Anyone involved with commercial and industrial real estate transactions should keep an eye out for the updated ASTM Standard for “Phase I Environmental Site Assessments” (ESAs).
The new standard (ASTM E1527-21) is due for publication within the next 4 to 5 months.
Key changes to E1527 are anticipated to include:
- Clarification of the term “material threat” in the definition of a condition being considered a Recognized Environmental Condition (REC).
- Significant clarification of when a REC should be identified as a Controlled REC (CREC).
- Significant clarification of when a previous release can be identified as a Historic REC (HREC).
- Emphasis that a previously identified CREC or HREC can be re-classified as a REC if site conditions or regulations have changed.
- Emphasis of the need for a robust investigation of adjoining properties and the surrounding area, and the potential for them to impact the subject site.
The classification of RECs, CRECs, and HRECs is up to the judgment of the Environmental Professional. But the updated standard specifies that these classifications are to be determined using a multi-step process that is reflected in the report’s Findings and Opinions section of the report, including the rationale for each determination.
Important Takeaway For all Users of a Phase I ESA Report: Don’t just read the Conclusions and/or Executive Summary sections of the report!! It is also important to read the Findings and Conclusions section of the report, as some of the most revealing information may be found there.
It is likely that the updated standard will also maintain some existing provisions, including:
- Confirmation that the viability of an ASTM Phase I ESA Report expires after 180 days, and
- Emphasize that the User of the Phase I Report is responsible to review title information for activity and use limitations and liens.