When the new E1527-13 Phase I Environmental Site Assessment standard was released in late 2013, ASTM included a new term: CREC.
A CREC is a Controlled Recognized Environmental Condition, a subset of the traditional REC. CREC was developed to address the controlled presence of potential hazardous substances or petroleum products, as defined by the local environmental regulatory agency.
- Site A had a Leaking Underground Storage Tank (LUST) incident which was cleaned up to the satisfaction of the IEPA, with a land use restriction (eg: could only be used for commercial-industrial use). This would be considered a CREC since there are still hazardous substances and/or petroleum products present on the property, however the property has been deemed safe for commercial or industrial use (though not residential use).
- Site B was a former industrial operation that went through the Site Remediation Program (SRP) cleanup process. As part of the No Further Remediation (NFR) letter, the contaminated part of the property must remain capped by an engineered barrier. This would be considered a CREC since there are still hazardous substances present on the property, however they have been controlled by the engineered barrier.
Though the CREC is considered a REC, most CRECs would not be a major concern for a buyer or their lender. This language was developed to clarify situations such as these in order to give purchasers and lenders greater peace of mind about these sites.
The U.S. Department of Housing and Urban Development (HUD) has updated its guidance documents for the Office of Housing and Federal Housing Administration (FHA) to require the latest ASTM standard (E1527-13) effective May 16, 2014. This change affects several guidance documents throughout Office of Housing/FHA, including, but not limited to, the Multifamily Accelerated Processing (MAP) Guide, the Condominium Project Approval and Processing Guide, Handbook 4600.1 REV-1, Section 232 Mortgage Insurance for Residential Care Facilities, and Handbook 4615.1, Mortgage Insurance for Hospitals.
HUD specifically details the addition of the term CREC (Controlled Recognized Environmental Condition) and inclusion of vapor to the migration pathway as important reasons to require ASTM E1527-13.
“The new CREC definition will result in some environmental conditions being listed as CRECs if they have been remediated to restricted levels, as opposed to an unrestricted or de minimis level, and will be a great tool for Office of Housing/FHA staff to assess whether the site is appropriate for residential use,” stated Carol Galante, Assistant Secretary for Housing – Federal Housing Commissioner.
If you have any questions about the new Phase I standard, contact Natalie Neuman (nneuman[at]gabenv.com or 773-486-2123).
ASTM finalized E1527-13, the latest Phase I Environmental Site Assessment standard on November 6, 2013. EPA subsequently approved E1527-13 as being compliant with All Appropriate Inquiry (AAI) regulations on December 30, 2013.
Here’s the top 3 things you need to know about these updated regulations:
ASTM updated the definition of a REC (Recognized Environmental Condition) to specifically include vapor as a potential concern. Previously, it was left to the Environmental Professional’s discretion or their client to determine if vapor should be considered when performing a Phase I. Environmental Professionals (EPs) must now consider solid, liquid and vapor releases of hazardous substances or petroleum products.
Bottom Line: You may see more RECs now that include vapor issues.
ASTM added the term CREC (Controlled Recognized Environmental Condition) to better define sites which have past releases that have been properly addressed but still have a required control (eg: commercial/industrial land use restriction, engineered barrier, etc).
Bottom Line: If you see a CREC, don’t panic. A CREC is a “good REC.” Gabriel can advise you and your client about any site-specific requirements regarding the continuing obligations.
ASTM states that agency file reviews should be conducted if the subject property or adjoining property is identified in any of the standard environmental records sources. Previously, some EPs would review these government records during their Phase I assessments but many would not. Now, these reviews must be included unless records are not reasonably ascertainable.
Bottom Line: Other firms might increase their prices to include this additional work. Gabriel has always done file reviews for these types of sites, so you will not see an increase in our prices to add in the file review.