In 1980, the government passed a law called CERCLA, which made people responsible for cleaning up hazardous substances on their property, even if they didn’t cause the contamination. This law has made investing in real estate much riskier because now people can be held responsible for cleaning up hazardous substances on their property, even if they didn’t know about it when they bought it. The law also says that people have to take precautions to prevent any harm from the hazardous substances. This means that anyone who owns or controls property has to act responsibly to avoid releasing hazardous substances. So, it’s important for people investing in property to learn what’s considered responsible behavior in different property transactions. It’s better to ask questions than to know all the answers. CERCLA makes it a liability to not know about potential environmental issues when buying property. Investors need to do a thorough check before buying to avoid getting in trouble under CERCLA. Courts haven’t given much guidance on what counts as a thorough check, but it’s better to be safe and do a detailed investigation. This also applies to any indirect property interests. So, it’s important for investors to have procedures in place to check for environmental issues before buying any property. Once you know something, you can’t un-know it. After a company is bought by another company, the new owners are responsible for making sure everything is running properly and legally. Investors and property owners need to be careful about buying land that may have hazardous waste. Once contamination is discovered, CERCLA law requires the owner to take precautions to prevent it from getting worse. They also need to disclose the contamination to any new buyers. They can be held responsible for contamination that was there before they bought the property, even if they didn’t know about it. It’s important for investors to make sure they don’t have too much control over properties that might have contamination, and to take steps to prevent further harm. Caveat emptor (buyer beware) doesn’t protect you from CERCLA liability. If you don’t disclose hazardous substances on a property before selling it, you could lose your innocence defense and be liable for cleanup costs. It’s important to disclose any known contamination to potential buyers. If you don’t, you could lose the right to recover costs from the actual wrongdoers and be stuck with expensive legal actions. So, it’s best to ask about CERCLA issues before buying property, take care of the property properly, and tell buyers about any contamination. This will help you protect yourself from CERCLA liability while still enjoying the benefits of real estate investments. CERCLA, a law about environmental contamination, has been amended and refined over the years. There are various court cases that show how this law has been applied in different situations. The law holds people or companies responsible for hazardous substance releases on their property, unless they can prove they were not aware of the contamination. There are certain defenses and protections for innocent landowners, but they must show they took reasonable care and precautions before buying the property. But even if you buy a property without knowing about contamination, you may still be held responsible if you don’t investigate properly. There are also protections for lenders and secured interest holders, but they also have a responsibility to be careful and investigate before getting involved in a property with contamination issues. Overall, the law tries to make sure people are responsible for cleaning up environmental contamination, and it’s important to do thorough research before buying any property. Judith S. Kavanaugh and William L. Earl are lawyers who focus on environmental and land use law in Sarasota and Miami. They help clients with issues related to the environment and work with state and federal courts. They are part of a group called the Environmental and Land Use Law Section, which aims to educate its members about their responsibilities to the public and improve the legal system.
Source: https://www.floridabar.org/the-florida-bar-journal/cercla-investor-liability-dont-ask-dont-tell-wont-work/
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