Key Changes to ASTM E 1527-13

The All Appropriate Inquiries Rule at 40 CFR Part 312 (“AAI Rule”) protects prospective purchasers of property from liability under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) for certain environmental conditions if the prospective purchaser conducts an investigation that meets the requirements of the AAI Rule. The AAI Rule provides that prospective purchasers who comply with specified industry standards issued by the American Society for Testing and Materials (“ASTM”) are deemed to have complied with the AAI Rule.On December 30, 2013, the U.S. EPA formally recognized a new standard (ASTM Standard E1527-13) to demonstrate compliance with the All Appropriate Inquiry (AAI) Rule when conducting Phase I Environmental Site Assessments.  The ASTM E1527-13 Standard is similar to the previous ASTM E1527-05 Standard and was issued by ASTM International in accordance with its protocol for review of its standard practices and guides. The EPA recommends that environmental professionals and prospective purchasers use the ASTM E1527–13 standard; however, the old standard is not yet invalid for purposes of AAI and won’t be until EPA formally amends the AAI Rule to remove the current reference to it.  The new Standard introduces several changes to the Phase I assessment process.


 Key Changes to the Standard

 There are three major changes in the new Standard: 

 Changes to the definitions of Recognized Environmental Condition (REC) and Historical Recognized Environmental Condition (HREC), and the introduction of the term Controlled Recognized Environmental Conditions (CRECs). 

  1. Clarifications regarding vapor migration/intrusion assessment requirements.
  2. Requirements pertaining to Regulatory Agency File Reviews.

 The major changes are summarized below.



The new Standard revised the definition of the terms regarding Recognized Environmental Conditions.  The new Standard simplifies the definition of a REC, to align more closely with the AAI rule, as a release, a likely release, or a material threat of a release of hazardous substances to the environment on the property. The revised Standard also modifies the definitions of “release” and “environment” to more closely track the definitions of those terms as set forth in CERCLA.  Although the definition of a REC has been simplified, its application in practice should be largely unchanged.

 The definition of an HREC has been modified to apply only to historic releases, which have been remediated to the satisfaction of regulatory authorities for unrestricted use.  Thus, the new Standard limits an HREC to past releases that do not subject the property to any use restrictions, activity and use limitations (AULs), or other engineering or institutional controls.  The new definition also requires that the environmental professional evaluate whether releases that were addressed in the past may be subject to revised cleanup criteria that could require further remedial action (if residential criteria has become more restrictive the HREC could potentially become a REC). Although some environmental professionals routinely conducted an analysis of current regulatory cleanup standards for HRECs, the new Standard makes this exercise mandatory to comply with the AAI Rule for the first time.

 Following the revised definition of an HREC is the new category of releases called a CREC. This term is newly added to describe releases that have been addressed to the satisfaction of regulatory authorities, but from which residual contamination has been permitted to remain in place subject to the implementation of use restrictions, AULs or other institutional or engineering controls on the subject property.  Because a CREC is a new type of REC (whereas the new definition of an HREC is no longer considered a REC), the new Standard requires that the condition also be identified as a REC in the conclusions section of the Phase I report.  Under the prior standard, these types of controlled, known conditions were often characterized as HRECs, since regulatory closure had been achieved.  These conditions are now considered RECs, and may have a practical impact on transactions in the form of financial holdbacks or escrow demands, insurance coverage exclusions or limitations, or requests for sale price or lease concessions.


Vapor Migration

 The new Standard indicates the need to clarify that the potential for vapor migration must be considered in the Phase I report.  The definition of “migrate” now expressly includes releases that migrate in the subsurface as vapor. Consultants preparing Phase I assessments under the updated standard will need to assess possible indoor air quality impacts from vapor intrusion pathways if there is subsurface soil or groundwater contamination at or near the subject site. The standard explicitly states that ASTM E2600 is not a requirement of a Phase I ESA (E1527). ASTM E2600 is a separate, more comprehensive assessment of vapor migration.


Agency File Reviews

 If a property, or an adjoining property within the required search distance, appears on a federal, state or tribal record, the standard requires, within the environmental professional’s discretion, the review of “pertinent regulatory files and/or records associated with the listing.” If the environmental professional chooses not to conduct a file review, he/she must document the reason(s) for this decision in the Phase I report.

 The practical impacts of the file review requirement are likely to be on timing and cost.  Agency file reviews can often take several weeks (or months, in some jurisdictions), and could add additional unforeseen costs to the Phase I assessment process.  The file review requirement could dramatically increase the probability that a Phase I assessment is not truly complete at the time of closing. 


Other Revisions

 The Standard also indicates a review of title and judicial records for environmental liens or AULs continues to be a User (Client) requirement that is to be conducted by a title professional. The environmental professional may conduct this work instead of the user, but does not have an affirmative obligation to do so. These user responsibilities are now mandatory, and the user must also consider its own specialized knowledge, commonly known or reasonable ascertainable information about the property, and the degree of obviousness of the presence or likely presence of releases or threatened releases.



 EPA believes that ASTM E1527-13 improves upon the previous standard and reflects the evolving best practices and level of rigor that will afford prospective property owners necessary and essential information when making property transaction decisions and meeting continuing obligations under the CERCLA liability protections. In particular, the new ASTM E1527-13 standard enhances the previous standard with regard to the delineation of historical releases or RECs at a property and makes important revisions to the standard practice to clarify that all appropriate inquires and Phase I Environmental Site Assessments must include, within the scope of the investigation, an assessment of the real or potential occurrence of vapor migration and vapor releases on, at, in or to the subject property.While this rule does not create additional regulatory requirements, prospective purchasers of property should be aware of the changes and potential impacts.