Tuesday, January 8, 2013

SuperFund Liability Protections Extended To Qualified Property Tenants

EPA is extending liability relief for tenants leasing property on brownfields or other contaminated properties, in response to liability concerns raised by developers who wish to participate in an EPA effort to place renewable energy projects on potentially contaminated land. EPA has issued new guidance that broadens a measure passed in a 2002 brownfields statute designed to protect bona fide prospective purchasers (BFPPs) from cleanup liability at contaminated sites, permitting tenants to qualify for BFPP safeguards even if the property owner is not a BFPP.

The protections extended by the guidance are found in section 107(r) of the Comprehensive Environmental Response, Compensation & Liability Act (CERCLA). The new guidance directs EPA to provide the liability protections via the application of enforcement discretion aimed at treating certain tenants as BFPPs under CERCLA. EPA may refuse to exercise enforcement discretion where the lease is designed to allow a landlord or tenant to avoid CERCLA liability or the tenant is liable for reasons beyond its tenant status, such as for arranging for hazardous substance disposal at the site. The amended guidance places greater onus on tenants to satisfy BFPP criteria, especially demonstrating that all disposal of hazardous substances occurred before execution of the lease.

What are BFPP Criteria?

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