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Entities that acquire property and had no knowledge of the contamination at the time of purchase may be eligible for the "innocent landowner" (ILO) defense to Superfund liability if they conducted all appropriate inquiries (AAI) prior to purchase and complied with other pre- and post-purchase requirements.
Superfund distinguishes between three types of landowners:
- Purchasers who acquire property without knowledge of contamination on the property.
- Governments acquiring contaminated property involuntarily or through the exercise of eminent domain authority by purchase or condemnation.
- Inheritors of contaminated property.
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In 1989 EPA issued guidance titled "Guidance on Landowner Liability under Section 107(a) of CERCLA, de minimis Settlements under Section 122(g)(1)(B) of CERCLA, and Settlements with Prospective Purchasers of Contaminated Property" (6/6/1989). The guidance equated EPA’s de minimis landowner settlement authority with the landowner’s ability to defend using the innocent landowner defense. Model documents associated with this policy were updated on September 26, 2014. [For more information see "Revisions to 2009 ARC Memo and Issuance of Revised CERCLA Past Cost, Peripheral, De Minimis, and Municipal Solid Waste Settlement Models."]
The 2002 Brownfields Amendments partially amended the innocent landowner defense by elaborating on the all appropriate inquiries requirement.
Threshold Criteria and Ongoing Obligations
To qualify as an ILO, 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")."
Like contiguous property owners (CPOs), persons desiring to qualify as innocent landowners must perform "all appropriate inquiries" prior to purchase and cannot know, or have reason to know, of contamination in order to have a viable defense as an innocent landowner.
An ILO 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.
EPA provides guidance on these criteria and obligations in its Common Elements guidance for landowner liability protections.
- Bona fide prospective purchasers (BFPPs)
- Contiguous property owners (CPOs)
- Enforcement tools that address liability concerns