Environmental Liability Associated With Real Estate Transfers
| Publication year | 1993 |
| Pages | 67 |
| Citation | Vol. 22 No. 1 Pg. 67 |
1993, January, Pg. 67. Environmental Liability Associated With Real Estate Transfers
Since the 1970s, buyers, sellers and owners of real property have been confronted with the challenge of complying with a host of confusing and sometimes overlapping federal and state laws that were adopted to protect public health and safety and the environment. The most familiar of these laws are the two broadest federal statutes: the Resource Conservation and Recovery Act ("RCRA")(fn1) and the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"),(fn2) more commonly known as Superfund.
This article discusses certain provisions of RCRA and CERCLA as well as federal case law, and how they impact parties involved in real property transactions.
RCRA governs the present-day management of hazardous wastes and provides for the development and implementation of a program regulating underground storage tanks ("USTs") containing either petroleum products or substances defined as "hazardous" under CERCLA.
CERCLA is the only federal law that responds to environmental problems caused by past releases of hazardous substances to all environmental media (air, water and land). Unlike other environmental laws, which allow for the discharge of some quantity of pollutants, CERCLA prohibits the release of any amount of a hazardous substance to the environment.(fn3)
Informed sellers of real property know they may be held responsible for injuries to public health and safety and the environment caused by the release of a hazardous substance or waste if they are the current owner of a contaminated property or if they owned the property at the time the contamination occurred.(fn4) What is new in recent cases is the expansion of the scope of liability. Courts are now holding sellers of contaminated property responsible for clean-up costs and statutory add-ons, such as attorney fees, even when the contaminated property is sold with full disclosure to the purchaser or the property is not in a contaminating condition at the time of sale.
RCRA was enacted in 1976 as an amendment to the Solid Waste Disposal Act ("SWDA").(fn5) The purpose of RCRA is to provide a comprehensive regulatory program for the management of hazardous wastes from the point of generation to ultimate disposal. Regulations promulgated under RCRA prescribe detailed requirements for anyone who generates, transports, treats, stores or disposes of hazardous wastes.(fn6)
Under RCRA, the term "disposal" is defined as "the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste" on the land or water in such a way that the waste enters the environment.(fn7) In U.S. v. Waste Industries,(fn8) the Fourth Circuit interpreted this definition to include the leaking of a waste into the environment, not as active human conduct but merely as movement of the waste in the surrounding soil and groundwater. Supporting this interpretation of the term "disposal, " the court in Zands v. Nelson(fn9) held that former property owners may be liable for cleanup costs associated with a leaking UST, even though these individuals did nothing to contribute to the contamination. To establish liability, the plaintiffs only had to show that the defendants owned the property at the time the leak occurred. In fact, the court ruled that if the plaintiffs
Most recently, the Fourth Circuit reached the same general conclusion in Nurad v. Wm. E. Hooper & Sons.(fn10) The court stated that "hazardous waste may leak or spill [and liability may accrue] without any active human participation." The court concluded that former owners may be...
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