february 2002

Purchasers of Brownfields Properties Now Protected by Superfund Law Amendment

BACKGROUND

A purchaser of property discovering contamination during due diligence was liable for that contamination under federal Superfund law. The law has recently been amended to create a Bona Fide Prospective Purchaser exception. Now, a purchaser discovering contamination while conducting an appropriate inquiry as defined by the new law may proceed with the purchase and be protected from liability for that contamination, as long as certain steps are followed after the purchase. Those steps include providing notices of the contamination to the appropriate authorities, taking reasonable steps to prevent releases and preventing or limiting human, environmental or natural resource exposure to the contamination.

In the same legislation the Superfund law was also amended to include:

Clarification of the appropriate due diligence necessary for purchasers to benefit from the existing Superfund law innocent landowner defense.

New protections to an owner of property that may be affected by the migration of contamination from neighboring properties, and;

Increasing the amount of funding available to state and local governments to aid brownfields site remediations.

WE RECOMMEND

If you are considering acquiring a brownfields property, conduct the appropriate due diligence and take all necessary post-purchase steps to take advantage of the new law.

If you have any questions concerning the Bona Fide Prospective Purchaser Defense, please contact Richard J. Ericsson.