Topic
What do you think about the ASTM E2790 Continuing...
737 Views, 3 Comments
Title:
What do you think about the ASTM E2790 Continuing Obligations Standard?
Content:
I'm curious how Phase I ESA professionals --and their clients-- are responding to the new ASTM E2790 Continuing Obligations standard. Has anyone used it? Are any end users asking about it?
It was a long and contentious process to get the standard completed. Where do you see room for improvement? What questions do you have about the standard?
If you want to learn more about the standard, make sure you register for our free web event, ASTM's New Continuing Obligations Standard: What it Means For You, taking place October 6th.
Comment
This isn't the kind of thing we're likely to hear from clients and end users about.
It's been my experience that most clients - including lenders - don't even know what consitutes a good, compliant Phase I. The average client isn't aware that they have ANY obligation, much less any continuing obligations, and they certainly aren't aware of a voluntary standard describing them.
Be the first to rate this
|
Sign in to rate this
Definitely a good point Scott and I see where you are coming from. There were several banks that participated in the task group, which is why I asked.
Be the first to rate this
|
Sign in to rate this
I have a vested interest in this topic. We have been beating the drum (or maybe tamberine) given the breadth of the marketplace. I anticipate two core users of the continuing oblgations guidance - the landowner and the responsible party. The drivers are compliance and business risk.
The standard guide builds a predictable structure for the future property owner to know their duties when they acquire contaminated property. The duty can be predicted, and the fees forecasted. The lack of predictability when we started draftign the guide was a driver for many folks involved.
When drafting, we saw benefits for the banking industry. Now the banker can calculate the cost or duty to carry a contaminated property past purchase. As the guide is consistent with CERCLA requirements, it sets a best practice bar. For 99% of the contaminated properties, the costs of continuing obligations is insignificant to other cash flows. Because the cost impact is typically low compared to the overall project, the interest of bankers at the lending stage is weak.
My "pitch" to the banking industry did resonate on the "servicing" side of the banking industry -- those who carry the loans rather than those who approve. It was interesting symetry with the pre- and post-acquistion relation between the Phase I and the newer Continuing Obligations. Talking with EBA staff, it was anticpated the the Continuing Obligations would align with those involved with servicing loans. A contaminated property poses a much greater risk for a bank if the continuing obligations are in default. The bank when foreclosured likely gets back a property where compliance issues are generated (breach of an IC), where business risk is generated as with health exposure like the failure of an EC or a VES system. More many banks, the interest is averting future headaches.
We know that banks when they have foreclosed and received contaminated properties back have been some of the earliest customers of this service, or process. The ask for Continuing Obligations to be implemented because they want the Limited Liablity Protections once the property returns. They hold an interest not so much as the lender, but now as the new owner.
This has been a long road, but we have made progress. Nice to be part of the dialogue.
Be the first to rate this
|
Sign in to rate this