Read Before You Buy: Important Update to All Appropriate Inquiries
On February 13th, 2023 EPA will adopt new All Appropriate Inquiries (AAI) standards. AAI is a process done prior to the purchase of property to assess its environmental condition as part of pre-purchase due diligence. By completing an AAI before taking ownership of property, you are eligible for liability protections under CERCLA as a Bona Fide Prospective Purchaser (BFPP). This is a requirement for safe harbor under CERCLA, allowing landowners to access federal grants to assist with assessment and cleanup efforts, and not being held liable for what happened on the site before you took possession.
“Before the existence of brownfields grants and AAIs, many sites with great characteristics, such as, connectivity with existing infrastructure, transit and neighborhoods, were considered undevelopable due to their potential liability and high clean up costs.” says Jean Hamerman, Executive Director of CCLR. The brownfields program provides funding to investigate and remediate contaminated, or potentially contaminated sites. This removes the burden of past wrongdoing from the site’s owner while restoring beneficial use that serves the community. “The updates to the AAIs will further ensure liability protection to purchasers, and protections for the community. However, failure to follow the new rules could result in ineligibility for grants.”
Suffice to say, an AAI is an important part of any real property transaction when a site has known or potential contamination. Failure to do so may make the new landowner responsible for investigation and clean up. The EPA updates the AAI standard requirements as needed, this update, ASTM E1527-21 replaces ASTM E1527-13.
Some of the changes include:
- The new AAI 2021 ASTM standards are more rigorous, including deadlines for some of the Phase 1 individual components, and it is critical that new purchasers are aware of this because a simple mistake can result in loss of liability protections.
- PFAS will likely become part of Phase 1s since EPA is slated to list 2 PFAS chemicals as Superfund listed hazardous substances in 2023.
- Phase 1 data gaps must be filled, if possible, but if not practicable in some cases like tax foreclosure, they are forgiven.
- There is a grandfather period of one year for the 2013 ASTM standards. Ongoing Phase 1s using the previous standard must be finalized by February 13, 2024.
To learn more about the new All Appropriate Inquiries rules visit EPA’s website.