A few months ago, I had the opportunity to speak with Patricia Overmeyer, who led EPA’s project to define all appropriate inquiries – the actions property buyers must take to attempt to identify environmental contamination of properties before acquisition. (Click here for my related post.) She expressed concern that some property buyers have stopped short of EPAs requirements to qualify for Landowner Liability Protections, LLPs.
When correctly executed, Landowner Liability Protections extend to:
- Innocent landowners – Buyers who did not know or have reason to know of the presence of contamination
- Bona fide prospective purchasers – Buyers who knew of and took appropriate steps to control contamination
- Contiguous property owners – Buyers whose property is contaminated as a result of migration from another property that they do not own or operate.
(These definitions are simplified. For specific instances and application, GRS Group advises consultation with legal counsel.)
Each of these defenses requires that the buyer complete all appropriate inquiries before acquiring the property and have no affiliation with the responsible party. What some buyers have overlooked; however, is that when contamination is present defenses to liability can be lost unless the buyer:
- Complies with land use restrictions and institutional controls
- Takes reasonable steps with respect to hazardous substances on the property (stops continuing releases, prevents future releases, prevents or limits exposure to the release)
- Cooperates, assists and provides access
- Complies with information requests and administrative subpoenas; and
- Provides legally required notices.
These requirements apply even if contamination is found after acquisition of the property. Though courts will determine the applicability of defenses in each case, the burden of proof supporting claims of landowner liability protections falls with the buyer.
EPA has issued guidance on these common elements of defenses to liability. (Click here to access EPA guidance from our archive.)
Something else to be aware of – though a Phase I may identify institutional controls, engeineering controls, or land use restrictions; it is beyond the scope of the Phase I to identify all such controls, evaluate the adequacy of controls or the status of compliance, or to develop a plan to assure long term compliance.
ASTM has published guidance concerning this more detailed evaluation of Continuing Obligations (E2790) as well as the use of Engineering Controls (E2091).
Note: You are encouraged to seek experienced legal counsel regarding these issues. Information provided above is intended for informational purposes only, and is not to be construed as legal advice.