Guest blog written by Robert G. Westfall
www.barrettlaw.com
The federal “Superfund” law, formally known as the Comprehensive Environmental Recovery, Compensation, and Liability Act (“CERCLA”), imposes harsh liability on a range of entities associated with an environmentally contaminated site. The law’s liability scheme casts a wide net in an effort to fund remediation of such sites. However, in its first two decades, one unwanted byproduct of CERCLA was a chilling effect on the redevelopment of contaminated properties, which sat vacant and unproductive. These dormant sites, often in older urban areas, became known as “Brownfields”.
In 2001, Congress passed the Small Business Liability Relief and Brownfields Revitalization Act (the “Brownfield Amendments”) which amended CERCLA to encourage the redevelopment of Brownfields. CERCLA defines a Brownfield as “real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.”[1] Under the Brownfield Amendments, qualifying prospective purchasers can be protected from any potential liability for historical environmental contamination at the Brownfield.
Beyond environmental liability protection, the Brownfield Amendments attempt to encourage the redevelopment of Brownfields by instituting various grant programs that defray the costs of environmental investigation and cleanup incurred by the property owner. These programs are implemented at both the federal and state level and provide funding for, among other things, environmental assessments, remediation projects, and environmental job-training.
With the trend toward revitalization of downtown urban spaces, Brownfield redevelopment has played, and will continue to play, an important role. Well-known examples include: Atlanta’s redevelopment of the former Atlantic Steel Mill into a 138-acre mixed-use neighborhood known as Atlantic Station; Homestead, Pennsylvania’s redevelopment of a Carnegie Steel site to an open air shopping center called The Waterfront; and Seattle’s Gas Works Park which redeveloped the site of the former Seattle Gas Light Company’s gasification plant.
Real estate agents brokering deals for the purchase and sale of Brownfields generally do not face direct liability under CERCLA or its associated state laws. However, agents should guard against any potential exposure to the purchaser that may arise from its agent duties. For example, an agent must be careful to not make any representations regarding the environmental condition of the property, and instead encourage the prospective purchaser to thoroughly investigate the environmental aspects of the site before purchasing. The agent can also make the prospective buyer aware of the possibility of liability protections and Brownfield grants that may be available under current law to address environmental concerns with the property. Because each property is unique and the protections and funding available will be dependent on the specific facts of the site, it is a good idea for agents to encourage buyers to seek the advice of environmental legal counsel when considering a Brownfield transaction.
