New Environmental Diligence Standards: What They Mean for Prospective Owners, Operators and Investors
- Nicholas van Aelstyn, Partner, Sheppard Mullin
- E. Gail Suchman, Partner, Sheppard Mullin
- Louise Dyble, Associate, Sheppard Mullin
Property owners, lessees, investors and insurers will face a range of difficult questions and issues in the coming years, as important changes to Phase I Site Assessments (ESAs) go into effect. ASTM International Standard E1527-21 will be officially incorporated into federal regulations as a means of meeting the All Appropriate Inquiries (AAI) Rule on February 13, 2023, and will become the sole standard for AAI under federal regulations one year later.
- changes in Phase I ESA procedures and scope, and implications for commercial and industrial real estate transactions, including redevelopment and “brownfields” projects;
- the expanded definition of “recognized environmental condition” to include “likely” contamination;
- the addition of “emerging contaminants” as an official “non-scope” consideration, including naturally-occurring substances such as methane and synthetic chemicals such as PFAS;
- strategies for preserving confidentiality during investigation;
- managing costs and time requirements; and
- how to determine the appropriate scope to support financing or insurance coverage and minimize risk.
The cost, sensitivity and scope of environmental diligence is changing; this webinar will help businesses prepare to negotiate those changes.