Enforcement

Bona Fide Prospective Purchasers

The bona fide prospective purchaser (BFPP) provision in the 2002 Brownfields Amendments dramatically changed the Superfund liability landscape for landowners.

Persons may now acquire property knowing, or having reason to know, of contamination on the property if they:

  • acquire property after January 11, 2002,
  • meet the threshold criteria and ongoing obligations outlined below, and
  • do not impede the performance of a response action or natural resource restoration.

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Threshold Criteria and Ongoing Obligation

To qualify as a BFPP, a landowner must meet certain criteria, which is described in the "Interim Guidance Regarding Criteria Landowners Must Meet in Order to Qualify for Bona Fide Prospective Purchasers, Contiguous Property Owner, or Innocent Landowner Limitations on CERCLA Liability ("Common Elements")"  (3/6/2003).

To receive the liability protection under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, commonly known as Superfund), a BFPP must perform "all appropriate inquiries" prior to acquiring the property, and demonstrate "no affiliation" with a liable party.

A BFPP must also satisfy the following obligations:

  • compliance with land use restrictions and not impeding the effectiveness or integrity of institutional controls;
  • taking “reasonable steps” with respect to hazardous substances affecting a landowner’s property;
  • providing cooperation, assistance and access;
  • complying with information requests and administrative subpoenas; and
  • providing legally required notices. 

EPA provides guidance on these criteria and obligations in its Common Elements guidance for landowner liability protections.

Windfall Lien

The Superfund statute provides that a BFPP is not liable as an owner/operator for response costs. However, the United States may have a "windfall lien" on a BFPP’s property where an EPA response action increased the fair market value of the property. The amount sought as a windfall lien shall be the lesser of the unrecovered response costs or the increase in fair market value at the property attributable to the Superfund cleanup.

Windfall liens arise only where there is federal involvement at a site. At the vast majority of contaminated sites, there is no federal involvement and, therefore, no windfall lien.

EPA’s "Interim Enforcement Discretion Policy Concerning ‘Windfall Liens’ Under Section 107(r) of CERCLA" (7/16/2003) identifies the factors that may lead the United States to assert a windfall lien on a BFPP’s property. The policy also provides examples of situations where EPA will generally not pursue a windfall lien and describes EPA and DOJ’s approach to settling windfall liens. Finally, the policy provides model comfort/status letters and agreements that EPA may provide in order to address a BFPP’s windfall lien concerns. More information on windfall liens is available from the liens category in the Superfund enforcement policy and guidance database.

EPA issued the "Windfall Lien Administrative Procedures" guidance in 2008. This guidance builds on the Interim Enforcement Discretion Policy by providing guidance on:

  • the timing for filing notice of a windfall lien on a property after it is purchased by a BFPP, and
  • EPA's administrative procedures that should accompany filing a windfall lien notice.

The 2008 guidance includes a "Model Notice of Intent to File a Windfall Lien Letter" that EPA intends to use in order to notify the current owner prior to filing the notice.

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