI standard.  The current standard, E1527-13, is set to sunset on Dec. 31, 2021.  A new standard is expected to be released this year, with several notable changes anticipated.

Time for a New Standard

E1527 has evolved over the years, with revision in 1994, 1997, 2000, 2005, and most recently in 2013.  In anticipation of the sunsetting of E1527-13, ASTM established a renewal committee, with the assistance of volunteer focus groups comprised of environmental professionals, lenders, attorneys, and other stakeholders.  The committee met throughout 2018, 2019, and 2020 to discuss revision.  A draft of the new standard was expected in January 2021, which would have given EPA almost a year to review and approve it.  With that deadline having come and gone, the regulated community is left still speculating on imminent changes.

Anticipated Changes to E1527

What we do know about the anticipated new standard is that several revisions to E1527-13 are likely.  Among the most widely predicted changes are:

• Clarifying and providing examples of “CRECs” (Controlled Recognized Environmental Conditions) which are determined to no longer pose a risk to human health
• Requiring that observations and negative observations in site visits be documented by photographs and described in the body of the report
• Recognition and handling of the increased use of aircraft and drones in site evaluation
• Inclusion in the report of information about who conducted site visits and interviews, including qualifications of environmental assessor
• 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
• The addition or clarification of several definitions, including “Significant Data Gap,” “Historic Recognized environmental Condition,” “Controlled Recognized Environmental Condition” and “Activity and Use Limitations”
• Clarification of site versus property versus subject property
• Discussion of “emerging contaminants,” including clarification that per- and polyfluoroalkyl substances (“PFAS”) are outside the scope of the standard

Some of these changes clearly are designed to improve longstanding E1527 protocol, while other address new and emerging considerations in real property assessment.

Once the new standard is released, stakeholders will need to become familiar with the changes ultimately adopted and be certain their advisors are as well.