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Purchasing Contaminated Properties: Environmental Due Diligence and the ASTM E1527-21 Phase I Standard

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, July 25, 2023

Recorded event now available

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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.


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.



  1. Due diligence fundamentals
    1. Purpose of all appropriate inquiry
    2. CERCLA defenses
    3. ASTM 1527
  2. Special considerations for scope of inquiry
    1. Vapor intrusion
    2. PFAS
  3. Tools to address contamination
    1. Purchase agreements
      1. Asset purchase versus merger
      2. Provisions/clauses
    2. Insurance
      1. Historical
      2. New products
    3. Prospective purchaser 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?


Epperson, John
John Epperson

Of Counsel

Mr. Epperson has a wide range of experience in environmental, health, and safety law. He counsels clients regarding...  |  Read More

Johnson, Catherine
Catherine W. Johnson

Environmental General Counsel

Ms. Johnson helps her clients comply with environmental laws, evaluate environmental liabilities before acquisitions,...  |  Read More

Ubaldi, David
David J. Ubaldi

Davis Wright Tremaine

Mr. Ubaldi focuses his practice on environmental and natural resources litigation. He represents industrial,...  |  Read More

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