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VAPOR ENCROACHMENT SCREENING
NEWS FOR LENDERS AND BORROWERS
Inspection Today ---
Wednesday, August 20, 2014
report on your desk next week
Vapor Intrusion and Vapor Encroachment Survey
Vapor intrusion is a real business environmental risk.
Over the past several years, there's been a growing body of
evidence that chemicals can penetrate building foundations at
levels that raise health concerns for the occupants.
Vapor intrusion can result from contamination onsite, or
offsite when chemical contamination travels underground.
There have been increasing numbers of lawsuits involving
vapor intrusion issues.
This page is dedicated to informing commercial and industrial real estate
buyers, sellers, lenders, attorneys and brokers on vapor intrusion
issues and Vapor Encroachment Survey (VES).
Announcement Concerning Vapor Encroachment Screening at the bottom
of this page
indoor air quality issue, vapor intrusion develops when rapidly
evaporating (volatile) chemicals found in polluted soil and
groundwater make their way into the air of overlying buildings,
similar to the way that naturally occurring radon gas seeps into
homes. To become an
environmental concern, vapor intrusion requires a source, an
inhabited building, and a pathway from the source to building
occupants. Any type of property can be affected—industrial,
commercial or residential—and the condition can lead to serious
health issues such as headache, nausea, eye irritation,
respiratory problems and an increased likelihood of developing
are compelling reasons why vapor intrusion needs to be considered
in the course of environmental due diligence.
lenders, the concern is fourfold.
A vapor intrusion condition can adversely impact the value of
the property used as collateral.
can have a negative impact on the borrower’s
creditworthiness and ability to repay the loan.
condition can lead to complications should foreclosure occur.
vapor intrusion claim can damage a bank’s reputation, brand
Borrowers have even more reason to be concerned.
A vapor intrusion condition can lead to liability from lessees
and rent losses occurring as the result of tenants citing the
“unsafe working environment” rationale to break leases.
property with a vapor intrusion condition can become devalued,
stigmatized, or both, making it difficult, if not impossible,
for the owner to attract new tenants or sell the property.
intrusion also presents a potential for costly toxic-tort
a vapor intrusion condition is sometimes caused by
contamination that falls under the umbrella of CERCLA’s
hazardous substances, owners could be held liable for cleanup
under federal CERCLA and state CERCLA-based programs.
evidenced by news reports, properties that were considered
clean are currently being reopened and reexamined for vapor
intrusion risks. This means that site owners with “no
further action” letters can no longer assume these sites are
safe from further environmental problems. As
property owners in many states have already discovered, these
properties may be reopened for additional investigation,
possibly at the owner’s expense.
Vapor Intrusion Condition is a real business environmental
risk in the same way or more so than, for example, lead-based
paint, asbestos and mold are.
According to a 2008 Environmental Bankers Association survey, when a property is
affected by vapor intrusion, the credit activities most affected
include commercial real estate-secured lending, commercial
lending, residential lending and trust activities. When
vapor intrusion is suspected, EBA’s
survey found that lenders most often take a two-pronged approach,
requiring both an ASTM E 1527-05-compliant Phase
I Environmental Assessment
many states have some form of vapor intrusion policy or guidance
on their books or in development, and with all the activity
surrounding vapor intrusion, others can be expected to follow
suit. Real estate
investors purchasing property in all states should screen for the
condition early on in the transaction, not only to determine
whether the property is a sound investment, but also to
demonstrate to state regulators that measures to assess and
address the risk have been taken.
commercial lenders are concerned about vapor intrusion and require
the appropriate due diligence standard to counteract the effects
of the condition on credit and trust underwriting activities. Vapor
intrusion is a real business risk.
I Vapor Encroachment Screening
is designed to be used
early on in the real estate transaction process.
And VES is a conservative screening effort that
environmental professionals can use to quickly and inexpensively
weed out properties unlikely to have a vapor intrusion issue and
addresses the condition specifically as it impacts real estate
the best interest of our clients and their lenders, Due Diligence Inspection and Assessment has integrated Vapor
Intrusion Assessment into our standard Phase 1 Environmental
Assessment Protocol. At
Due Diligence Inspection and Assessment there is no additional fee;
All Due Diligence Inspection
and Assessment quotes and proposals include Tier
I Vapor Encroachment Screening.
Announcement Concerning Vapor
Something that may be different since the last time you had Phase
I Environmental Assessment is the addition of Vapor Encroachment
Screening. Unsafe levels of contamination can travel as vapor
through soil and groundwater from a contamination source on site
or off site within ASTM Standard search distances. This is true
even when contamination has been remediated and only negligible
levels of liquid or solid contamination remain. In recognition of
this reality at least 32 states so far are now reopening
all old NFA cases and where vapor contamination is found the
current owner becomes liable for remediation costs.
the most recent guidance on federal environmental liability
protections, solid, liquid and
vapor are all forms of release of hazardous substances that
must be addressed:
· to fulfill
requirements of All Appropriate Inquiry as defined by federal
40 C.F.R. § 312.21(C)(1) should it ever become necessary.
· to qualify user
for federal environmental liability protection i.e. innocent
landowner or innocent purchaser defense
42 U.S.C. §§ 9607(b)(3) and 42 U.S.C. §§ 9601(35) should it
ever become necessary.
· to qualify user
for federal environmental liability protection contiguous
property owner liability protection 42 U.S.C. § 96079(q)
should it ever become necessary and
· for brownfields
properties, to qualify as a bona fide prospective purchaser for bona
fide prospective purchaser liability protection 42 U.S.C. §
9607(r) pursuant to the Small Business Liability Relief and
Brownfields Revitalization Act, Pub. L. No. 107-118 (2002), 42
U.S.C. §§ 9601 et. seq.
Since at least 2008 EPA has consistently held that vapor
encroachment investigation is necessary and applications for liability protections have been denied for lack of vapor
Environmental Assessment without a vapor investigation component
does not meet the ASTM 1527-05 Standard and does not
satisfy the requirements of All Appropriate Inquiry (AAI) to
qualify user for federal environmental liability protections.
The level and
methodology of vapor
encroachment investigation is not specified however, the
only recognized standard for vapor encroachment investigation is
ASTM E-2600-10 Standard Guide for Vapor Encroachment Screening on
Property Involved in Real Estate Transactions.
environmental industry is still ramping up for Vapor Encroachment
Screening and at the present time our Senior Consultant is one of
fewer than 90 Certified VECS providers in the United States, and no provider without VES specific ASTM training is qualified to offer Vapor
the best interest of our clients we no longer offer Phase I
Environmental Assessment as a stand-alone product. Our quote is
for ASTM E 1527-05 Phase I Environmental Assessment includes ASTM E 2600-10 Vapor
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Contact our Senior Environmental Professional
Call Edward Devine at
or request a quote by e-mail and we'll respond