Hazardous vapors can migrate through a building's basement or foundation from contaminated soil or groundwater near or beneath a building. The resulting vapor intrusion into the indoor air in the building could cause, or result in allegations of, health problems for the building's occupants – whether residents, employees or guests. Although many states have vapor intrusion investigation and remediation requirements, investigation of possible vapor intrusion has been conducted in some cases, but has not been a routine requirement of environmental due diligence during property acquisition. That may be about to change.
Under the Comprehensive Environmental Response, Compensation and Liability Act and many state laws, the limited defenses to liability for an owner of contaminated property require that the landowner conduct "all appropriate inquiry" into the presence of hazardous substances prior to purchasing the property. This AAI requirement lies behind the routine practice of conducting Phase I Environmental Site Assessments as part of real estate transactions. The Environmental Protection Agency's existing regulations provide that AAI can be satisfied either by complying with a set of EPA requirements or by complying with standards for environmental site assessments developed by a private entity, American Society of Testing Methods International.
Until recently neither the EPA requirements nor the ASTM standards specifically required investigation of vapor intrusion as part of a Phase 1 ESA. This year, however, ASTM published revisions to its site assessment standard, new E1527-13, that may now require investigation of vapor intrusion. The new standard defines "migrate/migration" to include the subsurface movement of vapor, and, more critically, excludes indoor air pollution from the scope of AAI assessment only if it did not arise by intrusion from outdoor soil and groundwater. In other words, under the new ASTM standard, it appears that vapor intrusion is a form of pollution that must be addressed in the Phase I ESA.
In September of this year, EPA proposed to amend its regulation to allow AAI to be met by compliance with this new ASTM standard. (EPA tried to make the change immediately effective but backed off in the face of adverse comments.) EPA is now assessing whether to adopt the proposal, and, if adopted, parties who satisfy AAI by complying with ASTM standards may need to address vapor intrusion. Although compliance with the new ASTM standard is not mandatory, it is likely that many parties, such as lenders, will require compliance with the stricter new ASTM standard during transactions. As a practical matter, if EPA amends its regulations, investigation into vapor intrusion is likely to become the industry standard.
Complicating the picture, EPA recently issued a pair of draft guidance documents on assessing and mitigating vapor intrusion from underground storage tanks and from other subsurface sources. These 2013 draft guidance documents may serve as guides for conducting the vapor intrusion assessment in a Phase I ESA and may also form the basis for future state requirements.
Although the requirements for addressing vapor intrusion may be up in the air, you can be certain that vapor intrusion issues will become an increasingly important issue in real estate transactions, regulatory investigation and cleanups, and even tort litigation. Gardere's attorneys routinely manage AAI and vapor intrusion issues for a wide variety of clients.
If you have any questions regarding this alert, please contact Gardere's Environmental Attorneys Frances E. Phillips (firstname.lastname@example.org or 214.999.4803), Scott D. Deatherage (email@example.com or 214.999.4979) or Jonathan Bull (firstname.lastname@example.org or 214.999.4050).