ALP: What is All Appropriate Inquiry

April 2007

Purchasers of previously developed commercial or industrial property may incur substantial liabilities if the property is determined to be contaminated by hazardous substances.  Federal and Kentucky law provide liability protection to purchasers who did not know and had no reason to know that the property was contaminated at the time of purchase. To qualify, the purchaser must investigate the property in accordance with the All Appropriate Inquiry Rule, 40 C.F.R. Part 312. This Rule substantially changes the prior practice for conducting environmental site assessments.

The changes create potential traps for the unwary, including:

The inquiry is subject to more stringent requirements, including:

Contracts for the inquiry should require investigation in accordance with the Rule or the ASTM E1527-05 Standard Practice for Environmental Site Assessments.  The inquiry report should be reviewed to confirm that all required components are included.  With a little care, liability for environmental contamination can be avoided.