EPA Proposes
Standards for “All Appropriate Inquiry"
The Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (CERCLA or Superfund) affords a buyer of property a defense from
CERCLA liability for pre-acquisition contamination present on the
purchased property. This “innocent purchaser” defense is contingent on
the buyer having made “all appropriate inquiry” (AAI) into the previous
ownership and uses of the property. The “innocent purchaser” defense was
added to the original Superfund law by the 1986 amendments to CERCLA,
however, Congress did not detail what was meant by “all appropriate
inquiry.” Congress amended CERCLA in 2002 directing the U.S.
Environmental Protection Agency to promulgate regulations which define
and detail the standards and practices for “all appropriate inquiry”.
Congress also provided additional defenses for “bona fide prospective
purchasers” and “contiguous property owners”. Although the AAI is a
proposed rule, the final rule is not expected to change significantly.
The proposed rule is contained in the codified Federal Register at 40
CFR Part 312.
The proposed AAI rule expands the requirements and standards for
conducting environmental due diligence at commercial and industrial real
property. Properties used for residential purposes by government and
commercial entities will also be included. The current standard is a
"Phase I” or "Level I” Assessment performed according to the American
Society for Testing and Materials (ASTM) Phase I (Standard E l527-00).
The new AAI rule contains requirements that differ from or exceed the
ASTM Phase I standard, including:
• Professional Qualifications
The proposed AAI rule imposes more stringent qualifications for
environmental professionals performing environmental due diligence work.
To qualify as an environmental professional (EP), the person must have
sufficient specific education, training and experience, of which the
type and quantity is provided in the rule.
• Professional Judgment
The proposed AAI rule provides less guidance to the EP on exercising
professional judgment. The EP must use his/her professional judgment in
selecting the appropriate extent of inquiry; determining the reliability
and thoroughness of information gathered; and developing opinions and
conclusions regarding the presence of releases or threatened releases of
hazardous substances to the surface or subsurface of the property.
• Data Gaps
The proposed AAI rule requires disclosure of any identified gaps in the
required data established in the rule. The EP will be required to
identify data gaps in the final report, describe steps taken to fill the
gaps, including sampling, and analyze the significance of the gaps to
complete an accurate assessment of the site.
The AAI proposed rule requires the EP to make numerous professional
judgments, any one of which may adversely impact the buyer and increase
their environmental liability. CTI has experienced environmental
professionals on staff that are qualified to conduct site assessments in
accordance with all AAI standards.
Click here to contact CTI in regard to your
site assessment needs
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