Purchasing Contaminated Properties: Environmental Due Diligence and the ASTM E1527-21 Phase I Standard
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Environmental
- event Date
Tuesday, July 25, 2023
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will advise environmental counsel on the steps and evaluations when working on the purchase of a contaminated property. The panel will discuss the environmental risks that may affect a property and what type of remediation and risk management can be utilized in assessing the viability of an acquisition.
Mr. Epperson has a wide range of experience in environmental, health, and safety law. He counsels clients regarding regulatory compliance, transactions, and permitting/entitlement issues. In addition, he represents clients in administrative enforcement actions and advises clients in their efforts to investigate and remediate contaminated properties, including associated cost recovery efforts and regulatory agency oversight. Mr. Epperson provides transactional due diligence, identifying and resolving environmental and natural resource issues to facilitate transactions, including for renewable energy projects. In addition to his practice, Mr. Epperson serves as an adjunct professor at Golden Gate University School of Law, is an advisor to the Bar Association of San Francisco Environmental Law Section Executive Committee, and is a former member of the California State Bar Environmental Law Section Executive Committee.
Ms. Johnson helps her clients comply with environmental laws, evaluate environmental liabilities before acquisitions, and remediate contaminated properties. She specializes in California and federal environmental law, representing a broad range of clients and industries, including manufacturing facilities, the maritime industry, food and beverage companies, and leaders in the commercial real estate and multi-family housing industry. Ms. Johnson has represented a publicly-traded REIT in the multi-family homes industry for over twenty years and represented several of her current clients for over a decade or more. After decades of experience with a broad range of environmental matters, she has focused her practice on the remediation of contaminated properties, vapor intrusion, transactions, and development projects -- complemented by a Prop 65 compliance practice. Ms. Johnson has served either as lead counsel or co-counsel in several major cases, including citizens’ suits claims (Prop 65, stormwater), CERCLA cost recovery claims, and claims for property damage associated with subsurface contamination and soil vapor intrusion. She is on the Advisory Board of the San Francisco Bar Association's Environmental Section and previously served as Chair of the Section.
Mr. Ubaldi focuses his practice on environmental and natural resources litigation. He represents industrial, commercial, and individual clients in a broad array of environmental situations, including cases involving federal Superfund (CERCLA) laws, state Superfund (MTCA) laws, natural resource damage claims (NRDs), and state and federal Clean Water Acts, including stormwater permitting issues. In addition, Mr. Ubaldi counsels clients on environmental compliance, permitting, and regulatory issues such as the handling and disposal of hazardous/dangerous waste. A significant part of his practice also includes environmental insurance. He also assists policyholders interested in identifying and accessing historical insurance funds related to remedial activities.
All commercial real estate transactions involve some level of environmental risk, regardless of whether the property being transferred was formerly used for industrial, commercial, agricultural, or residential purposes. Accordingly, it is important for a buyer to conduct some level of environmental due diligence prior to purchasing real property. Environmental due diligence will allow the buyer to identify and quantify the environmental issues associated with the property.
Environmental liability in purchasing real property may arise from several different federal or state statutes, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, commonly known as Superfund or CERCLA and its state counterparts, hazardous waste and water quality laws, and laws regulating underground storage tanks.
The standard tool for due diligence, ASTM E 1527-21, was revised in November 2021. These standards under the E1527-21 provide more guidance on conducting historical reviews of the subject property and adjoining properties, revises definitions of recognized environmental conditions (REC) and controlled RECs (CRECs), includes a new term "property use limitation," a new explanatory appendix with REC determination examples, changes in the records review section, and clarifies the role of emerging contaminants such as PFAS in Phase 1 environmental site assessments.
The scope of environmental due diligence can depend on several factors, including characteristics of the real property, past uses of the land, known contamination on the property or surrounding property, and the anticipated use of the property after purchase. Appropriate due diligence may range from a simple Phase I ESA to a more complex and intrusive Phase II ESA involving air, soil, soil vapor, water, and/or groundwater sampling at the property.
In some cases, the ASTM 1521 standard may need to be modified or supplemented to adequately address risks, including the potential for soil vapor intrusion, which has become a driving force at many contaminated sites.
There are various ways of limiting liability in the purchase and sale of contaminated property. Counsel can use the purchase and sale agreement as a mechanism to allocate environmental risks, including representations and warranties, escrows, releases, indemnities, and potentially the retention of environmental liabilities by the seller, or more often the assumption of environmental responsibilities by the buyer.
Listen as our expert panel discusses the liabilities associated with selling or buying contaminated property under state and federal environmental laws. The panel will address the risks associated with a particular parcel of land, as well as the defenses available under state and federal law and how environmental counsel can reduce the costs of litigation and clean-up.
- Due diligence fundamentals
- Purpose of all appropriate inquiry
- CERCLA defenses
- ASTM 1527
- Special considerations for scope of inquiry
- Vapor intrusion
- PFAS
- Tools to address contamination
- Purchase agreements
- Asset purchase versus merger
- Provisions/clauses
- Insurance
- Historical
- New products
- Prospective purchaser agreements
- Purchase agreements
The panel will discuss these and other key topics:
- What factors should be considered in establishing the scope of due diligence under ASTM E1527-21, including risks associated with soil vapor intrusion and PFAS?
- What should counsel consider if a client purchases property and discovers pollution after the sale?
- What provisions can be addressed in a purchase agreement to address environmental liability?
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