On November 1, 2005 the federal Environmental Protection Agency (EPA) signed into law the much anticipated All Appropriate Inquiry (AAI) requirement. The rule is designed to hold potential purchasers of real estate to a higher threshold of due diligence (than prior standards) when petitioning for state assistance under the current CERCLIS or Brownfield’s programs. This new law will take effect on November 1, 2006.

Several new areas have been introduced in which environmental consultants must be aware of. This includes the research required regarding historical sources especially when data gaps exist (more than 5 year intervals not covered by one historical source). When no other sources are available, then the consultant must indicate that all inquires were made to satisfy the AAI requirement. In addition, more emphasis has been focused on interviewing the current and past owners as well as other individuals with knowledge of the site.

The new law also identifies qualifications for and environmental professional (EP). This is the first time any standard/law has outlined the qualifications required to perform environmental assessments.

Since many environmental reports are ordered by lending institutions, there will be some discussion as to what type of report is required. Whether or not a borrower is buying or refinancing the property will become a factor as to the type of report required. From a liability standpoint, requiring the new standard report will give the lender extra comfort. The cost for an E1527-05 report should increase from all consultants ($250-$500).

In conjunction with the new law, the American Society of Testing Materials (ASTM) released the new E1527-05 guidelines for preparing environmental assessments on November 18, 2005. The new standard has a direct correlation to the AAI law and is effective immediately. The new standard replaces E1527-00.