New Standard for Phase I Environmental Assessment Presents Alternative to EPA Final Rule

In November 2005, the United States Environmental Protection Agency issued its final rule defining the scope of “all appropriate inquiry” that must be conducted prior to the acquisition of property to qualify for certain defenses under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA or Superfund)1. This rule applies to acquisition of any interest in real estate, including financings. As discussed in a previous Management Alert which can be accessed by clicking here, the EPA Final Rule imposes significantly more burdens on the prospective purchaser of property to investigate past uses and possible releases of hazardous substances than the burdens imposed by current practice. The EPA Final Rule, however, provides that the requirements of the Final Rule may also be satisfied by compliance with ASTM Standard E 1527- 05. 40 CFR § 312.11.