Vapor Intrusion: When to Worry?
NAREIM
National Assn of Real Estate Investment Managers
Las Colinas, TX
September 26, 2012
Beverlee E. Silva, Esq.
Alston & Bird LLP
Beverlee.silva@alston.com
Why Should You Care?
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Human health concerns
Can’t supply an alternative source of air
Potential liability for personal injury
Material impact on property value
It is increasingly on the Regulators radar
It is increasingly on Lender’s radar
A Wake Up Call – Hillside School 1989
Current state of vapor intrusion law,
regulation and guidance
 32 states have developed / adopted VI guidance in the last few
years
 More expected after EPA’s guidance is released
 Move towards including VI risk evaluations as part of standard
Phase I ESA
 EPA is working toward a proposed rulemaking to add a new
screening component to OSWER's Hazard Ranking System
(HRS), which would allow sites impacted by vapor intrusion or
intrusion of other subsurface contamination to be evaluated for
placement on the Superfund National Priorities List (NPL).
Newest Regulatory Developments
 EPA VI Guidance promised by November 30, 2012
 ASTM – E2600-10
 Examples of State Regulation
 California
 New York
 Numerous others (1,1-DCE and TCE have become the major
COC)
California
 DTSC (LA RWQCB)
 Soil Gas, Vapor Intrusion and Mitigation “Advisory”
 California Human Health Screening Levels
 EPA Region 9
 Follows EPA Draft VI Guidance
 Adopted Region 3 Screening Levels
Proposed DTSC Changes
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Preference for sub-slab samples
Collect exterior soil gas samples at source
Repeated sampling of soil gas
Preference for gaseous tracers
Raising sub-slab AF to 0.05 (5x stricter)
A decision matrix?
Defer to LUFT manual for petroleum hydrocarbons
California LUFT
 Vapor Intrusion is NO PROBLEM if
 Dissolved GW concentrations < 1000 ug/L for benzene, and
 10,000 ug/L for TPH and 5 feet from receptor
 Free product is 30 or more feet from receptor
 If above conditions are met, then it is assumed that natural
attenuation is sufficient to mitigate concentrations
New York
 In 2005 NY reopened over 400 pollution cases to determine if chemical
vapors were lingering at the sites
 Over 250 of those cases are now listed as completed
 Current law went into effect in 2008
 Requires notice to be given to tenants when owner or owner’s agent receives a
letter from “issuer” that test results exceed NYSDOH guideline or an OSHA
guideline
 Issuers include:
 New York State DEC
 Certain Municipalities
 Person subject to an order under State Superfund or Oil Spill Program
 Participant entered into a Brownfield Site Cleanup Agreement
Fact Sheets
 The owner must submit one or more fact sheets from NYSDOH within 15 days
of receipt of SVI results which exceed relevant guideline, identify:
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Compound or contaminant of concern
Detected levels of the compound or contaminant
Health risks associated with exposure to compound or contaminant
A means of obtaining additional info on the compound or contaminants
If subject to engineering control, owner must provide fact sheet to prospective
tenant prior to signing of lease
 Lease must include the following language in bold:
 “NOTIFICATION OF TEST RESULTS: The property has been
tested for contamination of indoor air: test results and additional
information are available upon request."
New York Upcoming Legislation
 Proposed Law to Be Introduced Next Year Amends Current
VI Law
 Strengthen current requirements for notifying tenants of health
risks at contaminated sites
 Amend current notification requirements to include subtenants
 Require warning signs on contaminated buildings
 Double the maximum fine landlords face for violating law
Due Diligence for Vapor Intrusion
 Start with general questions
 Type of contaminants
 On-site/offsite
 From owner, former owner, or third party
 Remediation status
 Closed
 Ongoing investigation/remediation
 Remediation strategy
 Active/passive
 Planned use
 Engineering controls
 AAI may or may not include ASTM E 2600-10, but recommended in due
diligence
Lender Requirements for Vapor Intrusion
 Current state of lender requirements
 CERCLA – secured creditor exemption
 Requires:
 No affiliation with polluter
 Disposal ended before purchase of site
 All Appropriate Inquiry (AAI) performed before purchase
 Report any releases identified
 Continuing obligations after purchase
 Likely direction for lender requirements
 VI required as part of Phase I ESA
ASTM E 2600-10
 Adopted June 14, 2010: “Standard Guide for Vapor
Encroachment Screening on Property Involved in Real Estate
Transactions.”
 Replaced 2008 “Standard Practice for Assessment of Vapor
Intrusion into Structures on Property Involved in Real Estate
Transactions”
 The revised standard is refocused solely on screening for the likelihood
of volatile vapors to reach the subsurface of a property involved in a or
otherwise real estate transaction --a Vapor Encroachment Condition
(VEC).
Acronyms
 VES: Vapor Encroachment Screen
 Chemicals of Concern (COC): Chemical that can potentially migrate as a vapor
into a structure, and is generally recognized as having an adverse impact on
human health. COC generally meet specific criteria for volatility and toxicity.
 Vapor Encroachment Condition (VEC):
The presence or likely presence of any chemicals of concern in the indoor air
environment of existing or planned structures on a property caused by the
release of vapor from contaminated soil or groundwater on the property or
within close proximity to the property, at a concentration that presents or may
present unacceptable health risk to occupants.
 PVEC – Potential VEC
Two Tier Vapor Encroachment Screen
 Tier 1 – Investigation of all known or
suspected contamination within Area
of Concern
 Tier 2 – Screening to determine actual
risk
Tier 1
 Tier 1 of a VES is an investigation of all
known or suspected contaminated
properties within an Area of Concern
 AOC for petroleum contamination -- 1/10
of a mile
 AOC for VOCs -- 1/3 of a mile
Tier 1
 May include:
 searches of government records, local history,
media archives and aerial photography
 Does PVEC exist within area of concern? May
need to move on to Tier 2 screening
 Professional judgment of EP crucial
Tier 2
 May include physical sampling of soil and
groundwater to determine the nature and
extent of the underground plume
 If sufficient information exists in regulatory
records or previous investigations, physical
sampling may not be necessary
Tier 2
 Three questions:
 how serious is the contamination?
 how close is it to the property of interest?
 it likely to encroach on the property?
 Crucial questions to evaluating whether to
invest/lend
What Affects Vapor Intrusion?
 Contaminant Type (i.e., petroleum compounds or
chlorinated solvents)
 Type of soil under the structure,
 Contaminant concentration,
 Exposure/contaminant migration pathways (i.e.,
foundation cracks, utility trenches),
 Depth and location of contaminants relative to the
structure, and building/ventilation system design.
How Does ASTM E2600-10 Impact
Diligence?
 Contains legal appendix to clarify the
relationship with the ASTM E 1527-05
Phase I standard, CERCLA, and AAI.
 EPA appears to agree with ASTM
interpretations
Phase I
 The Legal Appendix of E 2600-10 “clarified” that vapor
migration onto a property involved in a real estate
transaction needs to be evaluated in a Phase I
investigation, no different than groundwater migration.
 If VEC is found to exist or is likely, then EP uses
professional judgment to determine if VEC represents a
recognized environmental condition (REC).
AAI
 CERCLA, the definition of “release” includes the terms
“emitting” and “escaping” into the “environment”
 In the AAI rule, the environmental professional is required
to provide “an opinion as to whether the inquiry has
identified conditions indicative of releases or threatened
releases of hazardous substances…on, at, in, or to the subject
property.”
 VEC is a “release” under CERCLA and for purposes of AAI
When to Worry?
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Location
Structures with odors, wet basements, floors
Sites with contamination (future use restrictions)
Complaining occupants
Be particularly sensitive to VI issues on properties on
or near residential developments or sensitive-use
operations (e.g., day cares or schools)
 Higher risk of lawsuits
 Different standard of care with sensitive populations
What types of site cause most worry?
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Brownfields Redevelopment
 Former industrial site with on-site soil and groundwater impacts
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Purchase of commercial property
 Former dry cleaner or gas station on-site or nearby
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Petroleum Hydrocarbons
Service Stations, USTs, Pipelines
Oil Furnaces (naphthalene)
Chlorinated Hydrocarbons
Vapor Degreasers (TCE, TCA)
Dry Cleaners (PCE, DCE)
Circuit Boards (VC, TCE, CCl4)
Semi-Volatiles
MGP Sites (PAHs)
Electrical Power (PCBs)
How to Protect Yourself?
 Environmental insurance
 Mitigation techniques
 Revise environmental due diligence policies or
Phase I scopes of work to address vapor intrusion
 When reviewing Phase I ESA, look beyond list
of recognized environmental conditions (RECs)
Mitigation v. Liability
 Institutional controls
 Engineering controls
 = removal of the contamination sources
 placement of vapor barriers
 vapor collection systems
 indoor treatment systems
 Not legally enforceable
 Intrinsically safe building design
 = building features as ventilated basements, vapor barriers
and other systems to reduce or eliminate vapor intrusion
issues
 Mitigation techniques at site and jurisdiction specific