Farmingdale,
NJ (November 1, 2006) – The Environmental Protection
Agency published a final rule setting federal standards for
completion of All Appropriate Inquiries (AAI) for
Environmental due diligence (a.k.a. Phase I Environmental
Assessments). The final rule establishes specific regulatory
requirements for conducting all appropriate inquiries into
the previous ownership, uses, and environmental conditions
of a property for the purposes of qualifying for certain
landowner liability protections under CERCLA. The final rule
will be effective on November 1, 2006.
After November 1, 2006, parties must comply with the
requirements of All Appropriate Inquiries Final Rule or ASTM
E1527-05. All appropriate inquiries must be conducted in
compliance with either of these standards to obtain
protection as an innocent landowner, a contiguous property
owner, or a bona fide prospective purchaser. Compared to the
current ASTM 1527 standard, major changes in the new AAI
rule will require:
- A broader scope of
environmental inquiry.
- Greater reliance on
professional judgment.
- The environmental
professional will be required to have specific
educational and experience requirements.
- Users / property owners
to share certain types of information with the EP
because their obligations in the AAI process are more
defined.
- An evaluation of the
relationship of the purchase price to the value of the
property, if the property was not contaminated.
- Identification of data
gaps, a description of the efforts to resolve them, and
an opinion about the impact of the data gaps on the
ability to identify conditions indicative of releases or
threatened releases of hazardous substances.
The AAI Rule—which will be codified at 40 CFR 312—applies to
all commercial properties, as well as properties used for
commercial purposes, federally owned properties, and
properties assessed with federal grant money. Prospective
owners who fail to conduct AAI in compliance with the rule
prior to obtaining title to a property could lose their
ability to assert a defense to CERCLA liability at a later
time.
For more information about D.W. Smith Associates, call
732-363-5850.
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