The New ASTM E1527-21 Standard is Here!

Every 8 years, the ASTM Standard in use undergoes a thorough review by a committee of peers from various backgrounds including but not limited to lenders, attorneys, and consultants. They gather to discuss and debate the ASTM Standard in order to ensure the ASTM provides good clarification to language, improving consistency in the deliverables by environmental professionals, and ensuring the standard is in “good commercial and customary practice.”

The majority of commercial real estate (CRE) transactions require the completion of a Phase I Environmental Site Assessment (ESA) in order to identify existing and potential environmental impact liabilities at a property.

We are currently transitioning from the old ASTM E1527-13 standard to the new E1527-21 standard which would impact approximately 250,000 CRE transactions a year post-implementation. The changes made to produce the E1527-21 standard are not considered major changes in the grand scheme of things, but the overall impact could be felt by all due to the level of effort needed depending on the property type and location of the subject property itself.

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)

In order to qualify for liability protections under CERCLA, ASTM E1527-21 expands the research requirement for the subject property and adjoining properties in all directions. The primary difference is in the level of effort of research needed to be completed by the Environmental Professional (EP). For instance, depending on the complexity of the subject property and surrounding adjoining properties, the level of effort of research required by the EP will change. The EP cannot just research the subject property and be done. The EP must put forth reasonable effort to acquire the information needed to eliminate an adjoining property as a concern or recognized environmental condition, if a release was confirmed on the adjoining property.

The reasonable effort does not mean one phone call or one submittal for information, the resource must be exhausted, or a reasonable level of effort made to close the data gap. This may require an EP to get creative in finding ways to acquire information. Not long ago, it was common to walk into a building and ask a person directly, but the advancement of technology, and in recent years, the COVID-19 pandemic has all but changed the mindset to online-only information. But nothing says you cannot walk into a building or library anymore, except if there is a department policy in place stating the request must be made online first. But there are still several places to find information outside the standard city departments and online information. If is it an older property, historical societies or local museums may contain reliable information. In all, the more densely developed the area, the more effort and level of research will be needed and this could be reflected in the cost to the Client and/or User of the report.

Recognized Environmental Condition Types

A new benefit of the E1527-21 Standard is the provided examples of RECs, Historical Recognized Environmental Conditions (HRECs), Controlled Recognized Environmental Conditions (CRECs) and Business Environmental Risks (BERs) in the appendices. These new examples showcase how to categorize the identified issue. For example, a release that was closed without restriction and below residential standards would be a HREC. On the flip side, a release closed with restrictions, even if implied, would be a CREC. An implied control could be as simple as the site is industrial and closed under industrial standards. This is a CREC because it was not closed to unrestricted use, but to industrial use only, making this an implied control even if not a deed-recorded activity use limitation, but an implied land use restriction.

Another change to the 21 Standard is the addition of the section entitled Emerging Contaminants. The purpose of this section is to address the growing concern of per and polyfluoroalkyl substances (PFAS/PFOS). PFAS/PFOS are not classified as hazardous substances by the EPA yet and are not considered a REC within a Phase I ESA. But as PFAS/PFOS and other emerging contaminants are not RECs at this point, the EP and the client/user may want to discuss this ASTM non-scope item as a BER, similar to asbestos containing materials (ACM).

Relying on a Phase I ESA Report

A common question asked about a completed Phase I ESA, is how long is it good for? Well, the answer to that has always been 180-days and then after one year the report bust be completed in full. The newly revised ASTM requires the inclusion of the date upon which the relevant parts of the investigation were completed, such as, order date of the database search, date of the lien search, date of the site visit, etc. The ASTM clarifies that the earliest date of these relevant sections is the “start” of the 180-days of validity, not the date of the final report itself.

There have been multiple definition changes and/or clarifications and my colleague Nicole Moore has outlined these HERE along with additional in-depth information on the changes in the new ASTM E1527-21 Standard.