The price of environmental due diligence for commercial real estate transactions just went up. On November 6, 2013, the ASTM International announced the issuance of E1527-13, which is the updated standard practice for Phase I environmental site assessments. This updated standard replaces the 2005 version. While new and improved ASTM standards are common, E1527-13 is unique because it currently requires more diligence than legally required to satisfy All Appropriate Inquiry (AAI) under CERCLA. For those new to the game, buyers of contaminated property risk being held liable for the cost of cleanup under CERCLA (a.k.a. the Superfund law) unless they meet certain criteria, including the AAI standard.

ASTM's E1527 historically served as the de facto standard for AAI, with buyers and lenders adjusting their practice when updates were issued. Then, EPA codified the AAI standard in 2006, expressly noting that E1527-05 complies with the requirements. Most expected that EPA would simply substitute E1527-13 as a replacement for the 2005 version. Defying industry expectations, however, EPA recently proposed a rule that would allow both E1527-05 and E1527-13 to satisfy AAI. Commenters have expressed concern over competing standards, but EPA reportedly will accept both standards in the final rule. A final rule has not yet been issued, suggesting that now is the time to become familiar with the new standard and to consider when it should be implemented.