Buying Real Estate? Know the EPA’s All Appropriate Inquiries Rule

Buying Real Estate? Know the EPA’s All Appropriate Inquiries Rule

The Environmental Protection Agency (“EPA”) promulgated its standards for “All Appropriate Inquiries”  when it comes to buying real estate with the intent of defining the level of environmental due diligence required to provide the buyer of the property protection under CERCLA’s “innocent purchaser” defense. The criteria for satisfying the innocent landowner defense are set forth in 42 U.S.C. §§ 9607(b)(3) and 9601(35)(B) and 40 CFR 312.20.

The EPA published a new revision of the All Appropriate Inquiries rule, which became effective December 30, 2013. The revision provides parties purchasing real estate property that is potentially contaminated with the option of using the ASTM E1527-13 standard when conducting environmental due diligence. However, the rule does not mandate that purchasing parties use this standard. They have the option  of continuing to use the existing ASTM E1527-05 standard.

Some of the more significant changes in the new ASTM E1527-13 standard are:

•  A new recommendation for the consultant conducting the Phase I to review regulatory files if the target property or adjoining properties appear in a public database listing;
• A new requirement to evaluate the potential for hazardous vapors to migrate onto the target property;
•  A revised definition of Historical Recognized Environmental Conditions (HREC) as a past release that has been addressed to the satisfaction of a regulatory authority or meets unrestricted use criteria. Consequently, conditions considered as an HREC under the former ASTM 1527-05 may be considered as a Recognized Environmental Condition (REC) under the new ASTM 1527-13, triggering additional investigation.