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Prospective purchasers of properties seeking environmental liability protections under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) are required to conduct All Appropriate Inquiry (“AAI”) to investigate both who the prior owners of the property were and how the property was historically used. As part of that due diligence process, the prospective purchaser retains an environmental consultant to conduct a Phase 1 Environmental Site Assessment (“ESA”) to evaluate the environmental conditions on the property and determine if past releases of hazardous substances have occurred or may occur in the future.

Currently, Phase I ESA’s are required to meet the standards of ASTM International E1521-13 (established in 2013) to satisfy the AAI requirements. However, effective February 13, 2023, Phase I ESA’s must meet the standards of ASTM International E1527-21 to satisfy the AAI requirements. E1527-21 updates the standards to include emerging contaminants, including the ones known as PFAS (per- and polyfluoroalkyl substances).

There will be a one-year “phase-out” period where reports may meet either the E1521-13 or E1527-21 standards until February 13, 2024. After that date, the E1527-21 standards must be met. As these new standards may add time and expense to the due diligence process, Prospective purchasers, their consultants and lenders should all be aware of this new requirement and deadline when seeking liability protections under CERCLA.

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