New ASTM Standard to the Rescue
Don't be liable for prior contamination at your property.
NEW ENVIRONMENTAL LIABILITY
U.S. EPA "All
Appropriate Inquiries" (AAI) Final Rule &
Revised ASTM Phase I Environmental
Barry A. Cik, PE, BCEE, QEP, CHMM, REM
Engineer, G.E.M. Testing & Engineering Labs
Barry A. Cik is a member of ASTM
Committee E-50 (and subcommittee E-50.02) which revised and drafted the ASTM
Barry A. Cik is also the author of the
forthcoming Government Institutes
publication on AAI and the ASTM Phase I.
What Is "All Appropriate
is the new U.S.
EPA approved environmental assessment procedure to (a) evaluate a
property's environmental conditions, and (b) assess the potential liability for
Who Is Affected by "All
Appropriate Inquiries" (AAI)?
AAI protects buyers who were not
involved in the prior contaminating activities at the property.
AAI is not intended to benefit those
who actually are responsible for the contamination.
AAI Liability Protections Are Available?
The AAI protections include cleanup liabilities
associated with CERCLA hazardous substances.
CERCLA liability is generally based on Strict, Joint and Severable
Liability. In plain language, this means
that "when you buy the property, you
buy the contamination." The
AAI protections allow buyers to be free of that liability.
does not address non-CERCLA hazardous substances environmental liability.
include, but are not limited to, RCRA, wetlands, individual state programs,
petroleum underground storage tanks, private toxic tort or property liability
What Are the AAI Liability
established three separate AAI liability protections:
Landowner (a.k.a. Innocent Purchaser) - Protects landowners who "did not know and had no reason to
know" about hazardous substances at the time of acquisition.
Property Owner - Protects landowners who are victims of pollution incidents
caused by their neighbor's actions.
Fide Prospective Purchaser - Protects landowners who knowingly acquire contaminated property. Buyers must document that (a) all
contamination occurred prior to acquisition,
they did not contribute to any further contamination of the property,
they are not affiliated with a liable party, and (d) they comply with all
Does AAI Actually Protect a Property Purchaser?
1: "Midnight Dumper Insurance"
- You buy a property that appears to be totally clean. However, it turns out that a "midnight
dumper" disposed of hazardous waste that polluted the soil and/or
groundwater. You would not be held
liable by the U.S.
EPA to pay for the cleanup.
2: Buying a Known Contaminated Property
- The law specifically shields buyers (prospective landowners) from
environmental liability even if the buyer knew that the property was
contaminated, provided that the buyer conducts "All Appropriate
Inquiries" (AAI) and complies with any continuing obligations.
"For the first time since the
enactment of CERCLA in 1980, a person may purchase property with the knowledge
that the property is contaminated without being held potentially liable for the
cleanup of the contamination." -U.S.EPA
page 1, October 2005)
Note: Even if the new property owner is protected against paying for the
cleanup, the property owner will still have certain obligations to protect
human health, safety, and the environment.
(See "Continuing Obligations"
Why Did Congress and the U.S.
EPA Change the Law and Provide These Protections?
and investors have been reluctant to re-develop older industrial sites for fear
of being held liable for the contamination caused by prior owners or operators
of the property.
Furthermore, even properties with no
obvious issues have been found to be contaminated.
For example, "raw" land is
sometimes the victim of "midnight dumpers" (with or without the permission
of the property owner).
encourage the re-development of older industrial sites, and provide a
heightened comfort level for new buyers who were not involved with prior
contamination at a property, Congress enacted the "All
Appropriate Inquiries" (AAI) provisions as part of the "Brownfields
Amendments of 2002."
How Is "All Appropriate
Inquiries" (AAI) Done?
Appropriate Inquiries" (AAI) must be done by an "Environmental
U.S. EPA has approved different types of persons to be EP's. They include licensed Professional Engineers
(P.E.'s) and Professional Geologists (P.G.'s), other relevant licensed persons,
and certain non-licensed persons with additional experience.
In conducting an AAI, the EP may use
the procedures of the revised ASTM Phase I Environmental Site Assessment
(ASTM E1527-05) provided that it is performed in compliance with AAI.
When Does the Phase I AAI Have To
Phase I AAI should be done within six (6) months prior to title transfer.
AAI information over six months old may be (re)usable.
Who Contracts the Environmental
is no specific requirement as to who may contract the EP. However, the "All Appropriate
Inquiry" (AAI) should be done on behalf of the prospective landowner
Does the Phase I AAI Satisfy the
Lender Phase I Requirements?
Yes. In addition, AAI provides liability
protection specific to buyers. (Congress has already given lenders liability protection specific to lenders
via the Secured Creditor Exemption.)
are no AAI reporting obligations to the government, or any other information
sharing requirements, in order to benefit from the landowner liability
protections. However, other existing
environmental regulations are not affected or changed.
What Are Continuing Obligations?
landowners who were not involved with prior contamination activities at the
property, and who are now protected against paying for cleanup liability of
that contamination, are still obligated to protect human health, safety, and
the environment. These obligations,
called "continuing obligations," include, but are not necessarily
limited to, taking reasonable steps to stop an ongoing release of hazardous
substances, prevent a threatened release, prevent or limit exposure, comply
with any relevant land use restrictions, cooperate with any government response
actions or administrative information requests, provide any legally required
general, persons who desire environmental liability protection for pre-existing
contamination must henceforth also be responsible environmental stewards of
For More Information:
1. U.S. EPA: www.epa.gov/brownfields
2. Your real estate or environmental
3. Any Environmental Professional.
4. G.E.M. Testing & Engineering Labs
1-888-9-GEMTEST or (216)781-4120;
G.E.M. Testing & Engineering
Testing & Engineering Labs works for buyers and sellers, and cooperates
with lenders, attorneys, and brokers.
order to assist buyers and sellers, G.E.M. Testing & Engineering Labs will provide
a "Certificate of Professional Opinion for CERCLA Environmental Landowner
Liability Protection" when a Phase I "All Appropriate Inquiry"
is completed by a buyer.