Enforcement

Landowner Liability Protections

Historically, under Superfund the owner or operator of a contaminated property could be held responsible for the property's cleanup, based solely on his/her current ownership of the property. In 2002, the Small Business Liability Relief and Brownfields Revitalization Act  ("2002 Brownfields Amendments") changed the liability landscape by providing important protections from Superfund liability to landowners who meet certain statutory criteria.

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The liability protections are for landowners who qualify as

  • bona fide prospective purchasers (BFPPs)
  • contiguous property owners (CPOs), or
  • innocent landowners (ILOs)

The landowner liability protections are self-implementing and EPA generally will not need to be involved in site-specific determinations about their potential applicability. They also apply regardless of the type of contaminated site involved.

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More information on cleanup enforcement landowner liability policy and guidance is available from the liability-landowner category in the Superfund enforcement policy and guidance database.

The Revitalization Handbook (March 2011) provides a compilation of enforcement guidance and tools used to address potential landowner liability concerns that may remain despite the self-implementing nature of the 2002 landowner liability protections.

Common Elements

In March 2003, EPA issued guidance to address the criteria and obligations landowners must meet to obtain liability protection from Superfund. 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")," describes the overlapping threshold criteria and ongoing obligations that all three landowner types must meet and thus the shorthand name for the guidance.

Applicability of “Common Elements” to Bona Fide Prospective Purchasers, Contiguous Property Owners, and Innocent Landowners
Common Elements BFPP CPO ILO
All Appropriate Inquiry
No affiliation demonstration *
Compliance with land use restrictions and institutional controls
Taking reasonable steps
Cooperation, assistance, access
Compliance with information requests and administrative subpoenas *
Providing legally required notices *

* For further explanation regarding innocent landowner obligations see Attachment A of the Common Elements guidance.

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All Appropriate Inquiry

One of the important statutory criteria BFPPs, CPOs and ILOs must meet is performing all appropriate inquiry prior to purchasing property. Performing "all appropriate inquiries" (AAI) is the process of evaluating a property’s environmental conditions and assessing potential liability for any contamination.

EPA published a final rule on standards and practices for all appropriate inquiries (PDF) (44 pp, 342 K, About PDF) in the November 1, 2005 Federal Register. The Final Rule was updated on December 30, 2013 to reference the latest version of ASTM’s International’s voluntary standard for conducting a Phase I environmental site assessment (ASTM E1527-13) (78 Fed. Reg. 79,319 (PDF)(6 pp, 235 K, About PDF). More information on AAI is available on EPA’s All Appropriate Inquiries website

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Affiliation

A BFPP or CPO must not be "affiliated" with any other person who is potentially liable for response costs. Affiliations include:

  • Direct or indirect familial relationships.
  • Contractual, corporate, or financial relationships.
  • For BFPPs, there is an exception for contractual, corporate or financial relationships that are created by the instruments by which title is conveyed or financed, or by a contract for the sale of goods or services.
  • The result of a business reorganization.

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Reasonable Steps

Another requirement for BFPPs, CPOs and ILOs is the obligation to take "reasonable steps" with respect to hazardous substances on their property. EPA may issue comfort/status letters discussing site-specific reasonable steps at sites where EPA has sufficient involvement to have a basis for suggesting such steps.

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Tenants

The EPA’s Revised Enforcement Guidance Regarding the Treatment of Tenants Under the CERCLA Bona Fide Prospective Purchaser Provision was issued in December 2012 to address leaseholder concerns about liability when they are involved in the cleanup and reuse of contaminated properties. The guidance discusses the potential applicability of the BFPP provision to tenants who lease contaminated or formerly contaminated properties and how the Agency intends to exercise its enforcement discretion to treat certain tenants as BFPPs under CERCLA.

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Residential Property Owners

In 1991, EPA issued its Policy Towards Owners of Residential Properties at Superfund Sites to relieve residential owners of the fear that they might be subject to an enforcement action involving contaminated property, even though they had not caused the contamination on the property.

Residential property owners that purchase contaminated property after January 11, 2002, can also take advantage of the statutory BFPP protection by clarifying the type of pre-purchase investigation that a residential property owner must conduct, e.g., an inspection and title search.

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Financial Institutions

EPA initially tried to address the concerns of lenders and municipalities through the Lender Liability Rule promulgated in 1992. However, in 1995 a federal court ruling vacated the Lender Liability Rule and as a result, EPA adopted it as enforcement policy.

But lenders were concerned that EPA’s 1995 enforcement policy did not apply to contribution actions brought by third parties attempting to recover their Superfund response costs from lenders. Partly in response to these concerns, Congress enacted the Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996, which amended Superfund’s secured creditor exemption under the owner/operator definition.

More information on lender liability is available from the liability-lenders category in the Superfund enforcement policy and guidance database.

Learn more about landowner liability:

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