The American Society of Testing and Materials (ASTM) has proposed an update to the standard protocols for performing “Phase 1 Environmental Assessments” (Phase 1’s).  The proposed changes and updates are driven in part by some EPA rules that reference the current ASTM Standard (ASTM E1527-13) as a method to achieve “All Appropriate Inquiry” into the environmental uses and conditions of a property pre-transaction that allow for certain “innocent purchaser” protections.  The performance of a Phase 1 has become a requirement for HUD and FHA-involved transactions, and most lenders require them for commercial land and building construction loans.

Some changes to definitions, procedures for establishing that adequate investigation into historical documents has been performed, and also the requirements for explicit determinations of presence or absence of Recognized Environmental Conditions with respect to each historical document are being evaluated for inclusion in the new standard.

Costs to perform a Phase 1 may be affected, potential liability exposure for preparers and users of the documents may be affected, as well as the timeframe for adequate report preparation may also require longer due diligence timeframes.  Spangler Environmental has been following these proposed changes for over a year.  We have developed strategies that can be put in place immediately upon a new Standard being approved (and also when EPA adopts the language as the Standard for certain Brownfield project qualifications).  If you have questions or concerns about how the new Phase 1 Standard may impact your project budget or timeline, contact Cal Rieder, our Director—Risk Management Services, Cal@SpanglerEnvironmental.com.