The PFAS liability landscape shifted dramatically on July 8, 2024, when new federal requirements took effect for Phase I Environmental Site Assessments. Yet months later, we're still seeing property investors make critical mistakes that expose them to massive CERCLA liability: mistakes that could cost millions and derail acquisitions entirely.
As environmental professionals working daily with NY/NJ property transactions, we've identified seven recurring errors that are putting investors at serious risk. The good news? Each one is entirely preventable with the right approach.
Mistake #1: Skipping PFAS Database Screening Entirely
The Problem: Many Phase I ESA reports completely omit PFAS regulatory database screening, or worse, perform superficial searches that miss critical contamination indicators.
The Reality: Proper PFAS due diligence requires screening Environmental Risk Information Services (ERIS) databases and EPA's PFAS Analytic Tools. Your Phase I report should explicitly state whether database searches identified PFOA or PFOS listings at the subject property, adjoining sites, or nearby properties within standard search distances.
The Fix: Demand that your environmental consultant confirm database screening was completed and document findings in writing. A simple statement like "PFAS database screening conducted with no listings identified" provides essential liability protection. If listings are found, require detailed analysis of contamination sources and migration potential.
Mistake #2: Using Outdated ASTM Standards
The Problem: Two months after the July 8, 2024 deadline, we still encounter Phase I ESA reports that don't meet current ASTM E1527-21 requirements for PFAS evaluation.
The Critical Detail: To qualify for CERCLA liability defenses: Innocent Landowner, Bona Fide Prospective Purchaser, or Contiguous Property Owner status: your Phase I ESA must satisfy "all appropriate inquiries" requirements, which now include PFAS analysis under ASTM E1527-21.
The Fix: Verify your assessment explicitly states ASTM E1527-21 compliance for PFAS evaluation. Reports completed before July 2024 or without this compliance may not provide adequate liability protection. Don't risk your CERCLA defenses on outdated standards.
Mistake #3: Ignoring Historical Property Uses
The Problem: Investors frequently focus only on current site conditions while overlooking past manufacturing activities, waste disposal practices, and historical use of PFAS-containing materials.
Why This Matters: Industries with biosolids application, electroplating, textile manufacturing, firefighting foam usage, or landfill operations present elevated PFAS risk. Historical aerial photographs, city directories, and regulatory files often reveal contamination sources that current site conditions don't reflect.
The Fix: Request comprehensive historical research as part of your Phase I assessment. Your consultant should review decades of aerial photographs, insurance maps, and regulatory records to identify potential PFAS sources. This detective work often prevents costly surprises during due diligence.
Mistake #4: Misunderstanding Site Topography and Groundwater Flow
The Problem: Many assessments fail to analyze drinking water sources, soil permeability, groundwater depth, and groundwater gradient: factors that directly impact contamination extent and regulatory response.
The Regulatory Reality: Environmental agencies prioritize PFAS impacts on drinking water supplies. Sites with shallow groundwater, high permeability soils, or proximity to public water wells face intensified scrutiny and potentially massive remediation costs.
The Fix: Ensure your Phase I includes detailed hydrogeological analysis. Understanding groundwater flow direction, depth to water table, and downgradient receptors is essential for assessing contamination potential and regulatory liability. This analysis often determines whether PFAS discovery triggers immediate action or allows for risk management strategies.
Mistake #5: Misinterpreting Industry Risk Classifications
The Problem: A dangerous misconception persists that if a property has an industry on EPA's PFAS risk list, contamination is automatically present: or conversely, that industries not on risk lists are automatically clean.
The Truth: Industry classification doesn't automatically indicate a recognized environmental condition (REC) or PFAS release. Manufacturing facilities that never used PFAS-containing materials may pose minimal risk, while seemingly low-risk properties might have received contaminated materials or waste.
The Fix: Demand site-specific analysis rather than generic industry classifications. Your assessment should distinguish between industries with documented PFAS use and actual confirmed contamination at your specific site. This nuanced approach prevents both unnecessary alarm and dangerous oversights.
Mistake #6: Overlooking Future Property Use Implications
The Problem: Investors evaluate PFAS risk based on current property conditions without considering how contamination discovery affects intended future use.
The Business Impact: PFAS contamination can severely limit development options, particularly for residential projects, childcare facilities, schools, or any use involving groundwater exposure. Remediation requirements vary dramatically based on intended land use.
The Fix: Before proceeding with acquisition, assess whether potential PFAS contamination restricts your development plans or creates remediation obligations that exceed project budgets. This forward-thinking approach prevents costly pivots mid-project.
Mistake #7: Avoiding Phase II Investigations When Warranted
The Problem: When Phase I findings suggest potential PFAS risk, some investors skip Phase II subsurface investigations to limit upfront costs: creating massive unquantified liability exposure.
The Expensive Reality: Unknown contamination extent makes accurate cost projections impossible and complicates financing, insurance, and exit strategies. As one industry expert recently noted, "The cost of not knowing often exceeds the cost of investigation by orders of magnitude."
The Fix: Based on Phase I findings and transaction objectives, determine whether Phase II investigation provides better risk management than proceeding with uncertainty. Sometimes confirming contamination absence or extent enables more informed decision-making than hoping problems don't exist.
Protecting Your Investment and CERCLA Defenses
The regulatory landscape for PFAS continues evolving rapidly, with federal cleanup standards still under development. This uncertainty makes proper due diligence even more critical: you can't rely on established cleanup thresholds to predict costs and timelines.
To maintain CERCLA liability protections, work with environmental professionals experienced in ASTM E1527-21 requirements and coordinate with legal counsel to document compliance. Remember that even properly conducted assessments may not identify all contamination sources, given PFAS's widespread historical use and environmental persistence.
The stakes couldn't be higher. PFAS liability can transform profitable acquisitions into financial disasters, but systematic due diligence following current standards provides essential protection. Property investors who understand these seven critical mistakes: and take action to avoid them: position themselves for success in an increasingly complex regulatory environment.
When it comes to PFAS liability in property transactions, the cost of proper due diligence always beats the cost of getting it wrong. Your future self will thank you for the thoroughness you invest in today.
Need expert guidance on PFAS compliance and Phase I ESA requirements? Contact our team to discuss your specific project needs and ensure your due diligence meets current regulatory standards.
