David R. Gillay, Barnes & Thornburg LLP1

This is the first in a series of three articles focusing on an unseen villain known as vapor intrusion to provide a look into key transactional considerations related to this environmental health hazard. Vapor intrusion (VI) is the migration of volatile chemicals from subsurface soil and groundwater into buildings. It shares many common characteristics with the intrusion of naturally occurring radon gas into buildings. This emerging contamination “pathway” presents significant challenges, complicates property transactions and securing and maintaining regulatory closure of contaminated sites, and increases litigation and legal risks. VI issues are far-reaching and have affected thousands of sites across the country. Successfully dealing with VI issues requires a basic understanding of the complex science, rapidly changing regulatory landscapes at the state and federal levels, and evolving legal doctrines that may increase your liabilities.

When buying, selling, or securing financing on real property in today’s market, there is a heightened focus on potential environmental issues. This heightened focus flows from, among other factors, draconian liability schemes under state and federal environmental statutes, the revelation that risk-based cleanups may have left residual contaminants that now present “new” risks, and media attention to emerging contaminants such as PFAS, the so-called forever chemicals.

While there are many ways to identify potential environmental issues, a common national practice is to follow ASTM International’s Standard Practice for Environmental Site Assessment: Phase I Environmental Site Assessment Process, E1527. The Phase I ESA Standard was first published in 1993, and is periodically updated, with its most recent update released in late 2021. The stated purpose of this process is to define good commercial and customary practice in the United States for conducting an environmental site assessment on a parcel of commercial real estate with respect to the range of contaminants within the scope of the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or
Superfund). CERCLA is the principal statute imposing strict, joint, and retroactive liability on the unwary.

The Environmental Protection Agency (EPA) currently recognizes that a certain version of the Phase I ESA Standard can be used to conduct “all appropriate inquiries,” or AAI, into the previous ownership and uses of the property consistent with good commercial and customary practices. Performing AAI is an important step in order to qualify for various state and federal liability defenses to CERCLA liability. (We will cover AAI and these affirmative defenses later in this series). As relevant here, EPA made it crystal clear when it promulgated the AAI Rule in November 2006 that the VI pathway was always and currently is part of conducting due diligence under the Phase I ESA Standard. EPA made, among others, the following relevant  statements on vapor releases and migration of vapors:

“EPA notes that both the AAI Rule and the ASTM E1527-05 standard already call for the identification of potential vapor releases or vapor migration at a property.” (78 FR79319)

“EPA wishes to be clear that, in its view, vapor migration has always been a relevant potential source of release or threatened release that, depending on site-specific conditions, may warrant identification when conducting AAI.” Id.

“The scope of the AAI Rule and ASTM E1527-05 standard always included the requirement to identify all indications of releases and threatened releases of hazardous substances or ‘recognized environmental conditions (RECs),’ including indications of vapor migration or vapor releases.” (79 FR 60088).

To further “assist” environmental practitioners, ASTM published a separate “Guide for Vapor Encroachment Screening on Property Involved in Real Estate Transactions”; EPA has published federal guidance on VI; and the majority of states have now released divergent guidance on the VI pathway.

So, given these complexities, what does this really mean when you are involved in a transaction and the VI pathway is identified in a Phase I ESA? You need a plan. This plan should consist of several key components, such as: 

First, you need to do some work upfront. It can be helpful to develop a stakeholder-approved VI Decision Matrix with screening levels based on risk tolerance and land use. Given the confusion regarding the use and meaning of screening levels, along with divergent guidance, it is important to develop risk communication talking points. These talking points can help alleviate confusion and increase the chances of gaining access to sample structures where VI may be occurring. This will also
allow you to react quickly and take appropriate actions as the data are evaluated.

Second, you should consider developing a VI Sampling and Analysis Plan (SAP) and tailor it for each project. There can be numerous issues and errors introduced by inexperienced contractors when collecting VI data (e.g., soil gas, indoor air, sub-slab soil gas). The SAP will ensure a consistent approach to collecting each sample. A false positive (or negative) could create substantial concerns and delays. To get it right the first time means vetting and hiring experienced contractors. In the transactional setting, where there can be unique time pressure, consider innovative technologies and new tools, like mobile labs and other portable instruments, to expedite assessing the VI pathway. 

Third, build and continue to refine a VI Conceptual Site Model (CSM). The CSM is arguably the most important component of a plan. If you don’t adequately identify the source(s) of the vapors, you will be challenged to find a cost-effective and permanent solution. The CSM will have many aspects and is best established by a multidisciplinary team of experts, starting with the geologists in the field. As more data and information are obtained, the CSM should be routinely updated and
refined to identify potential source areas, preferential pathways (like sewers), and soil gas movement.

Fourth, carefully consider and evaluate mitigation measures. Be cautious about anyone who wants to preemptively solve the problem with no or limited data. This leads many to jump to the end – installing a sub-slab depressurization system or radon mitigation system. These types of systems, when properly designed and installed, can be very effective solutions and often have long-term operational, maintenance, and monitoring expenses. If this type of system is preemptively deployed, it may miss a preferential pathway (sewer) and/or indoor air source. The CSM will help you avoid these pitfalls and help ensure that the pathway is addressed and ensure, with confidence, that there are no unacceptable exposures to human health.

If appropriately managed, the VI pathway will not kill your deal or chill your redevelopment project. The VI pathway can be complex, and the science continues to evolve at a rapid pace, but with proper counsel from legal and environmental professionals and a plan, you can successfully navigate to a closing or refinancing with cost-effective and practical approaches. This article should not be construed as legal advice or legal opinion on any specific facts or circumstances.

The contents are intended for general informational purposes only, and you are urged to consult your lawyer on any specific legal questions you may have concerning your situation. David R. Gillay, Esq., is a Partner in the Environmental Department of Barnes & Thornburg LLP’s Indianapolis Office and may be reached at 317.946.9267 or david.gillay@btlaw.com.


1 David leads Barnes & Thornburg LLP’s Environmental department’s remediation, redevelopment, and environmental transactions practices. He has focused on the legal, regulatory, and technical impact and implications related to the vapor intrusion pathway, chlorinated VOCs (with an emphasis on TCE), and potential long-term stewardship obligations related to environmentally challenged properties for nearly two decades. David is a frequent writer and speaker, having participated in a variety of private association, client, and continuing legal and business education seminars with a special focus on vapor intrusion, TCE, and developing cost-effective solutions to manage residual contamination as part of redevelopment projects and the sale of contaminated property. David was recently elected to join the American Association of Radon Scientists and Technologists (AARST) Board of Directors and continues to serve as counsel of record for the Midwestern States Environmental Consultants Association (MSECA). Prior to joining Barnes & Thornburg, he obtained an advanced environmental engineering degree and practiced as an environmental consultant on various projects across the country.