October 15, 2013

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As we first reported late last year, the American Society for Testing and Materials (“ASTM”) is revising the standard governing Phase I Environmental Site Assessments, ASTM E1527.  In connection with that process, the Environmental Protection Agency (“EPA”) proposed in mid-August that compliance with either the new standard, ASTM E1527-13, or the old standard from 2005, ASTM E1527-05, would satisfy the “All Appropriate Inquiries” rule and qualify entities purchasing land for certain immunities from liability in the event the land is later determined to be contaminated.  In proposing that a Phase I conducted under either standard would suffice, EPA concluded that there were no “legally significant differences” between E1527-13 and E1527-05.  EPA’s own “Summary of Updates and Revisions” to ASTM E1527 may be downloaded here.

Public comment to the proposed rule was significant and negative, leading EPA to withdraw it in September.  Commenters suggested EPA should choose either the old standard or the new and avoid creating a “two-tiered” due diligence system.  EPA will now be engaging in the full formal rulemaking process, providing further opportunities for public comment before any new rule is adopted.

For the time being, parties engaged in real estate transactions involving a Phase I assessment should be aware of the uncertainty surrounding E1527 and evaluate what steps to take in response.

We will be providing more information soon about the specific changes to ASTM E1527, and we will also continue to update this blog with information about the rulemaking process at EPA.