The Superfund liability defense for bona fide prospective purchasers
The 2002 Brownfield Amendments to the Superfund law (CERCLA) provide a Superfund liability defense for property owners who qualify as "bona fide prospective purchasers" of known contaminated property, as long as the property transaction was completed after Jan. 11, 2002.
To become a bona fide prospective purchaser (BFPP), you must, prior to a purchase, conduct a Phase I environmental assessment that meets federal requirements for All appropriate inquiries (AAI). This federal standard is contained in 40 CFR Part 312 and may be met by following ASTM Standard E 1527-13. For more information, see our AAI page.
In addition, to qualify as a bona fide prospective purchaser you must also comply with EPA's continuing obligations for bona fide prospective purchasers, which require that you:
- not contribute to the contamination at any time, stop continuing discharges and prevent threatened discharges;
- not have any affiliation with persons potentially liable for response costs at the property;
- comply with any environmental land use controls imposed by the state;
- take reasonable steps regarding the contamination (e.g., install fencing, if needed to protect public health); and
- cooperate with those cleaning up the property, comply with information requests and provide any legally required notices.
How to obtain the BFPP defense
Bona fide prospective purchaser status is not hard to obtain if you complete AAI before the property transaction is completed and comply with the continuing obligations listed above. Even if the AAI assessment discovers contamination, you may still qualify as a bona fide prospective purchaser with a Superfund liability defense, because this legal defense covers those who purchase property knowing, or having reason to know, of contamination on the property.
Those who purchased property prior to Jan. 11, 2002, may still pursue a Superfund liability defense under EPA's "innocent landowner" provisions. In this case the purchaser must have completed an AAI-similar assessment prior to purchase, and must have completed the purchase "without knowing, or having reason to know" of contamination on the property. In addition, they must comply with the continuing obligations listed above.
For more information from EPA about Superfund liability and the liability defenses that may be established through AAI, please see the EPA Common Elements Guidance Reference page. Superfund does not include liability for contamination from petroleum. For more information regarding federal liability, contact the Region 5 Superfund program.
While assessing a property for contamination prior to purchase may provide a Superfund liability defense, it's important to understand that there is NO equivalent protection under Wisconsin state law. In general, the person responsible for contamination is defined by Wisconsin law as one who "causes," "possesses" or "controls" the contamination (i.e., purchases or owns property with a contaminant discharge or owns a container that has ruptured). These general requirements are established in sections 292.11 and 292.31, Wis. Stats., and Chapters NR 700 to 754, Wis. Adm. Code. A person in Wisconsin that is responsible for a discharge to the environment is required to report, investigate and clean up the contamination.
Nonetheless, state statutes provide certain liability exemptions for local government units, lenders and those affected by contamination from another property. Others may qualify for post-cleanup liability exemptions by following appropriate procedures. For more information about Wisconsin liability, see Environmental liability.