PFAS – A NEW Challenge for Environmental Due Diligence Part 2< Back

How PFAS Will Affect Property Transactions

What is PFAS and What are the EPA’s Current Actions Related to PFAS?

As mentioned in Part 1 of EnviroSouth’s series on PFAS (“Forever Chemicals”), PFAS compounds have been widely used in manufacturing processes since the 1950s and are contained in a variety of everyday products to the present day. Based on the toxicity of these compounds as well as the widespread exposure of the human population, the EPA has now established drinking water standards for a select group of PFAS chemicals. Those drinking water standards are set to apply to all groundwater in South Carolina regardless of use as a drinking water source.

How will PFAS Concerns Impact Environmental Due Diligence?

A common practice for many commercial / industrial real estate transactions is to perform environmental due diligence to mitigate potential environmental liabilities. A Phase I Environmental Site Assessment (ESA) is performed to identify “recognized environmental conditions” or RECs. In short, a REC is defined as the presence or likely presence of any hazardous substances and/or petroleum products in, on, or at a property.

As of June 25, 2024, drinking water limits will be placed on six (6) PFAS compounds. These limits are as low as 4 parts per trillion (ppt), which will result in an increased identification of RECs and the need for additional Phase II assessments and/or Brownfield Program Non-Responsible Party Contracts (VCCs). This is especially true at current and former industrial properties where there is an elevated risk of the use of PFAS-containing materials.

How can EnviroSouth help you?

Studies indicate the ubiquitous use of PFAS across numerous industries has impacted rainwater, surface water, and soil around the globe. This has resulted in the presence of PFAS in Antarctic ice and at other areas untouched by human activities. Therefore, the presence of PFAS in the soil and groundwater on a particular property exists regardless of the property’s history.

As with every challenge, there are several practical options for overcoming these issues when it comes to real property due diligence. Our organization is committed to assisting our clients with navigating this new and latest “speed bump” in the increasingly complex world of environmental due diligence. EnviroSouth is prepared to explain the technical and regulatory situation to buyers, sellers, and their lenders. This assistance will be critical to prevent concerns related to PFAS from derailing future property transactions.

These materials have been prepared by EnviroSouth, Inc. for informational purposes only. The information shall not be construed as legal or professional advice. Readers should seek professional advice before acting on any information.