Lindabury.com - Due Diligence Standards

Comparison of Environmental Due Diligence Standards

Due Diligence Standard	Federal Rule/ AAI	New Jersey's Preliminary Assessment	ASTM E-1527-05
Applicability	Bona Fide Prospective Purchaser, Contiguous Property Owner, and Innocent Landowner under CERCLA. Brownfield Grants.	Landowner Liability Protection under Spill Act, NJ Brownfields Act; ISRA; To obtain site-wide NFA. NOTE: APPLIES TO RESIDENTIAL BUYERS.	Same as AAI Standard
Period of Historical Review	Period of time as far back in the history of the property as it can be shown that the property contained structures, or from the time the property was first used for residential, agricultural, commercial, industrial, or governmental purposes.	Period of time when the site was naturally vegetated or first utilized as farmland or at least until 1932.	First developed use, or back to 1940, whichever is earlier.
Shelf Life of Report	Reports older than 1 year are invalid; Results of previous AAI conducted by or on behalf of prospective purchaser can be used if updated within 1 year prior to acquisition of subject property, with the exception that the following must be updated within 6 months prior to acquisition: (i) Interviews; (ii) Searches for environmental cleanup liens; (iii) Review of governmental records; (iv) Visual inspection; (v) Declaration of environmental professional.	No time limits, but PA must be performed "at time of acquisition."	Reports older than 1 year may be used but with the exception that the following must be updated within 6 months prior to acquisition: (i) Interviews; (ii) Searches for environmental cleanup liens; (iii) Review of governmental records; (iv) Visual inspection; (v) Declaration of environmental professional.
Qualifications for Environmental Professional	Person must: (i) Hold a Professional Engineer's or Professional Gelogist's license or registration and have three (3) years of relevant experience; or (ii) be licensed or certified by the federal government, a state to perform environmental inquiries and have (3) years of relevant experience; or (iii) have a BS in engineering or science and have (5) years of relevant experience; or (iv) have ten (10) years of relevant experience.	No qualifications for the Environmental Professional are listed.	Same as AAI Standard
Review Standard	Publicly available information, obtainable from standard sources within reasonable time and cost and practicably reviewed. Examples of reasonably ascertainable documents include Aerial Photographs, Fire Insurance Maps, Property Tax Files, Recorded Land Title Records; USGS Topographic Maps, Local Street Directories; Building Department Records; and Zoning Land Use Records. AND Standard Environmental Record Sources with approximate minimum search distances include Federal NPL sites; CERCLIS list; RCRA lists; LUST sites; Brownfields and voluntary cleanup sites.	Diligent Inquiry- diligent search of all documents which are reasonably likely to contain information related to the object of inquiry. Examples of diligent inquiry include the following documentation: Sanborn Fire Insurance Maps; MacRae's Industrial Directory; Title and Deed; Site Plans and facility as-built drawings; Federal, State, county and local government files; and The Department Geographic Information System. AND The site history from the time the site was naturally vegetated, including without limitation: names of all owners and operators; dates of ownership of each owner; dates of operation of each operator; and brief description of the past industrial/commercial usage of the site by each owner and operator.	Reasonably ascertainable from standard sources.
Differences in Reporting	AAI Mandatory within one year of acquisition; Interview must be conducted with neighboring property owners if the subject property is abandoned; Accounting and explanation of the significance of any data gaps; Relationship of purchase price to fair market value; Specialized knowledge or experience on the part of the purchaser; Recognized Environmental Conditions ("REC") versus Area of Concern; To the extent that indications of past uses of adjoining properties are visually and/or physically observed on the site visit, or are identified in the interviews or record review, they shall be noted and past uses so identified shall be described in the report if they are likly to indicate an REC in connection with the adjoining properties.	Aerial Photos if site is greater than two (2) acres; hazardous substances and waste inventory (past and present); all production processes (past and present); Must provide a narrative for each Area of Concern (AOC); Each AOC must be referenced to a keyed and scaled site map; Remediation activities previously conducted or currently underway at the site including dates of previously conducted or currently underway at the site including dates of previous discharges, remedial actions, and all existing sampling data concerning contaminants at the site; All remedies previously approved by the Department in a remedial action workplan or equivalent document to determine if the remedy remains protective of public health, safety and environment; All existing environmental sampling data concerning contaminants at the site; Current and historic wastewater discharges of sanitary and/or industrial waste; Report format must comply with N.J.A.C 7:26E.	Has been adopted by the EPA to meet the same requirements as the AAI rule.

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