"All Appropriate Inquiries" or AAI, is the process of evaluating a property’s environmental conditions and assessing potential liability for any contamination. It describes a legal standard established by U.S. EPA that is codified in 40 CFR Part 312 and must be met by any party who may potentially claim protection from CERCLA liability as an innocent landowner, a bona fide prospective purchaser, or a contiguous property owner. These defenses limit a purchaser’s liability for historic contamination that predates their ownership.
A Phase I Environmental Site Assessment (ESA) is a specific type of environmental investigation that when properly conducted, has been determined by U.S. EPA to meet the requirements of AAI. The American Society for Testing and Materials (ASTM) Designation E1527-21 describes a Standard Practice for preparing Phase I ESA’s that is refenced in 40 CFR Part 312 as fulfilling AAI.
Who can prepare a Phase I ESA?
The ASTM E1527-21 Standard Practice requires many of the activities to be conducted by, or under the supervision or responsible charge of an Environmental Professional (EP). An EP is defined as person who possesses sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding conditions indicative of releases or threatened releases on, at, in, or to a property. The ASTM E1527-21 Standard Practice specifies minimum qualifications for an EP as one or more of the following:
- A state, tribe, or U.S. territory-issued license or registration as a Professional Engineer or Professional Geologist, along with at least three years of relevant experience
- A federal, state, tribe, or U.S. territory license or certification to perform environmental inquiries, along with at least three years of relevant experience
- A bachelor's degree or higher in science or engineering from an accredited institution, along with at least five years of relevant experience
- At least ten years of relevant experience
A person who does not qualify as an environmental professional may assist in the conduct of all appropriate inquiries if the person is under the supervision or responsible charge of a person that does meet the definition of an environmental professional.
What is involved in a Phase I ESA?
A Phase I ESA includes an examination of records, interviews, and an on-site inspection of the property. The goal of the Phase I ESA is to identify Recognized Environmental Conditions (RECs). The E1527-21 Standard Practice defines a REC as:
1) the presence of hazardous substances or petroleum products in, on, or at the subject property due to a release to the environment; 2) the likely presence of hazardous substances or petroleum products in, on, or at the subject property due to a release or likely release to the environment; or 3) the presence of hazardous substances or petroleum products in, on, or at the subject property under conditions that pose a material threat of a future release to the environment.
Using existing information, an environmental professional assesses the property conditions by examining current and historical uses of both the property and nearby properties in order to identify RECs. Key components of the Phase I ESA include:
- A review of governmental records for the property and surrounding area
- A review of historical records for the property and surrounding area such as aerial photographs, topographic maps, fire insurance maps, and city directories
- A search for recorded environmental cleanup liens associated with the property
- Site visit to document current conditions of the property and identify any hazardous substances or petroleum products that may be present
- Interviews of current and past property owners or occupants
Collection and analysis of soil or groundwater samples is not included as part of a Phase I ESA. However, such testing may be recommended as part of a Phase 2 investigation based on the findings of the Phase I ESA. For example, this 8-acre parcel of land that was evaluated for possible redevelopment into a high-rise building and parking lot. When Cameron-Cole conducted the Phase I ESA, conditions seemed acceptable based on visual observations of the property during the site visit. However, upon completion of the historical records it was determined a manufactured gas plant had previously operated on a portion of the property, which necessitated further assessment as part of a Phase 2 investigation.
How long does it take to complete a Phase I ESA?
If a property has little or no history of development, the Phase I ESA process could take as little as two weeks. If the property has a longer history of development or is located within an area with a large number of commercial or industrial properties, the level of effort could be significantly greater and require several weeks to complete.
How long is a Phase I ESA considered valid?
A Phase I ESA is considered viable for a period of 180 days after the earliest date the following report components were completed 1) Government records review 2) Search for recorded environmental cleanup liens 3) Site reconnaissance, 4) Interviews, and 5) The EP’s Declaration statement. The period of viability can be extended for up to one year provided these five report components are updated within 180 days of the date of the property acquisition or transaction.
Read more about Environmental Site Assessments here.