A New Phase I ESA Standard: What Has Changed and How Does it Affect My Environmental Due Diligence?

Published On: July 14, 2023

The American Society for Testing and Materials (ASTM) standard for Phase I Environmental Site Assessments (ESA) was recently revised and published in November of 2021 as ASTM E1527-21.  The reason for the revisions is that all ASTM standards have an 8-year shelf life.  Once you approach the shelf life of an ASTM standard, there are four courses of action that can be taken 1) there is no action and the standard sunsets, 2) there is a ballot to withdraw the standard, 3) there is a ballot to re-approve the standard with no change, or 4) the Task Group is reconvened to draft revisions.

The last Phase I ESA standard was revised in 2013, and a few years after that, the task group was at it again reviewing the standard and proposing changes for clarity and consistency based on current industry practice.   Once the updated 2021 standard was finalized by ASTM, it was sent to Environmental Protection Agency (EPA) for approval so that the EPA could update its Final Rule indicating that the new 2021 standard may be used to satisfy All Appropriate Inquiry (AAI).  Unfortunately, there were some negative public comments resulting in the EPA not approving the new standard until December 15, 2022 with the standard becoming effective on February 13, 2023.

So now that the new ASTM E1527-21 standard is approved by the EPA as satisfying AAI, what are the important changes to the standard that both consultants and users should be aware of?

  1. Site Plan and Photo Documentation: This one may be the most surprising revision of them all.  Not so much for it being added to the new standard, but more so for it not being a requirement in the prior versions of the standard. The new standard now requires the inclusion of a site plan that depicts the approximate location of relevant features, activities, uses, and conditions identified by the EP.  In addition, photographs of such relevant features, activities, uses, and conditions shall also be included in the report.  Other relevant and representative photos can also be included at the discretion of the EP.


  1. Updated Recognized Environmental Condition (REC) Definition and Guidance Resources: One of the main reasons for the definition updates and the addition of resources within the standard and appendices of the standard was to help create some consistency in RECs among EPs. Identifying RECs is a key objective of Phase I ESAs. The new standard slightly modifies the definition of a REC by adding and defining the term “likely”.  Under the new standard, “likely” means “that which is neither certain nor proved, but can be expected or believed by a reasonable observer based on the logic and/or experience of the environmental professional (EP), and/or available evidence, as stated in the report to support the opinions given therein.”


In addition to the revised definition, the new standard adds discussion on the “multi-step process” that should be reflected in the report when a controlled REC or historical REC has been identified.  To further assist with the important decision-making process, the new standard now provides in the appendix a breakdown of the REC definition, a REC Logic Diagram that walks through the multi-step process and includes twelve examples that helps walk through the questions needing answered to make a REC determination.


  1. Report Viability: Both the old and the new standard establishes specific timeframes, known as the “validity period,” for Phase I ESAs to ensure the report is current. According to the standard, a Phase I ESA remains valid for 180 days or up to one year if certain components are updated. The standard helps to clarify that the date of the report generally does not represent the date the individual components were completed and should not be used for determining report viability.    Therefore, the new standard requires that the report indicate the date the following key components were performed or updated: interviews with owners, operators, and occupants; review of federal tribal, state, and local government records; visual inspection of the subject property and adjoining properties; and the declaration by the EP. Additionally, if the user engages the EP to conduct the search for liens and activity use limitations (AULs), the date of this search should also be identified in the report.


  1. Environmental Liens and AULs: This change has created a lot of discussion by users due to potential increase in costs depending on how this search is performed. The new standard introduces more comprehensive guidelines concerning users’ obligation to conduct searches for environmental liens and AULs. The user, who is the person seeking to use the standard to complete the ESA (i.e., purchasers and lenders), can rely on title insurance documentation such as preliminary title reports or title commitments, or on title search reports such as Condition of Title and AUL/Environmental Lien. The significant change though is that as part of the title search information review under the new standard, records from 1980 to present must be reviewed. There is also a requirement that the EP requests the results of the user performed AUL and environmental lien searches.


  1. Expanded Historical Research: While the prior standard required EPs to describe the historical land uses for the subject property, the new standard adds a requirement to also identify the obvious historical uses of adjoining properties. Previously, adjoining properties only had to be researched to the extent information was uncovered while researching the subject property. It is now also required to review what the industry refers to as the “Top Four” historical resources, which include aerial photographs, fire insurance maps, local city directories and topographic maps.  If any of these four historical resources were not reviewed for the subject property or adjoining properties, the EP must provide an explanation in the report.


  1. Emerging contaminants. Emerging contaminants are a hot topic in the environmental arena, specifically related to per- and polyfluroalkyl substances (“PFAS”). These emerging contaminants are substances that are still being researched and oftentimes the regulatory framework is not yet established. Although discussion of non-scope considerations was included in the previous standard, such as those related to lead-based paint and asbestos, the new standard clarifies that for emerging contaminants that are not identified as hazardous substances by CERCLA, they are not included in the scope of the standard.  However, similar to other non-scope considerations, analysis and/or discussion of these emerging contaminants can be included in the report in the same manner as any other non-scope considerations.  The new standard also indicates that at which time any emerging contaminates are defined to be a hazardous substance under CERCLA, such substances shall then be evaluated within the scope of the standard.


As previously indicated, the new standard, ASTM E1527-21, became effective on February 13, 2023.  To allow for a transition period, the old standard will continue to be an option until February 13, 2024, at which time only the current E1527-21 standard can be used to satisfy All Appropriate Inquiry.   Although many consultants have already transitioned to the most current 2021, it will be important for users to keep a close eye on the Phase I ESA standard being proposed and used as we approach 2024.


Sign up for our webinar on the topic coming August 9, 2023.

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