U.S. EPA has issued its final rule governing when a prospective purchaser or existing landowner may properly invoke one of three popular defenses to liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The defenses are commonly known as “innocent landowner,” “prospective purchaser,” and “contiguous property.” The new EPA final rule specifies what a landowner or purchaser must do in terms of required investigation of potentially contaminated sites to qualify for these defenses in the face of a subsequent action under CERCLA.

The 2002 Brownfields Amendments to CERCLA, providing for additional federal funds for brownfield remediation and development, required that landowners conduct “all appropriate inquiries” about the previous ownership and uses of a subject property. [See CERCLA sections 101(35)(B)(ii) and (iii), and section 104(k)(2)(B).] The EPA final rule, which takes effect as of November 1, 2006, defines how the “all appropriate inquiries” standard is met. The rule references a new American Society for Testing and Materials (ASTM) standard, ASTM E1527-05, entitled Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, and spells out what at minimum a due diligence property assessment must include for purposes of CERCLA. The EPA final rule can be found in the Nov. 1, 2005 Federal Register, 70 FR 66070, Standards and Practices for All Appropriate Inquiries 40 CFR Part 312.

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