Landowner Liability Protections

Landowner Liability Protections from the 2002 Brownfields Amendments

The 2002 Small Business Liability Relief and Brownfields Revitalization Act (Brownfields Amendments) provides important protections from Superfund liability to landowners who meet certain criteria. The liability protections are for landowners who qualify as:

 

Bona Fide Prospective Purchasers

To encourage the acquisition and development of brownfields, the Brownfields Amendments established this defense. A bona fide prospective purchaser is a person who acquires ownership of a facility after Jan 11, 2002, and who establishes the following by a preponderance of evidence:

  • The hazardous substances disposal occurred before the purchaser acquired the property;
  • The purchaser made all appropriate inquiries (i.e., conducted a Phase I Environmental Site Assessment (ESA)) into the previous ownership and uses of the facility;
  • The purchaser has no affiliation with any potentially responsible party; and
  • The purchaser complies with all continuing obligations after acquiring the property, as described at https://www.epa.gov/enforcement/bona-fide-prospective-purchasers

 

Contiguous Property Owners

A contiguous property owner defense can be claimed by a person who owns property that is contiguous to a facility that is the only source of contamination that impacted the person’s property and must show that:

  • The person did not cause, contribute to, or consent to the release or threatened release of hazardous substances;
  • The person made all appropriate inquiries (i.e., conducted a Phase I ESA) into the previous ownership and uses of the facility;
  • The person did not know and had no reason to know that the property was or could be contaminated by a release or threatened release of hazardous substances from other real property not owned or operated by the person;
  • The person had no affiliation with any potentially responsible party; and
  • The person complied with all continuing obligations after acquiring the property, as described at: https://www.epa.gov/enforcement/contiguous-property-owners

 

Innocent Landowners

An innocent landowner is a purchaser (or a person that inherited property) who does not know and has no reason to know of the hazardous substance contamination at the time of purchase. To be eligible, a landowner must show that:

  • The landowner acquired property after all hazardous substances were disposed of at the facility;
  • On or before the acquisition date, the landowner conducted all appropriate inquiries (i.e., conducted a Phase I ESA) into the previous ownership and uses of the facility;
  • The landowner did not know, and had no reason to know, of the hazardous substance contamination at the time of purchase;
  • The landowner exercised due care with respect to the hazardous substance concerned; The landowner took adequate precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions; and
  • The landowner complied with all continuing obligations after acquiring the property, as described at: https://www.epa.gov/enforcement/innocent-landowners

Basic Elements of Phase I and Phase II Environmental Site Assessments

Environmental Site Assessments (ESAs) have been developed to evaluate environmental issues at any site previously used for commercial purposes. ESAs generally are performed in two stages, Phase I and Phase II, with remediation following if deemed necessary following the completion of both phases. Standards for the Phase I and Phase II ESAs have been established by the American Society for Testing and Materials (ASTM) to address the “All-Appropriate-Inquiry” (AAI) aspect to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

 

Phase I Environmental Site Assessments (ASTM E1527-13) typically consist of four tasks:

  1. Gathering information about past and present uses of the site;
  2. Inspection of the site by an environmental professional, usually accompanied by someone familiar with the property;
  3. Reviewing environmental files maintained by the site owner and regulatory agencies;
  4. Preparing a report that identifies existing and potential sources of contamination on the property.

The result of a Phase I ESA determines the need for further site investigation, i.e., the need for any type of environmental sampling and analysis or may indicate that further investigation is not warranted.

 

Phase II Environmental Site Assessments (ASTM E1903-11) focus on gathering specific information as required about the property and can include the following tasks:

  • Surface and subsurface soil sampling, groundwater and surface water sampling, soil vapor sampling (along with laboratory analysis), sediment sampling, collection of plant or aquatic species samples;
  • Above/underground storage tank content and tightness testing, asbestos containing material (ACM) sampling, PCB sampling and identification, geomagnetic or geophysical surveys;
  • Directly measuring conditions such as noise levels or radiation;
  • Using environmental fate or transportation models to evaluate the potential migration of the contamination.

The result of a Phase II ESA is the determination of the need for a work plan for cleanup and may also allow the determination of whether conditions or events at the site are causing or likely to cause adverse effects and will require notification to the appropriate regulatory authority.