If your company is planning to buy commercial or industrial real estate, it’s probably your standard practice to have a Phase I Environmental Site Assessment (“Phase I”) performed. When you do so, it’s important to ensure the Phase I report you receive from your environmental consultant fully complies with ASTM Standard E1527-13. Why? Because your company cannot qualify as a Bona Fide Prospective Purchaser (“BFPP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and, in some instances, state law unless the Phase I complies with the ASTM Standard. Qualifying as a BFPP provides your company with a defense to CERCLA liability for existing contamination on the property, even if it is common knowledge the property is contaminated.
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