What is vapor intrusion and how can vapor encroachment affect a property transaction and due diligence practices?

Vapor intrusion (VI) is the migration of volatile chemicals from the subsurface into overlying buildings, according to U.S. Environmental Protection Agency (EPA) Draft VI Guidance, November 2002. “Three conditions must exist for environmental contaminant vapors to reach the interior of buildings: vapors from contaminated soil or groundwater must migrate to the subsurface near the building foundation, entry routes into the building must be present, and there must be driving forces (e.g., stack and wind effects) present moving the vapors through these entry routes (ASTM, 2005).”

VI has become one of the leading exposure route concerns along with direct contact with impacted soils and ingestion of impacted groundwater. VI is very similar in behavior to radon and many of the mitigation techniques are also similar.

Determining the potential for VI should be completed early in the transaction process, during the Phase I Environmental Site Assessment (Phase I), if possible. The American Society for Testing and Materials (ASTM) E1527-05 or All Appropriate Inquiry Standard Phase I was not written to address VI contamination.  VI, the new hot environmental topic, sparked the need for a revised VI screening standard (E2600-10) published in June 2010.  Although it is likely to become part of the AAI-compliant Phase I, institutions such as the U.S. Department of Housing and Urban Development (HUD) already require consultants to consider vapor encroachment as part of Phase I investigation. This practice is not currently required to fulfill the AAI standard. As stated in the revised HUD environmental review standards:

“The Phase I ESA must include an initial vapor (a.k.a. gas) intrusion screen to determine if there is a potential for vapors to occur in the subsurface below existing and/or proposed on-site structures from those hazardous substances, petroleum, and petroleum products that consist of volatile organic compounds (VOC) and semi-volatile organic compounds (SVOC) and inorganic volatile compounds.“

This new vapor encroachment assessment performed independently or combined with a Phase I ESA can assist prospective property owners with identifying and avoiding potential vapor intrusion issues and associated costs after a property has been acquired. Lenders can also use this as a screening tool to evaluate the potential for VI-related real estate de-valuation or foreclosure complications.