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New ASTM Standard to the Rescue
Don't be liable for prior contamination at your property.


U.S. EPA "All Appropriate Inquiries" (AAI) Final Rule &

Revised ASTM Phase I Environmental Site Assessment

by Barry A. Cik, PE, BCEE, QEP, CHMM, REM

Chief 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 Phase I.

       Barry A. Cik is also the author of the forthcoming Government Institutes publication on AAI and the ASTM Phase I.



What Is "All Appropriate Inquiries" (AAI)?


AAI 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 any contamination.


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.


What 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.


AAI does not address non-CERCLA hazardous substances environmental liability.  

These include, but are not limited to, RCRA, wetlands, individual state programs, petroleum underground storage tanks, private toxic tort or property liability actions, etc.


What Are the AAI Liability Protections Called?


Congress established three separate AAI liability protections:


1.    Innocent 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.


2.    Contiguous Property Owner - Protects landowners who are victims of pollution incidents caused by their neighbor's actions.


3.    Bona Fide Prospective Purchaser - Protects landowners who knowingly acquire contaminated property.  Buyers must document that (a) all contamination occurred prior to acquisition,

       (b) they did not contribute to any further contamination of the property,

       (c) they are not affiliated with a liable party, and (d) they comply with all continuing obligations.

How Does AAI Actually Protect a Property Purchaser?


Example 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.


Example 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

(http://www.epa.gov/swerosps/bf/aai/compare_astm.pdf, 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" below.)


Why Did Congress and the U.S. EPA Change the Law and Provide These Protections?


Businesses 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).  


To 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?


"All Appropriate Inquiries" (AAI) must be done by an "Environmental Professional" (EP).  

The 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 Be Done?


The Phase I AAI should be done within six (6) months prior to title transfer.  

Some AAI information over six months old may be (re)usable.

Who Contracts the Environmental Professional (EP)?


There 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 (buyer).


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.)


There 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?


Even 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 notices, etc.


In general, persons who desire environmental liability protection for pre-existing contamination must henceforth also be responsible environmental stewards of their property.


For More Information:


1.         U.S. EPA: www.epa.gov/brownfields

2.         Your real estate or environmental attorney

3.         Any Environmental Professional.  

4.         G.E.M. Testing & Engineering Labs

            1-888-9-GEMTEST or (216)781-4120; www.gemtesting.com


G.E.M. Testing & Engineering Labs Policies:


1.         G.E.M. Testing & Engineering Labs works for buyers and sellers, and cooperates with lenders, attorneys, and brokers.

2.         In 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.


© 2004, 2012 G.E.M. Testing & Engineering Labs.   All rights reserved.