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The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the “Superfund”, was established by the federal government to authorize the Environmental Protection Agency (EPA) to respond to human health and environmental hazards posed by hazardous substances released into the environment. Under CERCLA, the EPA can hold the responsible party(s) liable for cleanup or can conduct the cleanup and require costs to be supplied by the responsible party(s).

AAI Rule:

The All Appropriate Inquiries (AAI) Rule in 40 CFR, Part 312, established by the EPA, is the process of evaluating a property’s environmental conditions and assessing potential liability for any contamination. The American Society for Testing and Materials (ASTM) published the E1527 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment (ESA) Process” to define good commercial and customary practice for conducting an environmental site assessment for commercial real estate. The EPA recognizes the ASTM E1527 Standard as fully compliant with the AAI Rule. The AAI Rule is required to obtain protection from liability for contamination under CERCLA (or Landowner Liability Protections). The Landowner Liability Protections (LLPs) include “innocent landowner”, “contiguous property owner”, or “bona fide prospective purchaser” limitations on CERCLA liability.

Updated ASTM Standard:

Since ASTM E1527 was first published in 1993, there have been several revisions with the most recent version, ASTM E1527-21, published in December 2021. Once the EPA reviews and formerly adapts the new standard, ASTM E1527-21 will be incorporated by reference into the AAI Rule in 40 CFR Part 312.

So, what changed and how can you prepare for the updated ASTM E1527-21 standard? Most of the updates were added to “clean up” the document, provide clarification for key terminology, add new definitions, and overall strengthen the assessment process.  The updates include:

  • Use of the term “Subject Property” has been added to identify the property that is the subject of the assessment.
  • Improved definitions have been provided with important clarifications for:
    • Recognized Environmental Condition (REC) – offsite issues without the potential to impact the Subject Property are now clearly excluded from the definition of REC.
    • Controlled Recognized Environmental Condition (CREC) – a REC that has been addressed to the satisfaction of the applicable regulatory agency with hazardous substances or petroleum products allowed to remain in place subject to activity and use limitations or other property use limitations.

Historical Recognized Environmental Condition (HREC) – must evaluate the past closure of a contaminated site to confirm that it was closed under conditions that meet current standards. Differs from a CREC in that it has been addressed by the regulatory agency and has resulted in no activity and use limitations or other property use limitations.

  • The Appendices now include a flow chart to aid in making a REC/HREC/CREC determination.
  • New definitions include:
  • Property Use Limitation (PUL)
  • Significant data gap
  • Emerging contaminants, such as PFAS, are now included on the list of non-scope items, at least until they are classified as a CERCLA hazardous substance. However, the non-scope issues appendix now includes a discussion of emerging contaminants and states that where the Phase I ESA is performed to satisfy both federal and state requirements the environmental professional should consider and discuss these substances if they are considered hazardous under applicable state law.
  • Clarifications have been added to strengthen the historical records review. This section now reflects common industry practice, including subject and adjoining property identification, use, and research objectives.
  • The Findings and Opinions section of a Phase I ESA must now include the rationale for identifying a condition as a CREC or a HREC.
  • Numerous updates and additions to the appendices have been added, including a revised report outline and a discussion of business environmental risks associated with emerging environmental contaminants.
  • Clarification for the continued viability of a Phase I ESA has been added – the shelf life remains 180 days (and 1 year for updates) but the dates each component of the report were completed must be clearly stated in the report. The clock starts on the date the first of the components was completed.

ASTM has published the updated E1527-21 and it has been submitted to the EPA for review. It is anticipated that the EPA will approve the new standard and issue a rule to confirm ASTM E1527-21 may be used to satisfy the AAI rule within the coming months.

For questions regarding Phase I Environmental Site Assessments, please contact Stephanie Holst at

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