EPA Publishes Final Rule on All Appropriate Inquiries Required for Real Estate Purchases / Leases…Final Rule Effective November 1, 2006
It is imperative for prospective purchasers / lessees of real estate to be aware of the Environmental Protection Agency’s new final rule which sets the standards for the conduct of “all appropriate inquiries” into the previous ownership, uses and conditions of a property if the purchaser / lessee wants to qualify for landowner liability protections under the Superfund Law, also known as CERCLA.
The final rule was published on November 1, 2005 in the Federal Register and it becomes effective one year later, on November 1, 2006.
Why should you as a prospective real estate purchaser / lessee care about the environmental condition of the property you are considering buying or leasing? You didn’t cause any environmental problems…you shouldn’t have liability, right? Wrong. Liability for property contamination is strict, retroactive and joint and several—anyone who owns or leases contaminated property is a potentially responsible party, even if they did not cause the contamination. The only way to protect yourself as a prospective landowner, contiguous landowner or tenant is to “check out” the property before you buy or lease it strictly following the federal standards [or its ASTM equivalent] for conducting such appropriate inquiries into the previous ownership, uses and conditions of the property you are considering buying or leasing.
The newly prescribed All Appropriate Inquiry Rule can be found on the USEPA website at www.epa.gov and its ASTM standard equivalent is ASTM E 1527-05. Until the effective date of November 1, 2006, persons may continue to use the interim standard, ASTM E 1527-00.
Don’t be fooled into relaxing your standards when buying or leasing real estate. If you buy or lease contaminated property, you will be a potentially responsible party that the government may sue to recover the costs of investigating and cleaning up contaminated property even if you had nothing to do with the cause of the contamination—unless you can demonstrate that you conducted “All Appropriate Inquiries” about the property in question before you bought or leased it. The investigation and remedial costs often far exceed the cost of the real estate. Conduct All Appropriate Inquiries before buying or leasing property.
For assistance on how to obtain a qualified consultant to conduct and document that All Appropriate Inquiries were done, contact Kathleen E. Stimler at kstimler@stimlerlawoffices.com.
