Cleanup Enforcement

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.

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 can apply regardless of the type of contaminated site involved. 

Common Elements
All Appropriate Inquiry
Reasonable Steps
Residential Property Owners
Financial Institutions

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

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") (PDF)," (22pp, 366KB, About PDF) 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.  More information on all appropriate inquiries is available from EPA’s All Appropriate Inquiries Web site.

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 (except those created by the instruments by which title is conveyed or financed, or by a contract for the sale of goods or services),
• 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. 

Residential Property Owners

In 1991, EPA issued its Policy Towards Owners of Residential Properties at Superfund Sites (PDF) (10pp, 505KB, About PDF) 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 (i.e., all appropriate inquiry) 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.

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