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So You Purchased a Property with Environmental Concerns....

May 2, 2017

 

 

If you purchased property with environmental concerns and now need to rely on the landowner liability protections offered under the All Appropriate Inquiry Rule (40 CFR Part 312), there are several continuing obligations you must satisfy to rely on those defenses to liability.  In order to be eligible for the innocent landowner, contiguous property owner, or bona fide prospective purchaser liability limitations under  the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the owner or occupant must: (1) prove relevant discharge or disposal predates your ownership or occupation; (2) document that all appropriate inquiries (AAI) into the site's history were made prior to purchase (i.e., completed an AAI-compliant Phase I ESA); (3) provide all required notices regarding any discovered contamination; (4) exercise "appropriate care" with respect to hazardous substances found at the property by taking reasonable steps to contain and prevent further contamination; (5) fully cooperate with all authorized remediation personnel; (6) comply with all required institutional controls; (7) respond to all subpoenas and information requests; and (8) prove you are not affiliated with any prior owner or operator.  Failure to comply with any of these continuing obligations may render you ineligible for liability limitations. 

 

In some cases, you may want to seek a Comfort Letter or Status Letter from the U.S. Environmental Protection Agency or appropriate state agency.  These letters are designed to relay property information known by the regulatory agency, as well as any applicable statutes, regulations, and regulatory guidance, including the status of the property and potential for regulatory agency involvement, to interested parties.  The purpose of these letters is to help interested parties better understand the potential applicability of environmental regulations to individual properties so that informed decisions regarding property transactions can be made. The letters are not intended to alter liabilities or obligations that may be required under applicable laws.

 

 This article was written by Jennifer Lindquist, PG, of CK Associates.  CK is a corporate member of the LBA.  For more information, contact Jennifer at jennifer.lindquist@c-ka.com.

 

 

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