Bar News - May 21, 2014
Real Property Law: Vapor Intrusion: A Liability for Real Estate Practitioners
By: Sarah E. O’Leary
Attorneys advising clients in real estate sales and purchases, financing and real estate or construction contracts should be familiar with vapor intrusion – the migration of hazardous vapors from below the ground into indoor air – and the impact it can have on real estate transactions.
PCBs in Older Structures:
By Sarah E. O’Leary
The Potential Risk
In addition to learning more about vapor intrusion, real estate attorneys should be aware that buildings built or renovated in the 1960s and 1970s may have an identified carcinogen in their windows, masonry caulking or lighting.
Polychlorinated biphenyls (PCBs) can cause cancer as well as respiratory, endocrine and immune disorders. Much like asbestos, PCBs were prized for their stable insulating properties and were widely used in electronics, lighting products and building materials from the 1950s until they were banned by the EPA in 1977.
PCBs do not break down in the environment and therefore are aging-in-place in countless buildings across the country. As schools, housing and commercial building structures are renovated, demolished, or simply deteriorate, PCBs can pose a potential source of exposure for building occupants.
The most notorious problem is found in masonry and window caulking products manufactured with PCBs. As the caulk aged, the PCBs remained intact and became more concentrated. Building tests done on caulk contained in windows removed from one public school in New York City found PCBs at 100,000 parts per million, more than 2,000 times the EPA’s 50 ppm threshold.
Another PCB concern exists in deteriorating ballasts in fluorescent lights installed in the 1960s and 1970s. If the ballast casings, which contain the PCBs, are damaged or leaking, they may expose building occupants to high levels of the chemicals.
According to the EPA, products with concentrations of PCBs at or above 50 ppm are dangerous and must be removed and properly disposed of, unless they are completely enclosed
The EPA has issued guidelines for the management of PCB-containing lighting ballasts as well as guidance on disposal of PCB-contaminated building materials. These documents can be found at epa.gov.
The US Environmental Protection Agency (EPA) recently issued draft guidance for assessing and evaluating vapor intrusion, “OSWER Final Guidance for Assessing and Mitigating the Vapor Intrusion Pathway from Subsurface Sources to Indoor Air.” This quasi-regulatory step is likely to increase liability and litigation for legal and environmental professionals involved in real estate transactions and development.
Counsel may want to consider the potential risks of vapor intrusion and PCB exposure to make sure clients are protected from regulatory infractions, unanticipated costs, and any potential health issues that may be associated with unanticipated chemical intrusions into their home or workplace.
Vapor Intrusion and Property Assessment
Vapor intrusion is similar to radon intrusion: a gas present in the subsurface can migrate to the surface and through the building foundation if pressure differentials draw the vapor into the building.
New Hampshire’s Department of Environmental Services (DES) issued guidance in February 2013 on vapor intrusion, which can be found on the DES website by searching “vapor intrusion.”
The EPA recommends that vapor intrusion should be evaluated when four factors are present:
According to the EPA, if all four factors are present, a potential vapor intrusion hazard exists, triggering a more comprehensive review. This review process has the potential to become complicated and bureaucratic in several contexts: when it is required for a real estate transaction, during due diligence for a transaction, in permitting, or for a regulatory inquiry.
- A source of volatile organic chemicals (VOCs), radon, or elemental mercury in the soil or groundwater is underneath or near the building;
- There is a way for the VOCs to migrate from the soil or groundwater to the building;
- Presence of foundation cracks or other gaps in the building through which VOCs can seep;
- A pressure differential or other force exists that would introduce VOCs into the building
Important factors in the review include whether there is a complete exposure pathway and whether the VOC concentrations are dangerous. Common exposure pathways include dirt floors, stone foundations, wet basement conditions, sump pumps, drainage tiles, and utility lines. Mitigation of these pathways can be accomplished through the construction of a vapor barrier, installation of passive mitigation systems, installation of ventilation systems or, in some instances, source removal.
While the EPA has referred to its new guidance on vapor intrusion as a “framework for assessing vapor intrusion” at known hazardous waste and superfund sites, its principles and standards will influence stakeholders, including investors, regulators, environmental consultants, legal professionals, and consumers, in how they approach real estate transactions and development projects.
The EPA is currently working toward adding rules related to 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. According to its website, through this change, the HRS could directly consider the human exposure to contaminants that enter building structures from the subsurface environment.
Last fall, a leading standards organization, ASTM International, published a new Standard Practice for Phase I Environmental Site Assessments (ESA), known as ASTM E1527-13.1. The new standard requires that the potential for vapor migration be addressed as part of a phase I environmental site assessment.
Under the ASTM standard, users seeking to conduct a Phase I ESA at a property are responsible for disclosing information about the property, including that which is commonly known or reasonably ascertainable. The updated ASTM standard also makes many of the previously recommended practices mandatory and specifies that environmental professionals should perform a thorough regulatory file review during the Phase I assessment.
On Dec. 30, 2013, the EPA issued a new rule requiring that “parties purchasing potentially contaminated properties” must use the new E1527-13 ASTM standards to comply with all appropriate inquiries requirements” of CERCLA.
Assessing Health Risks
Assessment of whether a site’s VOC concentrations create a heightened health risk is a much more complex undertaking. Many VOCs, such as benzene and dry-cleaning solvents, are considered carcinogenic even at low doses. Because of this, assessment of both the potential risk and health impact of the actual chemical or chemicals in the soil, and an evaluation of the attenuation of vapors into the indoor environment, must be performed.
Over the last 12 years, the EPA has adopted much more stringent calculation factors, with the allowable tolerances reduced by 300 percent between 2002 and 2013. Both subsurface sampling and attenuation calculation are recommended over indoor testing. This is because of the problems inherent in isolating vapor intrusion compounds from those coming from indoor sources, such as carpeting and stored chemicals, or from outdoor sources, such as vehicles or chemical storage drums.
Early mitigation strategies and assessment of potential vapor intrusion risks should be considered in the planning stage, not as an afterthought. While assessment and evaluation of vapor intrusion is likely to be expensive, it will likely be more cost-effective in the long run than the costs of remediation later. Fortunately, the most common methods to address vapor intrusion problems – vapor barriers and passive mitigation systems – are relatively inexpensive.
Sarah E. O’Leary is an attorney who practices in the field of civil litigation, product liability and environmental law at Governo Law Firm. Sarah can be reached at email@example.com or (617) 737-9045.