Type: Law Bulletins
Date: 06/10/2010

Vapor Intrusion - Buyers, Sellers, and Developers of Contaminated Property Beware

With EPA focusing on low dose chemical exposures to sensitive populations from vapor intrusion, it is critical that buyers, sellers, and developers of contaminated property have a vapor intrusion strategy in place to minimize and allocate risks. Simply put, vapor intrusion is the infiltration of chemical vapors from contaminated subsurface soil and groundwater into overlying and nearby homes, offices, and buildings. It occurs when certain chemicals in contaminated soil or groundwater volatilize, that is, evaporate, and travel through the subsurface soil into the air spaces of overlying and nearby buildings. In extreme cases, the vapors can accumulate to levels that may pose immediate safety hazards (explosion), acute health effects, or odors. More often, however, the chemical concentrations are very low. Even in situations with low concentrations, EPA has determined that there can be an unacceptable risk to human health from long-term, cumulative exposures, especially for sensitive populations like children and the elderly. While environmental agencies recognize that contaminant vapors may infiltrate buildings 100 feet away from contaminant sources, some environmental experts believe that contaminant vapors can travel even farther through preferential pathways, such as utility line trenches.

Common vapor intrusion contaminants include benzene from past releases of gasoline, tetrachloroethylene (or “Perc”) from past releases from dry cleaners, and the solvent trichloroethylene (or “TCE”) from past solvent releases by manufacturers. On May 10 through 12, 2010, a panel of experts met to review EPA’s draft health risk assessment of TCE and appeared ready to support the agency’s reclassification of TCE from a “potential human carcinogen” to a “known human carcinogen.” Even though it was contested, EPA’s draft health risk assessment reported that TCE has the potential to induce neurotoxicity, immunotoxicity, developmental toxicity, liver toxicity, kidney toxicity, endocrine effects and several forms of cancer, including kidney cancer, liver cancer, lympho-hematopoietic cancer, cervical cancer, and prostate cancer. Reclassifying TCE as a known human carcinogen will cause EPA and state agencies to develop more stringent cleanup standards and may lead to the re-opening of closed sites. In any event, it will lead to significant expenditures for remediation and highly publicized lawsuits.

To avoid or at least minimize litigation risks, buyers, sellers, and developers of contaminated property will want to make sure their due diligence includes an investigation for potential vapor intrusion contamination, including nearby properties. While EPA has determined that following ASTM Phase I Environmental Site Assessment Standard E 1527-05 constitutes full compliance with the requirement for conducting all appropriate inquiries for persons seeking to qualify for CERCLA defenses as an innocent landowner, bona fide prospective purchaser, or contiguous property owner, it may miss offsite vapor intrusion. Therefore, parties will also want to incorporate ASTM E 2600-08 Standard Practices for Assessment of Vapor Intrusion into Structures on Property Involved in Real Estate Transaction. (ASTM is expected to publish a new E 2600 standard in late June 2010 entitled Standard Guide for Vapor Encroachment Screens, which will omit the presumption of a vapor intrusion condition, move the risk-based concentration text to the appendix, and offer a more complete explanation of the connection between E 1527 Phase I ESAs and E 2600.) In addition, purchase agreements should address the possibility of re-openers by EPA or state agencies based on new cleanup standards and protection from third-party lawsuits. Many states have Brownfields Programs that can afford some liability protection to bona fide prospective purchasers, contiguous property owners, or innocent landowners for cleaning up contaminated property. The Indiana Brownfields Program, for example, now covers petroleum and petroleum products, such as benzene, in addition to hazardous substances, such as TCE and Perc. A party that qualifies for the program can obtain a “Comfort Letter” or “Site Status Letter” from IDEM confirming that the property meets IDEM’s RISC cleanup guidelines. However, as IDEM’s states, these letters are “not a legal release from liability.” This means someone other than IDEM could sue buyers, sellers, or developers for contamination migrating onto their property. In many cases, the best protection may consist of an indemnification agreement backed up by insurance. For these and other reasons, buyers, sellers, and developers need a vapor intrusion strategy.

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