Controlled Recognized Environmental Condition (CREC)

June 27, 2013

Controlled Recognized Environmental Condition (CREC) is a proposed new term for the ASTM E1527 standard for Phase I Environmental Site Assessments (ESAs).  The Controlled REC concept was introduced to address contaminated sites that have received risk-based regulatory closure, where no further remediation is required but residual contamination still exists at a site and the property is subject to activity and use limitations or “AULs.”  These sites, where contamination is controlled but could still pose ongoing or future obligations on the owner (such as special precautions during construction or grading activities), have been a source of some confusion to the environmental due diligence industry with regards to how they should be classified.  The Controlled Recognized Environmental Condition or “CREC”, if accepted, would be a distinct classification from Historical Recognized Environmental Condition (HREC) and Recognized Environmental Condition (REC). The environmental professional would be required to list any CRECs identified in the findings and conclusions section of the Phase I Environmental Site Assessment report.


Recognized Environmental Condition- REC

June 20, 2013

A Recognized Environmental Condition (REC) is defined by ASTM as “the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, ground water, or surface water of the property. The term includes hazardous substances or petroleum products even under conditions in compliance with laws.” The term REC does not include de minimis conditions.


Historical Recognized Environmental Condition- HREC

June 18, 2013

A Historical Recognized Environmental Condition is defined by ASTM as “an environmental condition which in the past would have been considered a recognized environmental condition, but which may or may not be considered a recognized environmental condition currently.” The determination of whether an environmental condition is a recognized environmental condition (REC) or a historical recognized environmental condition (HREC) lies with the environmental professional, and depends upon how the condition impacts the current or future use of the property. A release that was remediated and given regulatory closure may be considered an HREC unless it is determined to have a significant current or future impact on the property, at which point the environmental professional may deem it a REC.


Environmental Professional (EP)

June 13, 2013

An Environmental Professional is someone qualified to conduct and/or supervise a Phase I Environmental Site Assessment, based on experience and education requirements. An Environmental Professional or “EP” must possess sufficient knowledge and experience to exercise professional judgment, appropriately evaluate risks and form conclusions regarding conditions indicative of releases or threatened releases at a property. The requirements for an Environmental Professional include:

A federal, state or tribal issued certification or license (Professional Geologist, Professional Engineer or other certification to perform environmental inquiries) and 3 years of relevant full-time experience;

or

A Baccalaureate degree or higher in science or engineering and 5 years of relevant full-time work experience;

or

10 years of relevant full-time work experience.


De Minimis Conditions

June 11, 2013

De minimis conditions are defined by ASTM as environmental conditions that “generally do not present a threat to human health or the environment and that generally would not be the subject of an enforcement action if brought to the attention of appropriate governmental agencies.” A de minimis condition is not considered a recognized environmental condition. An example of a de minimis condition might be a small, superficial spill of oil that is not anticipated to cause a significant concern.


Business Environmental Risk

June 6, 2013

Business Environmental Risk is characterized by the American Society for Testing and Materials (ASTM) as “a risk which can have a material environmental or environmentally-driven impact on the business associated with the current or planned use of a parcel of commercial real estate, not necessarily limited to those environmental issues required to be investigated in this practice (ESA, ASTM E1527-05). Consideration of business environmental risk issues may involve addressing one or more non-scope considerations.”

The conventional non-scope environmental business risk items alluded to include:

  • Asbestos
  • Lead Paint
  • Lead in Drinking Water
  • Radon
  • Wetlands
  • Ecological resources
  • Endangered Species
  • Cultural and historic resources
  • Regulatory compliance
  • Industrial Hygiene
  • Health and Safety
  • Indoor air quality
  • Biological agents
  • Mold

Business Environmental Risk is by definition very broad and can encompass many types of risk, not limited to the above list.


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