EPA To Adopt New Phase I Environmental Site Assessment Standard

Lenders need to consider the scope and extent of the Phase I Environmental Site Assessment ("Phase I ESA") they routinely utilize in connection with the acquisition and financing of real estate projects. The Environmental Protection Agency ("EPA") announced its intent to adopt a new standard expanding the scope of review on May 13, 2022.

The proposed standard would not replace or supersede the existing rule but would create a second set of standards for environmental consultants who are routinely engaged by banks, lending companies, and other institutions in connection with loans used for real estate projects.

EPA approved ASTM International (ASTM) Standard E1527-21 as an additional standard meeting the "all appropriate inquiries" ("AAI") component for potential liability protections under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA").