PFAS and Phase I ESAs: What CRE Buyers Should Ask

A Phase I ESA looks for conditions that point to releases of hazardous substances, and EPA made PFOA and PFOS hazardous substances under CERCLA effective July 8, 2024. EPA said in September 2025 that it is keeping that designation. The Phase I does not sample soil or water, so ask your environmental professional in writing how PFAS will be handled.

This article is general information, not legal advice. PFAS liability questions belong with your attorney.

Does a Phase I ESA cover PFAS?

It covers the PFAS that federal law treats as hazardous substances, and the answer for other PFAS depends on the scope you agree on.

The federal All Appropriate Inquiries rule, 40 CFR 312.20, says the standards and practices in the rule are intended to identify conditions indicative of releases and threatened releases of hazardous substances on, at, in, or to the property. Buyers follow this rule to qualify for CERCLA liability protection as an innocent landowner, contiguous property owner, or bona fide prospective purchaser, according to EPA.

Since July 8, 2024, PFOA and PFOS, including their salts and structural isomers, are hazardous substances under CERCLA. A release of either one at your target property is therefore the kind of condition the inquiry is meant to find. The designation covers those two substances. The rule does not name other PFAS.

EPA says ASTM E1527-21 is consistent with the All Appropriate Inquiries rule and can be used to comply with it. ASTM sells the standard, and we do not quote it here. Ask your environmental professional how the report treats PFAS and other emerging contaminants. EPA’s own list of “non-scope considerations” that clients can add as extra services gives lead-based paint, mold, radon, asbestos, regulatory compliance assessment, and indoor air quality as examples. It does not name PFAS.

What did EPA decide, and what is still open?

EPA announced the designation of PFOA and PFOS on April 17, 2024. The rule took effect on July 8, 2024. On September 17, 2025, EPA announced that it is retaining the designation and will develop a CERCLA section 102(a) Framework Rule to guide future designations.

The rule is under legal challenge. EPA’s Brownfields FAQ, last updated May 27, 2026, says that even though the rule is in litigation, PFOA and PFOS are currently hazardous substances under CERCLA. Check the status again close to your closing date.

Two other points from EPA matter to a buyer:

• EPA’s Brownfields FAQ says the designation does not change CERCLA’s liability framework and does not automatically assign legal liability to property owners with PFOA or PFOS contamination.
• In the September 2025 announcement, EPA’s Administrator said EPA will need new statutory language from Congress to fully address its concerns about “passive receiver” liability. That is a policy statement, not a change in the law.

Where might PFAS show up on a commercial site?

EPA gives a starting list of industries. Its 2021 preliminary Multi-Industry PFAS Study examined wastewater discharges from five groups: organic chemicals, plastics, and synthetic fibers manufacturing; metal finishing; pulp, paper, and paperboard manufacturing; textile mills; and commercial airports.

In the metal finishing group, EPA found that chromium electroplating facilities use PFAS-based mist and fume suppressants. EPA estimated that about half of the 1,339 chromium electroplating facilities in the United States still apply some type of PFAS-based suppressant.

That study measured discharges, not property sales. Use it as a prompt for questions about prior use:

• Did any past occupant plate metal, make or treat textiles, make paper, or manufacture chemicals or plastics?
• Was the site near or part of an airport?
• Do the interviews and records the environmental professional reviews mention these uses?

Older industrial buildings raise these questions most often. Our articles on adaptive reuse due diligence and historic commercial buildings show how a building’s past use shapes its risk.

What should you ask your environmental professional in writing?

Put the questions in your request for proposal or engagement letter, and keep the answers with the deal file.

1. Will the Phase I address PFAS? If yes, which substances: PFOA and PFOS only, or others?
2. How will the records review, interviews, and site visit screen for the past uses listed above?
3. Will the report state data gaps? The rule requires the report to identify data gaps that affect the professional’s ability to identify conditions indicative of releases, and to comment on how much they matter (40 CFR 312.21(c)(2)).
4. Will the report give the professional’s opinion on whether the inquiry found conditions indicative of releases (40 CFR 312.21(c)(1))?
5. If the Phase I points to a PFAS concern, what is the next step, and who prices it?
6. Does your lender or counsel have its own PFAS language to add to the scope?

What can a Phase I not tell you?

A Phase I cannot tell you whether PFAS is present, or at what concentration. The rule’s components include records review, interviews, a visual inspection of the property and adjoining properties, searches for recorded cleanup liens, and a declaration by the environmental professional (40 CFR 312.20(b)). EPA lists “Phase II sampling and analysis” as an additional service beyond the rule.

Cleanup and screening levels also sit outside the Phase I. EPA’s Brownfields FAQ says states and Tribal Nations oversee site assessment and cleanup and that stakeholders should look to State or Tribal Response Programs for screening and cleanup levels. Your state program, not the Phase I, sets that bar.

Next step

If PFAS is a concern on a deal, say so when you request a Phase I. Our Phase 1 ESA service follows ASTM E1527-21 and includes a site inspection, historical records review, regulatory database search, and interviews. You can request a proposal and list your PFAS questions in the scope. For the full timeline of a deal, see our guide to due diligence in commercial real estate.

Sources

• EPA: Designation of PFOA and PFOS as CERCLA Hazardous Substances
• EPA news release, September 17, 2025: next steps on PFOA and PFOS
• EPA Brownfields FAQ: what the PFOA and PFOS designation means
• EPA: Brownfields All Appropriate Inquiries
• 40 CFR 312.20, All appropriate inquiries (eCFR)
• 40 CFR 312.21, Results of inquiry by an environmental professional (eCFR)
• EPA: Multi-Industry PFAS Study, preliminary 2021 report (PDF)