-
PoCcy. Phoning and
Evaluation
•SERA Selected Current
in Property Transfer
Environmental Assessment
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SELECTED CURRENT PRACTICES
IN PROPERTY TRANSFER
ENVIRONMENTAL ASSESSMENT
March 1989
Prepared for:
The U.S. Environmental Protection Agency
Regulatory Innovations Staff (PM-223)
401 M St., S.W.
Washington. D.C. 20460
James E. Hayes
Project Manager
Prepared by:
Policy Planning & Evaluation, lac
8521 Leesburg Pike, Suite 540
Vienna, VA 22182
and
• ENSR Corporatioa
19782 MacArthur Blvd, Suite 365
Irvine, CA 92715
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NOTICE
This report has been prepared under contract No. 68-01-7252 for the
Regulatory Innovations Staff, Office of Policy Planning and Evaluation,
U.S. Environmental Protection Agency. The programs and procedures
described in this report were selected to provide instructive examples
of property transfer environmental assessment practices. The report
reflects the findings and conclusions of the authors and not necessarily
those of EPA or any other government entity; any mention of conpany
names, products or processes does not constitute EPA endorsement. The
identity of certain corporate programs has been withheld upon request.
Neither the authors nor the participating companies make any warranty or
assume any liability with respect to the use of any information
contained in this report. If specific compliance advice or assistance
is required, the services of a competent professional should be sought.
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np CONTENTS
PAGE NO.
EXECUTIVE SUMMARY i
I. INTRODUCTION 1-1
A. BACKGROUND 1-1
B. REQUIREMENTS UNDER SARA 1-2
II. FEDERAL AGENCY PRACTICES II-l
A. INTRODUCTION II-l
B. THE DEPARTMENT OF DEFENSE II-2
C. THE DEPARTMENT OF AGRICULTURE II-4
D. THE DEPARTMENT OF THE INTERIOR II-5
III. STATE IJWS AND REGULATIONS III-l
A. INTRODUCTION III-l
B. NEW JERSEY IH-1
C. MASSACHUSETTS IH-4
D. CALIFORNIA IH-9
1. Senate BUI 245 and Assembly Bill 924 IH-10
2. Cortese List of Hazardous Substance Sites HI-11
3. Registration of Environmental Assessors III-ll
B. CONNECTICUT ITI-12
F. ILLINOIS IU-14
IV. POLICIES AND PRACTICES OF PRIVATE i PUBLIC INSTITUTIQNB 3V-1
A. PRIVATE INSTTTUTICNB IV-1 '
1. Policies and Procedures of a Connecticut
Financial Institution IV-2
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PAGE HO.
IV. PRIVATE & POBTJC INHTriVriCtB (CDNT'D)
2. Policies and Procedures of a California
Financial Institution IV-3
3. Policies and Procedures of a National
Real Estate Group iv-6
B. POBLCC BcrrrivricNB rv-9
1. Federal National Mortgage Association IV-9
2. Federal Savings and loan Insurance Corp IV-10
V. A KHVJLkX OF CASE HISTORIES V-l
X. ****** COMPANY, IMC V-2
1. Background v-2
2. Areas of Environmental Concern V-3
3. The Sampling Plan V-4
4. Inferences V-6
B. **** COMPANY, DC V-7
1. Background v-7
2. The Sampling Plan V-8
3. Cospany Actions V-8
4. Inferences V-9
C. ***, DC V-10
1. Background V-10
2. The Sanpling Plan and Owner's Actions V-ll
3. Inferences V-12
D. ****** NAIXCMAL BANK V-13
1. Background V-13
2. Location V-13
3. Remediation V-15
B. OGNFTDDfTIAL VESBCfEUK COGSQRKCIGN, CKiEfUHKA ..... V-17
1. Background V-17
2. Areas of Environmental Concern V-18
3. The Sanpling Plan V-18
4. Inferences V-20
F. (RBKL EBDQE) ZMVttMMBIT OGKEMnf, CMJIOmni ....... V-2Q.
1. Background V-20
2. Environmental Concerns V-21
3. Aqrwrimont V-21
4. Characterization and Remediation V-22
5. Inferences V-23
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VI. gCMMMK AND CCN2LOBICNB VI-1
APPENDIX 1: REAL ESTATE TOXIC LIABILITY BTBLXOCSOEHY
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This is achieved by sampling and analyzing various madia — surface
water, groundwater, soil, and structures. Exact locations for sairples,
the types of analyses conducted, and the types of chemicals tested for
are site-specific decisions that vary fron one investigation to another.
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SCMMARY
Landowners who purchase, rent, or lease property, or who otherwise
have "care, custody, and control" of a property (such as in a trust or
foreclosure) can incur potentially significant liabilities for the
remediation of contaminated sites. In order to address potential
inequities in application of such liability, congress established the
"innocent landowner defense" under the Superfund Amendments and
Reauthorization Act of 1986 (SARA), which limits the liability of a
landowner who made "all appropriate inquiry" into the environmental
condition of the property before purchasing it. Tto date however,
neither the EPA nor the courts (via case law) have established
guidelines that define the requirements of "all appropriate inquiry".
Prospective landowners, particularly those with limited resources,
are often uncertain of "the steps they need to take to ensure conpliance
with the letter and the intent of the law, and to prevent possible
liability. Without some guidance, however, they are likely to conduct
inadequate environmental investigations of property they are considering
purchasing, because the investigations are based on a limited and
sometimes incorrect understanding of the requirements. Not only does
this subject those landowners to future liability (if contamination is
later found where none was declared), but it also hinders government
efforts to identify and clean up hazardous waste sites as early as
possible. Prospective landowners who take adequate steps to conply with
the intent of SARA will reduce their liability while helping to further
EPA's efforts in identifying and cleaning up hazardous waste sites.
The primary objective of this report is to present the EPA with
information on how institutions and individuals involved in property
transfers minims* their liability under SARA. This information will
enhance the Agency's decision-making process, and will enable the Agency
to assist and guide the regulated public. In addition the report will
indicate to Federal agencies a range of practices to enploy to attenpt
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to minimize liability during purchase or sale of property; and will
provide an insight to other prospective landowners into approaches
currently in use to minimize liability during property transfers.
This study involves a review of the policies and practices of
various agencies and organizations and their efforts to diligently
evaluate their properties for hazardous substance contamination. The
study focuses on federal agency practices; state laws and reocnnended
procedures for environmental investigations; and public and private
institution policies or procedures for assessing the environmental
condition of property*
Most environmental investigations are typically conducted in two
phases. The first phase involves obtaining background information on
the site to ascertain the possibility that it is, or may be,
contaminated with hazardous substances. This phase usually includes:
• a property history that details past and present
owners and uses of the property; all known waste
practices at the property; all contaminant
releases, violations, and environmental permits; a
description of types and quantities of hazardous
substances; and details of their containment;
• a visual inspection of the property to observe for
signs of contamination, including discolored or
disturbed soil areas; areas of sparse, sick, or dead
vegetation; damaged drums or storage tanks;
discolored or polluted water; «<«""yd electrical
equipment such as transformers and capacitors;
unusual odors; and waste disposal areas; and
• a search of agency data base files and incident
files.
If the results of the first phase investigation suggest that the
site may be contaminated by hazardous substances then the second phase
is iv M-i""!"1"* This typically involves investigating physical site
characteristics and defining the source and extent of contamination.
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CHAHlttK I
mncoocncti
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X. BACKGROUND
Recently enacted previsions of the Superfund Amendments and
Reauthorization Act of 1986 (SARA) have dramatically changed certain
portions of the previous federal "Superfund" legislation under the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980 (CEBdA) in the area of real property transactions. Prudence now
suggests that most real estate transactions (especially commercial and
industrial) must be assessed for environmental impairment prior to
consummation of the sale, in order to evaluate the financial risk of the
transfer in light of potential environmental liabilities resulting from
an actual or threatened release of a hazardous substance.
When hazardous substance releases have oomirred, the legal standards
of strict and joint and several liability have been consistently applied
in several significant court rulings. When two or more parties are
liable under CERdA, the defendant who seeks to limit liability by means
of apportionment bears the burden of proving that division.
Additionally, those found liable for the release may be charged with 1)
all costs of removal or remedial action incurred by state or federal
agencies; 2) any other necessary costs incurred by other persons; 3)
damages for injury, destruction or loss of natural resources; 4} costs
of conducting health assessments or effects studies; and 5) costs for
governmental enforcement actions (42 USC 9607). These developments have
exposed lenders and other transactional parties to substantial
liabilities for the cleanup of h*7*nv*'g materials from real property.
Furthermore, lenders can lose more than the value of their security, as
they can become liable for the acts and omissions of their borrowers or
even prior owners or operators of the mortgaged property.
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However, SARA reoognized the fact that a landowner who had no
connection with the release of hazardous substances at a property would
still be liable for such actions. To remedy this problem SARA provided
an inportant third party defense, known as "the innocent landowner
defense", which is contingent upon certain measures being taken at the
time the property is acquired (42 U.S.C. 9607 (b) (3) (a) and (b)).
B. BEQOIMMQirS UNDER SARA
SARA, like CQKZA, iFTr"eo'e liabilities upon the "owner/operator" of
property at which hazarfl""« waste contamination has been discovered,
regardless of fault. However, a provision called the "innocent
landowner defense" relieves the defendant of liability under some
circumstances:
• at the time the defendant acquired the property he
or she did not know, and had no reason to know, that
hazardous substances had been dispireri of at the
facility;
• the defendant is a government entity that acquired
the facility through involuntary transfer or
acquisition, or through the exercise of eminent
authority by purchase or condemnation; or
• the defendant acquired the property by inheritance
or bequest.
This defense is precluded if the defendant knew of contamination at the
site when he or she owned the property and subsequently transferred
ownership to another person without disclosing such knowledge. In this
case, of course, the defendant is really the seller (and after the sale
is no longer the property owner), and the innocent landowner defense in
its strictest sense should not apply. It i* interesting to note that
this defense does not appear to cover off-site contingent liabilities
that nay cone with the property.
To establish that the defendant had no reason to know of the
contamination, SARA states that "the defendant must have undertaken at
the tine of acquisition, all appropriate inquiry into the previous
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ownership and uses of the property consistent with good commercial or
customary practice in an effort to minimize liability". SARA further
states that in construing the "all appropriate inquiry" provision the
courts will take into account:
• any specialized knowledge or experience on the part
of the defendant;
• the relationship of the purchase price to the value
of the property if contaminated;
• commonly known or reasonably ascertainable
information about the property;
• the obviousness of the presence or likely presence
of contamination at the property; and
• the ability to detect such contamination by
appropriate inspection.
A number of ill-defined and unresolved questions surface in
connection with property transfer transactions. Wiat are the minimum
efforts required to conduct "all appropriate inquiry"? The term "due
diligence" as historically used in financial circles, and more recently
applied to real estate environmental activities, refers to obligations
laid upon buyers, sellers, and lenders involved in environmental
investigations during property transfers. A diligent review of
information and issues directly relating to the environmental integrity
(with respect to hazardous waste contairination) of the subject property
is required. However, nc guidance is provided as to the type of inquiry
or investigation necessary to absolve buyers of
Two key phrases in SARA provide clues to what may constitute
"appropriate inquiry": "previous ownership" and "uses of the
property'. "Previous ownership" certainly refers to past property
title-holders. It may include previous lessees or site operators as
well. It is important to note that no specified tine period is stated
or inferred, necessitating a conservative assumption that a chain-of-
title search (since recorded origin or at least 30-40 years) should be
conducted in lieu of a more customary three-year title search. (An
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inherent limitation of such title Marches is that they do not nornally
indicate lessees or site operators.) "Uses of the property" denotes a
thorough historical background and document search into prior site or
land utilizations and site operational characterizations. Again, no
specified tine period is discussed, necessitating a conservatively
thorough approach to acquiring the relevant information.
Uiis import examines the current practices of three Federal
Agencies; relevant State laws and regulations; and the neasures being
implemented by corporations and institutions, both private and public,
to minimize liabilities under SAR&. m addition, case studies are
included as examples of a range of current practices for conducting
envircrnental investigations during real estate transactions.
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CMAWKk II
FEDERAL AGDCir PRACTICES
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A. mnooocxxQM
Federal agencies axe liable for cleanup of hazardous substance
contamination under SARA in the sane way a* private parties, such as
individuals, corporations, and institutions. However, in an effort to
Bijiiariam the risk of agencies unknowingly selling or transferring
contaminated properties, SARA includes provisions specifically
addressing Federal agencies. Section 120 (h) (1) of SARA requires
agencies entering into contracts for the sale or transfer of U.S.
property on which hazardous wastes were stored for a year or more, to
conduct a thorough search of agency files; and to provide details of the
hazardous waste storage in the contracts involving the property under
consideration. Section 120 (h) (3) (B) requires the agency to provide
covenants that all nacessary remedial action has been conducted, and
that any additional remedial action found to be necessary after the
transfer will be conducted by the agency. No such contractual
requirements exist for private party sellers under SARA, although other
laws (particularly state laws) nay require the seller to make sane sort
of declaration to the buyer during a transact ion of property on which
hazardous substances have been stored.
The provisions of Section 120(h) apply to agencies as sellers, and
as such do not have a direct bearing on the issue of buyers' liabilities
and the "innocent landowner defense11. Dowever, the provisions were
studied in light of the overall liability question, and the steps that
agencies are taking to minimize linMHtles under SARA. One important
requirement of Section 120(h) is the thorough search of agency files.
EPA's January 13, 1988 Notice of Proposed Rulemaldng states that the
search "...shall consist of a thorough review...of files...that relate
to the yumcnt or past use(«) of the real property that is being sold or
transferred...with ptttir^jlw emphasis upon... environmental oomplii
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obligations of the owner of the realty." Such a review can help uncover
the existence, if any, of problems created by storing hazardous
substances at the site.
Several agencies have policies addressing the issue of liability,
and are taking measures to avoid liabilities under SARA. Sane agencies
are making their own provisions (through contractual means, etc) to
transfer part or all of any liability to the seller if the seller is
wholly or partially responsible for the contamination. Furthermore, to
minimize liabilities from private lawsuits, agencies such as the
Department of Defense have instituted procedures to investigate property.
being bought or sold for possible hazardous substance contamination.
Briefly described here are some of those Federal agency programs.
B. THE DEPWOJENT OF DEFENSE
The U.S. Army Toxic & Hazard"« Materials Agency (USATHMA) has
developed a document entitled "Environmental Baseline Survey For Leased
land And Facilities" (March 1988). The purpose of the document is to
assist investigators in defining the condition of soils, groundwater,
surface water, sediments, and structures in, and immediately adjacent
to, the property of concern. A baseline is developed by obtaining a
site description, sampling at strategic locations, conducting chemical
analyses to determine precise compositions of the samples, and preparing
a summary report.
The information collected as part of a site description includes
site topography, types of facilities and manufacturing processes if any,
actual and planned chemical Inventory, environmental control facilities
and their status, existing flora and fauna, and potential areas of
concern. Sampling is suggested in four madia — soil, surface water and
sediments, groundwater, and facilities. Facilities to be sampled
include structures, equipment, and sumps and sewers. Chemical analysis
involves defining analytical parameters and establishing detection
limits based on criteria and standards for contamination. The report
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nts field and laboratory methods and quality assurance; subsurface
soil conditions; surface water and sediment quality; groundwater flow
and quality; facility conditions; and conclusions and recommendations
(including a monitoring plan as required).
One purpose of the baseline survey is to determine the environmental
condition of the property before leasing from or to other parties. In
the "»f"» of property leased from other parties the survey establishes
the condition in which the property must be maintained during the lease,
or at least the final condition in which the property must be at the
of terminating the lease (i.e., if the Army contaminates the
rty, any remedial actions must leave the property in at least the
condition as it was in, prior to leasing it). In the case of
ty leased to other parties, the survey determines the condition in
which the leasing party nust return the property to the Army.
In either of the above cases the survey is intended to establish
whether or not the property is contaminated by hazardous wastes. As
such it helps us define how the Amy is trying to prevent liability, and
contributes to the overall definition of "all appropriate inquiry11. The
survey does not seem to directly address SARA'S requirements, and it
does not even necessarily involve property transfers. However, as far
as it helps us learn of the steps being taken by the regulated public to
prevent liabilities (and thereby clarifying the appropriate inquiry
question) the survey is useful to this study.
The Office of the Assistant Secretary of the Army for Installations
and logistics is currently developing baseline environmental studies for
use during real estate transactions. The studies are being developed in
cooperation with USABWA, and are expected to be parallel in scope to
the survey.
Officials in the Dept. of the Air Force indicated that there may not
be any written policy addressing the issue of liabilities. Apparently,
during property acquisitions, the Air Force enquires into a history of
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the lard use and performs a review of permits, but no physical
evaluations (for the specific purpose of uncovering contamination) are
conducted. On the other hand, the Air Force does a much more rigorous
site evaluation while selling property.
C. THE EEEMQMDir OP MSRXCQUTURE
The Ftorest Service publishes a "land Acquisition Handbook" (FSH
5409.13, April 1987) that requires acquisitions staff to "identify the
potential liability to the Forest Service for Hazardous Waste Disposal
tinder CTK3A". If there is an indication of hazardous substance
contamination on the property the following steps are to be taken:
• check with EPA, and state and local agencies
responsible for water pollution control, solid waste
, and mined land reclamation to determine if
,
there are any permits or proceedings involving the
property;
• have tests conducted by Forest Service hydrologists,
other specialists, or contract personnel to
determine if there are any releases of hazardous
substances on or from the land;
• consider including an exception to the exchange or
option agreement that would allow the U.S. to reject
the land if hazardous substances are found prior to
closing; and
• consider including a provision in the agreement and
any deed to the U.S. that would warrant there are no
hazardous substances on the land, and that the
proponent or donor will indemnify the U.S. against
any expenses, claims, proceedings, or judgements
arising out of the contamination issue.
The last two points above do not relieve the Forest Service of immediate
liabilities under SARA. They siaply ensure that the Forest Service will
be reimbursed for the expenses of the clean up, or that it can require
the "proponent or donor" to pay for the clean up in the first place.
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In addition to the previsions of the Land Acquisition Handbook,
the Forest Service is developing a policy for sanitary landfills that
peripherally aHHrpseaa property transfers, the Forest Service does not
typically acquire property that nay nave been a hayardnus waste site.
Therefore no detailed site assessments are usually necessary, and a
sinple review of permits is sufficient. However, two potential problems
with this approach are: i) wastes that are illegally dumped at a site,
such as a landfill; and ii) domestic wastes (garbage, etc) containing
only trace quantities of hfi7rarrV«yi substances that are dumped in a
landfill, but the concentrations of hazardous substances steadily
increase over tine. To prevent liabilities under such circumstances the
Forest Service is gradually phasing out its acquisition and management
of landfills.
D. 1** DEPARDiQfr OF *"»* INTERIOR
Mast of the Department of the Interior's (DOI) property transactions
are exchanges rather than outright purchases. However, the provisions
of SARA still apply, and officials in the agency are concerned about
liabilities. DOI's Bureau of Land Management is currently developing a
policy that addresses the liability issue. In the interim the Bureau is
either not acquiring any property, or if it is, the seller is being
required to conduct site investigations and to certify the absence of
hazardous substances. In most types of transfers DOI requires the other
party to prove the absence of any contamination. However, if Congress
mandates the transfer then the requirement cannot be enforced, and DOI
could beoctpp liable if contamination is found after the transfer is
complete.
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CHAPTER HI
STATE USB AND KEGOIATICNS
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HI. BOOK MSB MPRBSDIMTOM
Several states have laws and regulations dealing with hazardous
. substance contamination, and the issue of liability with respect to
property transfers. Some states also have what are known as
"superliens". Superliens give the state the authority to place a
priority lien on a pimjexty that is found to be significantly
contaminated, in those circumstances where the state is forced to expend
its own monies to remediate the property. Such liens typically take
priority over all other encumbrances, including first mortgages
(although tax liens are cometimes ^vntudart). This is motivating private
institutions, such as banks and other lenders of commercial mortgages,
to require borrowers to conduct thorough assessments of the property
before any financial ccranitaents are made. In some states, (for example
Massachusetts) these institutions form such a powerful interest group
that the states have not felt the need to impose explicit environmental
requirements during property transfers.
This chapter focuses on state laws, regulations, and requirements of
selected state environmental agencies in. their efforts to identify
contaminated sites, have them cleaned up, and make responsible parties
pay for the cleanup. The cases of New Jersey, Massachusetts,
California, Connecticut, and Illinois are briefly rtismssfrl here.
B. NEV JERSEY
New Jersey has enacted a law entitled tr« "Environmental Cleanup and
Responsibility Act" (ECRA) that imposes preconditions on the sale,
transfer, or closure of "industrial establishments" involved in the
generation, manufacture, refining, transportation, treatment, storage,
handling, or rtlsnnml of hazardous substances. The preconditions are:
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• the execution of an approved cleanup plan detailing
the measures necessary to detoxify and restore
contaminated property;
• approval by the New Jersey CEP (Department of
Qivironmental Protection) of a negative declaration
that there have been no discharges of hazardous
substances on the property, or that any such
discharges were cleaned up to the satisfaction of
CEP; or
• the execution of an Administrative Consent Order
(AGO) between the owner/operator and DEP, allowing
the sale to be consummated prior to full ECRA
ccnpliance. The ADD does not relieve the seller of
full legal, financial, and other responsibilities to
comply with the requirements of the law.
Only an outline of the process and highlights of the salient features of
this innovative program are rilsnissed here.
ECRA jppogag the burden of compliance on sellers, rather than on
buyers, and is therefore slightly different fron SARA. However, the
principles of assessing contamination from hazardous substances are the
same, and therefore ECRA provides valuable insights into the issue of
appropriate inquiry. Furthermore, ECRA directly arUrpsqps the issue of
contamination assessment ^.Tri^g property transfers, and as such is
directly relevant to the appropriate inquiry question, which applies at
the time of property purchases.
Under ECRA all industries that fall within certain SIC categories
are required to comply with the requirements of the law. The DEP issues
Letters of Wen-Applicability (IflA) to those applicants who request it
and who are not under ECRA's purview. These applicants may then proceed
with their transactions without following the steps required of
applicants subject to BCRA. IKAs are not a statutory requirement;
rather they axe a service provided by the CEP in response to requests
fran mortgage bankers, attorneys, and purchasers %to axe concerned with
possible BCRA violations, and who often require sellers of properties or
businesses to demonstrate that pending transactions may proceed without
ECRA's intervention.
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An applicant who is subject to ECRA nust submit to the CEP an
initial notice of intention to sell property. The CEP assigns the case
as one of low Environmental Concern (IEC) or one of High Environmental
Concern (HBC). The applicant is then required to provide the CEP with a
negative declaration that the property is free of contamination. In the
case of HECs the applicant nust also perform environmental aegnm^mmn g
at the site before subnitting a negative declaration. The CEP provides
guidance to conduct such environraental assessments in their "Sanpling
Plan Guide". The initial sanpling plan includes an evaluation of
potential contaminants, and migration paths from uncontained releases.
then significant levels of contamination are found during the initial
evaluation, a second sanpling plan nust be prepared to evaluate (through
further sampling) the horizontal and vertical extent of contamination.
Sanpling plans nust be approved by the CEP before sanpling begins.
The Sampling Plan Guide document provides details of the aspects of
the property that must be investigated, including the site history,
soils, topography/drainage, hydrogeology, and geology. It suggests
nedia to be sampled, sanpling frequencies and locations, and sanpling
depths, and provides decision criteria for various choices. It
describes the sanpling methods appropriate when underground storage
tanks (and other storage containers), drums, suops, pits, etc. are
present on the property. It also disnreses methods to use when
equipment and structures are present, such as transformers (which may
contain PCBs), and friable insulation (which nay contain asbestos).
The KJEEP nay take up to one year to review and approve a sanpling
plan, for this reason KJCEP allows applicants to execute a sanpling
plan prior to KJEEP's approval. However, the sanpling nust be conducted
on an "at risk" or "at peril" basis, for which the following conditions
apply:
e the sanpling plan represents the minimus anoint of
work required on the site. The State nay request
additional sanpling once they have reviewed the
sanpling plan and the analytical results;
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the type of sampling proposed at the site most be
with the KJEEP rag* manager or an ECRA
representative; and
• the KJEEP most be given the analytical results upon
receipt.
If the HEC site is clean the applicant files a negative declaration,
and nay proceed with the transaction. (This is the same point that the
applicant at an IEC site reaches after a preliminary site assessment.)
If the site is not clean then the HBC applicant oust submit a cleanup
plan, which after DEP approval, nay be implemented. Once the site has
been cleaned up to the standards in the cleanup plan, and the CEP has
certified compliance, the applicant nay proceed with the transaction.
Applicants may be required to monitor the cleanup sites even after the
sale of the property. (There is an alternative available, whereby the
transaction is allowed to proceed before cleanup. This requires the
seller to enter into a consent decree, and post an appropriate financial
assurance guarantee.
"Certification" by the DEP does not relieve owners/operators of the
property of liabilities for cleanup of contamination found after the
transfer, even if the contamination occurred before the transfer and was
not detected during sampling. In other words, compliance with ECRA does
not relieve the owner/operator of any cleanup responsibilities. BCRA
merely reduces the chances of contamination going undetected and being
passed on to prospective buyers.
In 1988, the Massachusetts legislature proposed to amend the
Massachusetts "Superlien" law (the Massachusetts Oil and Hazardous
Material Release Prevention and Response Act — Chapter 21 (E) of the
Annotated Laws of Massachusetts). That law makes owners of property
contaminated by oil or haCTTtk^tfr materials liable for the State's costs
for cleaning up the property, upto the value of the property after
cleanup. Owners are liable «v» if tb«y can prove their property was
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by Bnmmne else. Die only recourse for owners is to pursue
in court other parties who share the liability jointly and severally.
The amendments to Chapter 21 (E) were proposed in the "Act Providing
for Certain Protections for Innocent landowners Relative to Hazardous
Waste". Although it has yet to be passed into law many of the Act's
provisions are relevant to this study, and are djgr»e.cart here. The Act
explicitly defines "reasonable inquiry". Presented here is the verbatim
definition: "a reasonable inquiry shall mean, with respect to all
properties, visually inspecting the site for unusual appearances of
vegetation, surface soil or water, as well as for obvious signs of
hazardous material di'qTnsal, and inquiring of the department (the
Department of Environmental Quality Engineering — DEQE) and the
waste coordinator (if any), Fire Department, Board of Health
and Building Department of the city or town in which the site is located
to ascertain whether their respective records indicate that oil or
F^y-wJlTig material had been present at or released at the site".
In the event that the visual inspection or inquiries indicate the
use of oil or haainkms material for industrial, connercial, or landfill
purposes where oil or hazardous material was likely to have been
released, the Act further defines reasonable inquiry: "... a reasonable
inquiry shall also include the following further assessments to be
performed by or under the supervision of a registered professional
engineer, hydrogeologist, or other qualified scientist with experience
in such matters: (i) Subsurface eogdoration and sampling in number and
location adequate in (their) professional opinion to reasonably screen
for the yuBsenaB of oil or hazardous material in soil and groundwater on
the site in the area from the land surface to and including the water
table of the typ»m"rt aquifer or drilling refusal, whichever shall be
intend first and (ii) qualitative screening analysis for volatile
organic comjumids and such other hazardous •Bterials as in (their)
professional opinion are likely to have been released at the site. Ihe
results of such further anumnHMit shall be compiled in a report
prepared by (the professional) who shall include therein copies of
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boring logs ani other data developed during the course of performing the
assessment". (Parenthesis in the preceding text have been added by the
authors of this report to facilitate readability.)
The Massachusetts CBQE prepared a Guidance Policy (Revised Policy-7,
June 22, 1987) for DBQE staff to identify imminent hazards as quickly as
possible and to use short-term measures to eliminate, reduce, or avoid
them. The contents of the Policy were formalized in Subpart E of the
Massachusetts Contingency Plan of October 1988. Relevant steps in the
process are a Preliminary Assessment, a Phase I Site Investigation, and
a Phase II Full Evaluation.
A preliminary Assessment is a study used to make an initial
determination of the environmental condition of a site suspected of
being contaminated, and to determine the course of future action. It is
performed when DBQE is notified of a release or threat of release of oil
or hazardous materials, and includes: obtaining specific physical and
historical details about the location; reviewing local, state, and
federal documentation such as permits, past environmental violations,
and complaints about the types of materials used at the location;
consulting with ccnnunity officials and residents; visually inspecting
the site; and identifying potential human and environmental receptors.
If there is a possibility of contamination, but the results of the
Preliminary Assessment are unclear, a Phase I Site Investigation is
conducted. Such an investigation serves to confirm the presence or
absence of contamination. Although it is not intended to provide a
rehersive assessment of a site's environmental condition it involves
collecting important information, including:
• a property history that details past and present
owners and uses of the location; description of
types and quantities of hazardous substances and
details cf their containment; the history of all
waste digrxyvQ practices at the property; a history
of all release incidents, violations, and
environmental permits; and a brief description of
past and present land use on adjacent properties;
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a location description that outlines the
topographic, geologic, hydrologic, and hydrogeologic
conditions at and surzounding the site; location and
information on structures and conduits associated
with the presence of ha ??"*•"« materials; evidence
of environmental contamination; and the presence of
subsurface Hiepneai systems; and
e locating and characterizing the sources and
quantities of contamination through sampling and
screening. The type of field testing required is
determined by conditions at the location, and other
criteria ptirH ****** elsewhere in the Policy; in sane
situations, steps in the Phase H study may be
needed. Typically, however, the Phase I study
includes at least field sampling and laboratory
analysis of various media, and geophysical
investigations.
If the Phase I study confirms the presence of contamination a Phase
n — Full Evaluation 'MifMi""p. This is a more thorough investigation
of the site, and its scope is determined by the results of the Phase I
study. A sampling plan is required, which includes a comprehensive
hydrogeologic investigation, as well as sampling in other media.
However, if any medium is omitted from the sampling plan the reasons for
omission must be justified. Further, as specific information becomes
available at the site ffd^lti"^^ Phase H study nay become necessary.
Phase n studies typically include investigating physical site
characteristics, and defining the source and extent of contamination.
Physical site characteristics include topography, surface drainage
characteristics, and vegetation characteristics; surface water locations
and flooding potential; types of overburden material and thicknesses;
soil classification and permeability; types of bedrock and depths to
bedrock; grcunowater elevations, flow direction and rates, and
piezcmetric surfaces and gradients; and predominant wind direction.
Defining the source and extent of contamination involves determining
the exact location, source, concentration, volume, and type of container
(if any); existing or potential migration pathways, including all
potential soil, groundwater, surface water, air, vapor, and food chain
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pathways; any plumes of oil or *»*»rrinvi materials in groundwater; and
the spatial area and concentrations in all other media.
Although Massachusetts' Guidance Policy is written for DBQE staff
rather than the general public, although it is not written specifically
for property transfer situations, and although its scope is far wider
than that of this study, the Policy is useful to this study. One of the
objectives of the Policy is to determine the presence of contamination,
and its nature and extent. The objective of "appropriate inquiry" is
essentially the sane. Therefore, whoever the Policy is written for,
whether it be DEQE staff or others, and whether it is written for
property transfers or not, such a document provides insights into the
measures necessary to conduct a comprehensive environmental assessment.
In 1987 the Massachusetts Association of Realtors, with the support
of a coalition of industry groups, submitted House Bill 606. The Bill
proposed several amendments to Chapter 21 (E). Although the Bill was not
enacted, several provisions are relevant to this study:
• continued liability for owners who contaminate their
own land. This liability includes the cost of
cleaning up contamination belonging to the owner; or
contamination that was brought onto the land under a
contractual agreement with the owner or with the
owner's permission;
• continued liability for owners of property (other
than one-to-four family homes, condominiums, or
cooperatives) who knew or had reason to knew their
property was contaminated when they bought it;
• an automatic "safe harbor" exemption from liability
under Chapter 21 (E) for one-to-four family hones,
condominiums, and cooperatives;
• creation of means for existing and prospective
property owners to achieve "safe harbor" exemption
from future liability toy establishing through a
reasonable inquiry that they did not know or hire
reason to Vrr** « on
their property at to* tin* of inquiry. Innocent
owners who failed to go through the process of
reasonable inquiry and whose property was found to
be contaminated would continue to be liable; and
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protection of lenders who became owners or operators
of property through foreclosures, taking possession,
or other measures to protect their security
interests. Lenders are relieved of liability only
if they did not know, and had no reason to know, of
contamination on the property as of the date they
became owners or operators. Furthermore, this
protection would not apply if lenders participate in
the management of a site in a manner that
contributes to the release of contaminants.
D*
California has not, to date, passed legislation that specifically
requires a property assessment, although such legislation has been
proposed and defeated in the past. Because California's environmental
policies are often viewed as precedent examples for state-level
regulations, a discussion regarding what has and has not been instituted
in California is appropriate.
In 1986, both a state senate bill and an assembly bill that were
introduced in an attempt to ease the complexity of the liability
language in O5HCLA and SARA did not achieve final passage. Senate Bil3
2375 (Torres) contained language similar to the innocent landowner
provisions of the SARA statute, while Assembly Bill 870 (Sher) would
have authorized State authorities to place liens on property subject to
Superfund cleanups. Although neither bill achieved final passage before
adjournment, AB 870 would have bean a relatively moderate approach to
the lien question as compared to the laws that have been passed in other
states (e.g., Arkansas, Massachusetts, and Hew Jersey).
Although no specific regulations have been ImjiriMri in California
requiring environmental minemtment* for real property transactions, or
legislation concerning 1) notification of hazardous substance releases
prior to the sale of property, 2) consolidation of various lists of
contaminated sites in the state, and 3) registration of environmental
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1. Senate Bill 245 and Assembly Bin 924
Effective September, 1987, any owner of a nonresidential real
property interest in California who knows or has reason to believe that
a hazardous substance is located on or beneath the property, is required
to notify, in writing, each buyer °* the property of the condition,
prior to the sale of the property. The new law (SB 245 and its amending
bill AB 924) changed the California Superfund lam as outlined in Section
25359.7 of the California Health and Safety Code, and imposed new
disclosure obligations on sellers of nonresidential real property and on
lessees of both residential and nonresidential real property. Failure
to give the notice can subject the seller to liability for damages and,
if an owner has actual knowledge of the presence of a hazardous
substance and knowingly and willfully fails to give notice, then a civil
penalty of up to $5,000 nay be levied by the state for each violation,
in addition to any other legal remedies each buyer may have. As part of
the California Superfund law, it is administered by the Departanent of
Health Services (EHS).
The EHS still needs to provide guidance to clarify the law.
However, until such clarification is provided, there is a reporting
obligation during transactions involving a transfer, contract to
transfer, or title to nonresidential real property. When transferring
real property, a disclosure is required when the presence of hazardous
substances on the property is suspected. This requirenent thus
indirectly imposes the burden of investigation on the owner, if
contamination is suspected. lastly, the lessees of real property have
an ongoing responsibility to at least minimally investigate the presence
of hazanfrms substances on the property as the result of a release,
which must then be immediately •M*^™*** to the owner of the property.
Each of these requirements provides incentives to both, real property
owners and lessees, to conduct environmental property assessments.
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2. Oortase List of Hazardous Waste and Substances Sites
AB 3750 (Oortese), enacted in 1986, requires the compilation of
several lists of information concerning various hazardous waste and
substance sites. Applicants for a development project must consult the
list and submit a signed statement indicating if the project is located
on a listed site, furthermore, the Office of Planning and Research oust
consolidate and distribute the list, ooooonly known as the Oortese list,
which is actually compiled by three separate agencies and updated
annually. Die portion of the list compiled by the State Department of
Health Services contains all hazardous waste facilities subject to
rective action, all land designated as hazardous waste property or
border zone property, all hazardous waste disposal on public land, all
sites in the Abandoned Site Asspsanpnt Program, and a list of all public
drinking water wells with detectable levels of organic contaminants.
Next, the State Hater Resources control Board nust compile a
list to include all underground storage tanks for which an unauthorized
release report is filed, all solid waste disposal facilities fron which
there is a migration of hazardous waste, all canse and desist orders,
and all cleanup and abatement orders issued related to the discharge of
wastes that are hazardous materials. lastly, the California Waste
Management Board must compile a list of all solid waste disposal
facilities from which there is known migration of hazardous waste.
3. Registration of Environmental Assessors
The California Bivironmantal Affairs Agency has adapted
regulations providing for the voluntary registration of environmental
ftnprmp-m', Although the focus of *h*g legislation is to promote the
EE&'s policy statement endorsing environmental auditing (which is
intended to assure the safe handling of toxics), to aid industry in
complying with environmental laws and regulations, and inspire public
confidence in hazardous materials management, the registration has the
potential to become a valuable luimuioe in standardizing environmental
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assessor qualifications. These environmental assessors are expected to
be able to provide a qualitative, or where feasible, a quantitative,
review of the risk resulting from occupational, public, or environmental
exposure to hazardous substances. Assessors make reccnraendations for
minimizing the risks, including any potential liability associated with
regulated and unregulated t"««»Tri""e substances. As such, this sane
group of assessors will typically be qualified to conduct due diligence
assessments during property transfers, providing the individual can also
identify potential liability nsnori«1-«1 with properly ownership. It
should be noted however, that the law was not intended to provide a list
of assessors qualified to conduct real estate property assessments.
Currently, the registration is voluntary for candidates meeting the
mim'Titim criteria established for assessors by the Environmental Affairs
Agency, but a standardized test nay be administered in the future.
E. CCNNECnCOT
Connecticut's Industrial Transfer Law (amended in 1987) deals with
the issue of cleaning up sites contaminated by hazardous wastes. It
requires anyone transferring ownership in certain businesses handling
hazardous wastes to give a written statement to the purchaser and the
Connecticut Department of Environmental Protection (CEP). The statement
must certify that any wastes on the site are being properly managed.
Alternatively, the person nay certify to the CEP that the waste will be
cleaned up in accordance with a EEP-approved schedule.
The law states that prior to transferring an "establishment", the
transferor must submit to the transferee a "negative declaration"
(similar in principle to New Jersey's ECRA) regarding on-site hazardous
waste releases and current hazardous waste management practices. A copy
of this declaration and accompanying attachments must be submitted to
the CEP within 15 days after the transfer.
An "establishment11 is defined as a business or other concern that
generates more than 100 kilograms of haTur*"**? waste per month, or which
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recycles, reclaims, reuses, stores, handles, treats, transports, or
disposes of hazardous wastes generated by another concern, including
individuals, businesses, and aunicipalities. Additionally, the
requirements apply to all dry cleaners, auto body repair shops, painting
shops, and furniture stripping facilities operating after May 1967.
A "transfer" is defined as a transaction or proceeding involving a
change of ownership. This includes sale of stock in the form of a
statutory merger or consolidation, sale of the controlling share of the
assets, the conveyance of real property, change of corporate identity or
financial reorganization. It does not include corporate reorganization
that does not substantially affect the ownership of the establishment.
"Negative declarations" are written declarations that state either:
e no spill, discharge, uncontrolled loss,
infiltration of hazanVnis substances has mxuiTed on
the property; or
• if a spill or other contamination has occurred it
has either been cleaned up in accordance with
procedures approved by the CEP; or the EEP has
determined that it poses no threat to human health
or safety, or the environment that would warrant
containment, removal, or other mitigation measures.
to addition the declaration sust state that any hazardous wastes that
renain on site are being managed in accordance with the appropriate laws
and regulations.
If a "negative declaration" cannot be made because unnanaged
* wastes are present on the property, the transferor must
complete a form that declares the reasons for not submitting a negative
declaration (usually because contamination has not been satisfactorily
cleaned up). In addition, the transferee or another party to the
transfer must certify to the DEP that the property will be cleaned up to
the extant necessary to IP^™"» or mitigate any threat to human health
or the environment; and that cleanup activities will be conducted in
rdance with HP-approved procedures and tine schedules. This form
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must be submitted to the DEP prior to the transfer.
The 1987 amendments to the Act eliminated the state's authority to
place a priority lien (superlien) against real estate cleaned of
material using state funds when it has been transferred in
accordance with the state's industrial transfer lav. Thus, in such
cases the state's lien would no longer have priority over previously
recorded deeds, mortgages, and other transfers. The amendments also
exempt gasoline service stations from the state's statutory lien for
hazardous materials cleanup expenditures if the stations comply with DEP
requirements concerning design, instruction, installation, and
maintenance of underground storage tanks; and they comply with the other
negative declaration requirements. Furthermore, the Act makes it clear
that the state's lien is on the real estate on which the spill occurred
or from which it emanated, rather than against any real estate of the
person causing the spill.
The Hazardous Haste Division of Connecticut's Department of
Environmental Protection enforces the provisions of the law. However,
the State publishes no criteria for determining when a site assessment
is required, nor does the State provide guidance for conducting them.
On the other hand, private groups such as banks and other lenders, title
insurers, and real estate developers, motivated by the State's superlien
policy, have been at the forefront of requiring site assessments.
Parties to real estate transactions (particularly borrowers) are
required to conduct site assessments to ensure the properties are free
of hazardous waste contamination. This aspect is disarewd in detail in
a later cf-spter.
F. HU2DIS
Illinois recently promulgated The Illinois Responsible Property
Transfer Act of 1988", which requires that, for all transfers of real
property covered by the Act, the transferor mist provide to the
transferee and lender an environmental Disclosure Document. (The Act
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takes effect in Noventoer 1990.) Also, the Disclosure Document must
berecorded with the county recorder and a copy oust be filed with the
Illinois Environmental Protection Agency.
teal property, for the purposes of the Act, is defined as property
in Illinois that:
• contains a facility that either manufactures,
ixports, or uses hazardous chemicals, and has such
chemicals on-site in an amount above a statutory
threshold limit. (These conditions subject the
facility to reporting under Section 312 of the
Federal Bnergency Planning and Ocnunity Right-to-
Know Act of 1986) ; or
• contains an underground storage tank that requires
registration with the State Fire Marshall.
The Disclosure Document is a pre-printed questionnaire that requires the
transferor to answer, to the best of his knowledge, several "yes or no"
type of questions. These questions deal with the handling of hazardous
or spo^iM wastes or substances on the puberty; the existence of
governmental permits; previous enforcement actions; and whether or not
any reportable releases of oil or hazardous substances have occurred on
the property; and whether or not the release has cone into direct
contact with the ground at this site. If the response to the last
question is "yes", several other questions oust be answered regarding
response and cleanup actions. Additional questions pertain to events
that nay have uuuutuJ during the prior ownership of the property. The
Disclosure Document also notifies the transferee that property owners
may be held liable for costs related to releases of hazardous
substances.
The Act allows any of the transaction participants to void any
d>ligat<«» to accept or finance a transfer not yet finalized, under
either of two circumstances: the Disclosure Du».xuiimit uncovers
previously unknown environmental problems at the property; or the
transferor *«<"»« to comply with the disclosure requirements.
Participants «ust void the transaction within 10 days after demand for
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or receipt of the Disclosure Document.
The Act is somewhat different from New Jersey's ECRA, and
Connecticut's Industrial Transfer Law: it only requires disclosure
regarding the environmental condition of the property, and does not
require that cleanup occur before the property is transferred.
Furthermore, unlike New Jersey's ECRA, which allows buyers to void
transfers even after transfers are closed, the Illinois Act permits
parties to void the transaction only if it has not been closed or
finalized. Also, in New Jersey the State government nay void the
transaction, whereas in Illinois only the "parties to the real property
transfer" nay do so.
Another difference is that the Illinois Act does not explicitly
require site environmental investigations during property transfers.
Moreover, any investigation performed does not require prior approval by
the State government, as is the case in New Jersey. Furthermore, there
is a potentially wider range of properties covered by the Illinios Act
than either the New Jersey or Connecticut laws. This is because
Illinois' regulations are triggered in part by SARA Title III and OSKA
Hazardous Ccmnunication Standards.
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UUP1XK IV
POLICIES AND PRACTICES OF FRIVAIS AMD PDBLIC INSTITOnONS
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IV. fnt.rr^fs AND H»CTIfTM or pgrVMB MP HIRT.TC IM3Tj.wrj.ONB
X. MULVJUIli INSTITOT
One of the emerging concerns among lending institutions is that of
financial liability for cleaning up property contaminated by hazardous
substances. Borrowers from these institutions (such as banks, savings
and loan associations, thrifts, and mortgage companies) often offer real
estate as collateral against their loans, and most loans for real estate
automatically involve using the real estate as collateral. In such
cases the lender holds a lien against the property, and in the event the
borrower defaults on the loan (because of bankruptcy or other inability
to pay the loan off) the lender can foreclose on the property and is
free to dispose of those assets as it sees fit. When lenders foreclose
on contaminated property they become liable for the cleanup costs.
Sometimes borioners default on their loan because they become liable
for the costs of cleaning up contamination from hazardous substances
discovered on their property. They may not be able to afford the
cleanup costs, or may declare bankruptcy and lose the property rather
than pay for the cleanup. The lender then forecloses on the property
and effectively becomes its "owner/operator*. Conversely, a borrower
may default on the loan for other reasons, the lender forecloses on the
property and take ownership, and contamination is found before the
lender can dispose of the property. In either situation the lender
potentially liable for the costs of contamination cleanup.
Several lending institutions have policies addressing issues of
liability arising tarn contaminated property, and provide guidance to
their lending officer* and underwriter* on property aumwjmiit* to
ensure the property is free of enviremantal contamination. Bie nature
of these policies and guidance duuuBants varies from state to state
because of differing environmental, and other, laws. However, for the
purposes of illustrating yrff of the practices prevalent in the banking
IV-1-
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industry, riiernegad here are the policies and procedures followed by one
bank in Connecticut and are in California. In addition, this section
contains a discussion of the policies of a major real estate group.
1. Policies and Procedures of a Connecticut Financial Institution
In Connecticut, as has been described in an earlier section,
lending institutions are acutely conscious of the issues of financial
liability for envirorsnental contamination. Thus, several banks have
comprehensive policies addressing those issues. He were able to obtain
information on the policies of one such bank in Connecticut. This bank
(which has advert that information on its program be used in confidence)
also specifies procedures to be used for all individual transactions of
$250,000 or more, in which real estate is being taken as security. Ihe
purpose of the assessment "is to attempt to quantify and reduce the
risks involved in real estate transactions given the current state of
legislation as it relates to the Superlien". Site assessments are
conducted at two levels — Preliminary, and Formal.
Preliminary assessments consist of five main tasks:
e Site Inspection — The site and structures are
observed for indications of possible contamination,
including discolored water or soil, dead vegetation,
land fills, carelessly handled drums, buried oil
tanks, and the presence of asbestos or transformers
using PCB coolant oils.
• Review of 10K and 8K Reports — If the borrower is a
public company, the Securities and Exchange
Commission (SEC) requires that these reports contain
ar, environmental liability statement.
• Property History Check — Representations are
obtained from the borrower and seller of the
property regarding the prior and anticipated use of
the property. In addition, this task includes a
survey of public records, title searches, and a
review of prior businesses utilizing the property.
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• Department of Envirormental Protection Check — A
letter of inquiry regarding the property is sent to
the CEP, which checks for hazardous waste, air, and
water resources compliance. In particular, checks
are made for current toxic waste sites, and
properties with contaminated wells, for which the
DEP has lists.
• Negative Declaration Review — Connecticut requires
certain types of businesses to submit "negative
declarations" before transferring property. These
documents are reviewed to learn about the nature of
any spills at the site, and cleanup actions.
The bank provides a comprehensive "Property Research Checklist" to help
lending officers to conduct preliminary assessments. There are also
questionnaires to be completed by the borrower that provide supplemental
information on the site, and on the possible presence of asbestos.
Formal assessments consist mainly of subsurface exploration. A
hydrogeological consultant determines, and if possible quantifies, the
extent of the problem, and recomoends remedial action. Some recommended
tasks include installing monitoring wells, pressure testing underground
tanks, and excavating test pits for subsequent laboratory analysis of
soil and groundwater. After the formal site assessment, the results are
sent to the bank's engineering consultant for interpretation and
evaluation. The bank requires forma] site assessments for all
transactions involving gas stations, dry cleaning, electroplating/
anodizing operations, chemical or petroleum manufacturing/prooessingy
storage, photo processing, hat manufacturing, tobacco land, and fruit
orchards.
2* Policies ***** Tn H tilirrtff ot a C^l * fo**1 •* • Financial
A major national banking corporation in California has developed
guidelines for environmental gmaomnatifem of crmnryrrial and industrial
properties on which the bank issues loans. It i* the policy of the bank
to require a Hazardous Waste and Toxic Material Investigation Report for
all real estate transactions. The' policy requinc that the report be
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prepared by a qualified environmental engineering firm that has been
approved by the Bank.
The assessment for hfisarrtcnis mntprials consists of seven
parts: An offsite review; a review of present and proposed uses of the
site and surrounding land; a review of the past use of the site and
surrounding land; a walking inspection of the site; a study of water
sources; a soil and subsurface investigation; and other observations.
The first part of the offsite review consists of determining if,
within a two-mile radius of the site, there exists: A superfund site; a
suspected contaminated site; operating landfills; inactive landfills or
dumps; hazardous waste facilities; or industrial or wastewaster
discharges to surface water that run through or near the site. The
second part involves contacting federal, state, county, or local
agencies to obtain the latest information concerning possible
contamination within a two-mile radius of the site.
The review of the present and proposed uses of the site and
surrounding land starts with examining aerial photographs, and
indicating the present use of the site and surrounding land within 1/4
mile of the site. Seme of the uses indicated in the guidance document
are: farming, residential, gasoline stations, underground tank storage,
oil or petrochemical operations, manufacturing, mining, vacant land, and
timber land. The next step is to identify any land within 1/4 mile of
the site that is proposed for a permitted land fill or hazardous waste
facility. If such exists or is planned, details are obtained as to the
potenti?.] of such facilities creating an adverse environmental impact on
the subject site.
The review of past uses of the site and surrounding land
includes obtaining information from local government officials or long-
time residents about the past uses of the site and surrounding
properties within I/A mile. Potential information sources include local
agency personnel and officials familiar with the locale and its history
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(title officer, registrar of deeds, township clerks, etc). The review
also includes providing a history (Chain of Title) of the property since
January 1, 1940 and establishing a consensus of information on past
uses, particularly to identify any former use involving storage,
treatment, and disposal of hazardous substances or toxic materials.
Other steps in the review of past uses include checking and
comparing past and present aerial photographs to identify development
and past uses; and determining if the site or surrounding land within
1/4 mile of the site had been used for one of the following purposes:
vacant land; agriculture (pesticides or herbicides used are to be
noted); pasture/range land; tank, drum, or equipment storage; industry
or manufacturing (the type of facility is to be noted); mining,
quarries, or sand and gravel extraction; oil and gas exploration;
chemical, petroleum, or waste storage/processing/injection wells;
military installations including bases, armories, arsenals, or test
ranges; or fill areas. In particular this review must identify if there
are or have been any liquid fuel storage tanks on the site, determine if
they were used for heating fuel, vehicle fuel or process fuel, and
establish whether they were above or below ground, the age and number of
tanks, and their capacity. The review must also determine if there have
been any known leaks or spills associated with the tanks.
The walking inspection of the site involves observing for
discolored or disturbed soil areas; areas of sparse, sick, or dead
vegetation; drums or storage tanks (the type must be noted); discolored
or polluted water; unusual or noxious odors; groundwater monitoring
wells; road or two-tracts with no apparent outlet or purpose; asbestos
(existing buildings or structures); and PCBs (existing buildings or
structures). If any of those conditions are observed, the guidance
document recommends further investigation and testing to determine the
extent of any soil and groundwater contamination. To document the
analysis of the samples tested a laboratory report is required. This
report fr»yri>~s any tests nade and indicates the chemicals tested for,
the reasons for testing these chanicals, the concentration found, and
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the allowable limits of concentration within applicable standards.
Finally, the reviewer is required to provide ocnnents regarding the test
results, conclusions and reccnraandations pertaining to any remediation
that nay.be required, and best estimate of costs for any remediation.
Assessing water sources involves identifying the bodies or
streams of surface water that are present on the site such as ponds,
lakes, wetlands, or swamps, rivers, creeks or streams; and determining
the proposed method of supplying drinking water to the site, such as
private wells, conrasiity or subdivision wells, or public water supply.
If the drinking water is to be supplied by ccnmunity or private wells,
the quality of water provided must be determined. This part also
includes developing a current groundwater contour map locating the
project site on that map, which should also show the approximate
direction of groundwater flow.
lhe soil and subsurface investigation includes a review of
boring logs of the site and observing for the following conditions:
discolored soils or groundwater; fill material or a typical material;
wide variations in soil characteristics between borings; and unusual
odors in soils or groundwater. If any of these items are indicated,
additional testing is required to determine the extent of any
contamination of the soil or groundwater. The detection limit, result,
and action levels for all constituents tested must be provided.
Other observations include any unique environmental factors or
aspects of the site history that would justify further investigation.
3. VolieiM and Procedure* of a national AM! Estat* Group
The focus of the environmental policy of a national real estate
group is captured in their statement: the "best policy in managing
environmental problems i* to be socially responsible, activated to
iaprove the corporation's peifoimanoe while maintaining compliance with
both legal requirements and the corporation's policy". Ohe policy
-------
recognizes that "one of the major issues of hazardous substances on the
property is the question of future liability and indemnities". This is
reflected in the way they A>aT with the issues of contamination, and
"appropriate inquiry" during site assessments. The policy reads: "All
enployees dealing with hazardous substance problems should be guided by
the reasonable person's standard. This standard involves placing
yourself in the position of a reasonable person and determining what he
or she would do under the circumstances. This cxauuun sense approach is
necessary in order to reduce liability to third parties".
The Policy Statement and Checklist provides detailed procedures
for evaluating the risk of contamination on property owned, leased, or
managed by the real estate group. Particularly when a loan is involved,
one of the first steps in the process is to review the nature of the
debtors business to estimate the relative probability that hazardous
substances have been used on the premises. The Checklist consists of a
General Hazardous Waste -Survey, an Asbestos Survey, and a PCB
contamination Survey.
The General Ha7^r^"° Waste Survey has four main parts —
assessing the potential of a hazardous waste problem; determining the
prior use of the property and the neighboring properties; using
specified techniques to obtain more information when a problem is
suspected; and applying a second phase of investigation if a problem is
suspected.
To aec^gg the potential of a hazardous waste problem the
Checklist recommends observing for chemical or waste drums onsite; above
or urderground tanks; disturbed soil or new dirt fill onsite; evidence
of drilling (holes opened or closed vith concrete, or capped) or
monitoring wells? ponds, sumps, drain covers, catch basins, or pits;
discolored ground, dead vegetation, odors, or rubbish heaps; and soils
producing radon gas.
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To determine the prior use of the subject and neighboring
properties the Checklist enumerates the types of activities that usually
involve hazardous substances. Some of the activities listed are:
recycling of materials; treatment or storage of hazardous waste, fuel
storage tanks, and underground sunps; dry cleaners, jewelers, painters,
furniture makers and carpet makers (formaldehyde); petroleum businesses,
gasoline stations, oil fields, and refineries; chemical manufacturers,
users, and storers; mining or refining operations, metals or can
manufacturing, and businesses that clean, treat, or coat metals; onsite
water treatment of waste streams; sewer inputs or .outfalls; defective
sewage treatment facilities; medical or dental buildings, hospitals,
pharmacies, and drug manufacture; manufacture of electronics or
coqpcnents (solvents); agriculture (pesticide contamination, crop
dusting, and fuel leaks); prior landfills or local rubbish dunps;
abandoned piping and other pipelines; and stains on floors and pipes
(indicates leaks).
If a problem is suspected the Checklist reccnmends the following
techniques to get more information: speak with the occupants and
neighbors, and rtisniss with local police, building, fire, health, and
planning department officials the prior use of the site and any
violations; obtain a record identifying the previous owners and
occupants, including a deed chain; review state and local records for
permits and enforcement actions; check the records for underground
storage tank registrations, required regulatory permits, and hazardous
waste manifests; verify that the sits is not on any state or federal
•uparfund list; check with the Regional Mater Quality Board about site
use; check with the local sanitation district about sewer discharge
violations; check local court indexes for pending toxic tort suits;
inspect Public Rignt-to-Khow filings listing hazardous materials onsite
(Fire Department and County Agency); Verify existence of EE& and state
hazarrtom waste nunfcers, if applicable; obtain prior aerial photographs;
and check the local newspapers and staff reporters who cover
environmental Batters.
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If there is evidence of hazardous jiatwiaie^ an environmental
consultant is hired to conduct detailed onsite investigations as part of
the second phase of the assessment. Regardless of the outcome of the
General Hazardous Waste Survey the site is assessed for PCB and ashpstof>
contamination. Electrical transformers and capacitors are inspected for
leaks, particularly if they contain PCBs; other electrical equipment are
also inspected to determine if they contain PCBs. While checking for
the Checklist recommends careful inspection of all buildings
built before 1980. The checklist points cut that "the likelihood of
asbestos varies with the nature of the property and is particularly
great in high-rise or coranercial buildings, and less likely in single
family residences where asbestos may be limited to furnace, piping, and
sprayed-on ceilings and tiles". Special emphasis is placed on "friable"
, which contains more than 1 percent by weight of asbestos, and
which crumbles and powders easily.
B. PUBLIC INb'lTllfl'lOMS
1. Federal National Mortgage Association
The Federal National Mortgage Association (Fannie Mae) publishes
a document entitled "Eiwironroental Hazards Management Procedures for the
Delegated Underwriting and Servicing Product Line". It is a part of the
Delegated Servicing and Underwriting Guide, and specifically pertains to
the environmental reviews necessary for multifamily housing products.
The document describes the procedures that lenders must follow to assess
and maintain the environmental condition of properties pledged as
security for milt if ""^y loans.
Fannie Mae assigns to lenders the primary responsibilities of
conducting environmental assessments of properties before Fannie Mae
will provide an underwriting commitanent; and confirming, on an ongoing
basis, that after purchase the borrower is maintaining the property in
an environmentally sound manner. Fannie Mae does not endorse or approve
environmental consultants; rather, lenders are responsible for selecting
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environmental consultants, and oust take appropriate steps to ensure
that a consultant is qualified to perform the required work. Also, the
lender will be solely accountable for the performance of consultants.
Assessments are to be conducted in two phases. The Rjase I
is mainly a screening exercise, and it focuses on a review of
available documents; interviews with people aware of site operations;
and an inspection of the site. Ihe purpose of the Riase I assessment is
to quickly determine if information currently exists to clearly evaluate
a property's environmental status. This includes a description of the
property based on, among others, aerial photographs, site surveys, title
history, zoning and land use maps, and interviews with local fire,
health, land use, and environmental enforcement officials. Among hazard
sources investigated are asbestos, PCBs, radon, underground storage
tanks, and waste sites. Fannie Mae's guidance document includes a
fairly detailed checklist for Riase I assessments. Terriers are expected
to gather enough information to document each assessment decision. If
the results of the Phase I assessment are inconclusive, a Riase II
assessment is required.
Riase H assessments generally involve a more detailed review of
the site than Riase I assessments, and include specialized physical
sampling. The Riase H asuesrauent oust be performed by a qualified
environmental consultant on the lender's behalf. If the property is not
acceptable as measured by either of the assfisarents the property is
considered ineligible and must not receive an underwriting ccntnitnent.
2. Fader*! Savings and X0an T">" "••""• Corporation
Ihe Federal Savings and loan Insurance Corporation (FSLTC) acts
as a trustee or fiduciary for failed savings and loan associations. It
does not buy or sell property or assets directly for its own purposes,
but when insured financial institutions fail it has no choice but to
srcperties on their behalf . Therefore the FSLEC assumes
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potential liability associated with hazardous waste/materials releases
en properties it acquires through bankruptcy proceedings.
The PSLIC has no environmental department, and assessments are
conducted by staff ranging from asset managers to field supervisors,
along with their other duties. These assessments are conducted on an
"as-needed" basis. There is no formal policy addressing the issue of
potential liabilities for cleanup of contamination (although a policy is
currently being drafted). However, hazardous waste contamination is an
important concern, and the need for environmental assessments and
cleanups (if necessary) is well recognized in the FSIJC. This is
particularly true if the FSLIC is to get a good price while selling
property contaminated by hazardous substances.
According to the deputy director in California, FSLTC currently has
no formal protocol for assessing the presence of hazardous substances on
acquired properties. Instead, relevant information regarding the land
use history on potentially contaminated properties is investigated by
corporate and outside environmental attorneys, title officers, and
professional property appraisers. If further environmental site
assessment is deemed necessary based on the information reviewed by
these professionals, contaminant investigations and remedial operations
are performed by environmental attorneys and environmental consulting
and engineering firms contracted by FSLIC. Site remediation is
performed to a level that meets the requirements of the appropriate
local, state, and/or federal regulatory agency responsible for
contamination abatement.
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A HLVlbV OF CASE HISTORIES
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V.
A review of case histories reveals diverse and unusual circumstances
under which site assessments are conducted, and highlights certain
general principles for conducting them. Moreover, when site assessments
are well documented we can learn of the reasons why the assessment
proceeded in a particular way, why certain steps in the assessment were
included, and why certain steps may have been emitted. These reasons
are important because ultimately the "appropriateness" of a defendant's
inquiry may be judged in a court of law; and judgement will probably be
based on the acceptability (or lack of it) of the defendant's actions,
and the reasons, or justification, for them.
Many site assessments associated with property transfers are
conducted with the express purpose of limiting the liability of parties
to the transaction. Therefore, a review of such cases is directly
relevant to the issue of liability reduction under SARA. The objective
of such a review is to identify the efforts currently being taken by
participants in property transfers to limit their liability. In
particular, the review must highlight the elements of the environmental
assessment, the decision process used to make certain the assessment is
comprehensive, and the reasons behind the steps in the assessment.
Sens states, such as New Jersey, require site assessments during
transfers of certain types of property, and provide the necessary
guidance for conducting them. New Jersey, in particular, publishes a
detailed guidance document and is involved throughout the assessment
process, including reviewing and approving assessment plans, and
suggesting alternative steps in the assessment. Although in New Jersey
the participants perform site assessments because the state requires it,
rather than as a voluntary effort to limit liability, those cases can
provide insights into the "appropriate inquiry" issue.
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New Jersey's objectives are similar to those of the Federal
government — to clean up sites contaminated by hazardous waste as soon
as possible and make the responsible party pay for cleanup. In
addition, New Jersey explicitly requires site assessments during
property transfers so that the seller of the property does not pass the
burden of contamination onto the buyer; and so that any contamination
will be identified early. Therefore, the State's program is geared to
ensuring that if contamination exists it will be found. This is
reflected in the guidance provided during assessments, and the review
process. A review of site assessment cases in New. Jersey will provide
an insight of the decision-making processes by regulated parties as well
as regulating agencies in their efforts to ascertain the presence of
contamination. This, after all, is the core of the "appropriate
inquiry" issue.
A. ****** COMPANY, INC.
1. Background
The ****** Oarpany at the Elizabeth, New Jersey, site was
engaged in the manufacture of sewing machines from the 1890s through
1982, when they ceased operations and triggered ECRA review. Among the
processes conducted at the plant were aluminum and zinc diecasting,
molding of plastics and fiberglass, machine tooling, electroplating, and
painting. One other operation existed on the property, namely the
Central Railroad of New Jersey, involving laying railroad tracks.
Railroad operations ceased at the property in 1976.
The wastes generated at the site were strictly by-products of
metal working and finishing operations, as the plant was not engaged in
producing chemical products. Elf-product hazardous substances and wastes
were generated, stored, and treated on the property — by-product waste-
cutting, lubricating, and hydraulic oils were generated from various
machining and metal working operations. Other h^^T**1"8 wastes produced
en-site were foundry sand, spent degreasing solvents, spent plating
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solutions, and sludge from wastewater treatment. Above and below ground
storage tanks were used, but there were no surface impoundments or waste
landfills located on the property. Several transformers and capacitors
with PCB-cooled oils were installed on the property, and the insulation
on many of the pipes contained asbestos. However, in the early 1980s
several PCB-contaminated transformers and capacitors were removed from
the site and djqpnRpri of.
2. Areas of Environmental Concern
In 1978 the USEPA Region II alleged that ****** had violated an
NPDES permit for the Elizabeth plant. ****** proposed to the EPA a
wastewater treatment program that would involve discharging treated
wastes to a publicly owned treatment works (FOTW) and thus obviate the
need for the NPDES permit. After constructing the treatment system and
obtaining permission from a FOIW to discharge treated wastewater to
their system, the company filed with EPA an Affidavit of Exemption from
the NFDES permit. The affidavit attested that no pollutants were being
discharged into public waters or land. The EPA took no further
enforcement action on this matter.
In 1981 a release of PCB-contaminated waste oil was discovered
at the site. Ihe release was associated with the storage of waste oils
in a series of ten underground storage tanks located adjacent to the
powerhouse (where some transformers and capacitors were installed) . Ihe
tanks and surrounding contaminated soil were removed and disposed.
In 1982 the USEPA alleged that ****** had violated Sections 6(e)
and 15 of TSCA at the Elizabeth plant. Ihe EPA cited a failure to have
annual documents for 1978-1980; failure to maintain records of regular
inspections of PCB-cantaining transformers; and failure to test
hydraulic systems prior to November 1979. Ihe penalty imposed was
$60,000. Thereafter, ****** entered into a settlement agreement with
EBW and a Consent Agreement and Final Order (CAPO) was issued that
reduced the penalty to $20,000.
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In the sane year the New Jersey Department of Environmental
Protection alleged violations at the Elizabeth plant. The Notice of
Prosecution claimed that a storage tank and feed line were constructed,
installed, or altered without ****** first obtaining a permit from the
NJDEP. ****** settled the matter by paying the penalty of $200.
3. The sapling Plan
The first step in the assessment was to conduct a literature
search. This would define the manufacturing activities conducted at the
site, their location and historical tine frame, the chemical oorpounds
and wastes generated by these activities, and the fate of these
chemicals. Sources included texts on foundry practice, electroplating,
metal preparation and finishing, and metallurgy; reports prepared by the
New Jersey Economic Development Authority; files from the New Jersey
Department of Environmental Protection and the USEPA; and site and
process specific information provided by ******.
Sampling locations were determined in the field prior to sample
collection but were chosen to be representative of areas of concern.
Tar example, soils surrounding PCB-containing transformers were selected
based on proximity to runoff from the concrete pads on which the
transformers were mounted, soils immediately adjacent to the pad, and
soils a few feet away. In this way an overall composite of soil was
obtained to establish KB content. Areas that clearly appeared oil-
laden were not necessarily sampled, but were noted for future cleanup.
Soil samples were gathered from various locations around the site to be
analyzed for KB, toxic metals, and total extractable hydrocarbons (1EH).
The majority of the tanks on-site were reported to have
contained fuel oils. These tanks were analyzed for PCS and TEH. A
lead-lined wood tank was analyzed for all the 128 priority pollutants
bacwg» tha report of its contents was uncertain. Liquids in existing
tanks were sampled and analyzed for the presence of various chemicals.
In addition, dust bins that contained granular, pawJer-like substances,
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one light grey the other dark grey, were sampled and testnrt for
volatiles and extractables.
Originally three on-site wells were to be used for groundwater
sampling. However, one well had been destroyed, and the other two were
unsuitable because clear water could not be obtained. Therefore, a test
pit was dug to obtain a water sanple for priority pollutant analysis.
Another test pit was excavated for soil sanple priority pollutant
analysis to determine background conditions for subsurface soils. A
third test pit was excavated in the area of the.leach pit, into which
effluents from the plant had been discharged. A fourth pit was
excavated in the vicinity of the 7000-foot system of underground
discharge pipes and sewers, where possible accumulation of residues such
as KB was suspected. At these last two pits sanples were taken for
priority pollutant and toxics analysis.
Sanpling within buildings included scraping residues fron
floors, walls, vent pipes, and air ducts. Sanples were tested for KB,
•HH, toxic metals, volatiles, and extractables. Liquid sanples were
were also taken where possible. Sanpling locations were chosen based on
knowledge that certain processes were being conducted in those areas,
and their appearance. For exanple, the aluminum and zinc diecasting
area, the location of the fiberglass chemical storage tanks, the
electroplating tank pads, and waste disposal trenches were all chosen as
sanpling locations. In addition several other areas were chosen because
their appearance indicated a problem. For instance, soils in some areas
appeared to have concentrations of red and green oxidized metals that
had bonded or were in slag form; sanples of the plating tank pads
included residue having an acid-metallic waste appearance; dust samples
were brown on the easterly side of the beams and ventilators in the
electrical and ventilator area in the center of the manufacturing area
of the building, but were grey on the westerly side; and there were
piles of black residue at the site. All of these were signs that
sampling was necessary in those areas.
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4. infi
This f^co highlights several interesting aspects of site
assessments. First, the investigation involved a detailed literature
search that drew upon a number of diverse sources. The purpose of this
activity was ultimately to identify areas of potential or actual
environmental concern. For example, knowing the types of activities
conducted at the site tells the asspBBnr of the possible types of
substances required (and perhaps stored on-site), and the possible
wastes that could be generated. Obis knowledge nay. be used to identify
areas that require ispydal attention. Die sampling locations at the
zinc and diecasting area, the location of the fiberglass chemical
storage tanks, the plating tank pads, and waste disposal trenches were
tylfiftgd for ^j*8 reason.
Theoretical knowledge about the manufacturing processes, when
combined with site and process-specific information gained by
interviewing the facility staff, allows the assessor to confirm areas of
environmental concern, and perhaps to identify new ones. For example,
knowledge of the exact method and physical route used to transport,
store, and treat or rfirpnnn wastes is invaluable in determining if
samples are necessary for those wastes, where they should be taken, how
many samples there should be, and what to test for. Additionally,
reviewing enforcement actions and previous environmental accidents
focuses the assessors attention on potential problem areas (such as the
PCD-containing transformers in this case) . This discussion illustrates
the importance of one of the steps in a comprehensive site assessment —
a review of the historical background of the site and its use.
Another feature of the sit* asraaiagnpnt was how widespread the,
sampling was. Because of the diversity of the ptrrfft^uu, the scale of
the operations, the nature of fftmiinnl substances used and stared, and
the nature of the wastes them was a potential for extensive, yet
unknown, contamination. Furthermore, the operations at the site had
originated and continued since the last century, during the most part of
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which there were few recognized environmental concerns. Therefore,
accidental spills or discharges, storage or disposal of wastes on-site,
and other environmentally damaging activities nay not have been
recorded, and nay have remained unknown. So even if there were no
obvious signs of contamination a ocnprehensive site assessment would
have been desirable. This example highlights the iaportance of making a
decision based on what might be considered "reasonable" suspicion.
Other noteworthy aspects of the site assessment were the
decisions to sample at locations based on their appearance; and the
thoroughness with which it was conducted. Discolored soils, areas of
dark residue, and acid-metallic looking residues in the plating tank pad
were all sanpled; sampling the dust on the beans and ventilators, and
the granular substance in the dust bins showed thoroughness. Visual and
other sensory indicators are extremely important in identifying sample
locations, particularly discoloration, signs of rusting or decay, leaks,
dead or dying vegetation, unusual smells, etc. and must be followed-up
on. Likewise, thoroughness involves following up on even the slightest
sign of contamination.
B. **** COMPANY, INC.
1. Background
**** CD., Inc. had been manufacturing nuts and bolts since
1945. Ihey ceased operations in 1987, triggering BCRA even though no
sale was anticipated. The facility in which **** had their operations
was cou-tructed in the early 1900s, and was occupied by a seamstress
operation, where materials were sewn into finished products. It ceased
operations in 1945, after %Aiich **** moved into the premises. No other
businesses have operated at the facility.
Upon ceasing operations **** initiated a preliminary inspection
and sampling at the facility, and an "at-peril" cleanup was begun.
("At-peril" cleanups are those that have not been approved by the New
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Jersey Department of Dwironmental Protection, and are performed with
the risk — peril — that they may have to be redone if the Department
does not approve then later.) The inspection revealed two main areas of
concern: An underground fuel oil storage tank, and an oil-stained area
of soil that encompassed nearly the entire back yard of the property.
2. Th» Sampling Plan
****'s plan combined sampling and cleanup activities. They
proposed to clean, excavate, and remove the under-ground storage tank.
The soil around the tank was to be excavated until visibly clean soil
was encountered. Post-excavation soil samples would then be obtained,
one from each side of the tank excavation, and one for every five feet
of tank length along the tank's central axis. A total of five sanples
would be obtained and analyzed for TEH and base neutral compounds.
The plan proposed to excavate the complete oil-stained area.
The stains were believed to be either lubricating oil, which was
occasionally drained from the machinery, or oil that was used as a
coating on steel bars (to prevent rusting) that were stored at the back
of the building. Surface oil that was visually contaminated was to be
excavated and renewed, and excavation was to continue until visibly
clean soil was encountered. Post-excavation soil samples were to be
obtained, one every five feet along the excavation's central axis.
Samples were to be analyzed for TEH, volatile organics, and base neutral
compounds. The plan document did not discuss groundwater sampling,
perhaps because **** did not suspect groundwater contamination.
3. Ouepauy Actions
The oil tank was removed, and it showed no signs of leakage.
The on-stained area, which was overlying the tank location as well as a
majority of the rear lot, was excavated to a depth of about five feet,
where the zone of groundwater saturation was encountered. At this point
excavation was halted and post-excavation soil samples were analyzed for
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total petroleum hydrocarbons (TEH). Mast of these sanples were found to
have TEH levels above the standard action level. For any chemical this
is the concentration level that makes it a contaminant, and
concentrations at or beyond this level necessitate cleanup action.
As soil had been excavated down to the zone of saturation and
was not found to be "clean", it appeared that the groundwater system was
impacted. As a preliminary investigation, and by way of confirmation,
two test borings were conpleted, each at six, eight, ten, and twelve
feet depths. Data from borings showed that contamination levels were
below standard action levels in sanples taken at twelve feet, indicating
a floating product layer that had not permeated to or below twelve feet.
Two monitoring wells were installed, one at the center of the
nest highly contaminated area and the other at the furthest feasible
location. A third well was considered desirable at another location but
was infeasible because of restricted physical access. Groundwater from
these two wells was analyzed for TEX, polyeyclic aromatic hydrocarbons
(PAH), and volatile organic confounds. Results showed only TEH to be at
elevated levels, and only at the well at the center of the contaminated
area. The other well showed no groundwater contamination at all.
Visual observations during well sanpling showed a product layer
approximately 9.5 inches thick in the contaminated well.
The cleanup strategy suggested was to punp out the groundwater,
treat it to remove the contaminants, and then discharge it to a publicly
owned treatment works (POTW). Meanwhile groundwater being punped out
would continuously be sanpled and analyzed for contaminant levels, and
the punping and treatment would continue until the sanples were "clean".
4. Znf<
This case allows us to draw sane inferences regarding the
definition of appropriate inquiry. In this case it was clear that the
property was contaminated. Therefore, the site assessment was geared
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more towards determining the extant of contamination rather than merely
its preseno*. Regardless of its obviousness, ****'s strategy points to
an important principle of site assessments; Identify areas of actual or
potential environmental concern, and investigate them. (Had there been
no visible signs of contamination, such as the oil-stained area, the
next logical point of investigation would have been the soil, and
perhaps the grounduater, around and below the underground tank.)
The original sampling and cleanup plan did not anticipate the
need for groundwater sampling. However, it was adapted to include this
activity upon suspicion that the grounduater had fr**""^ contaminated.
This points to another principle of site assessments; Site assessments
are not meant to be rigid procedures that are conducted by blindly
following a checklist. They must be flexible, and allow for judgement
on the part of the assessor. Admittedly, in this case it was obvious
that the groundwater needed testing, and not to have done so would
clearly have been considered inappropriate inquiry. However, the lesson
is that a "complete" site assessment (or what would be considered
"appropriate inquiry*1) must incorporate those activities necessitated by
reasonable suspicion, even if they were not originally planned.
c. ***, nc.
1. Bad
The property is privately owned by an individual, and is leased
out to ***, Inc. The individual acquired the property from the Oondit
Trucking Co., whose primary business was moving and storing furniture.
*** had occupied a part of the premises sine* then. One property was
resold to other individuals in April 1984 and *** remained as tenants
under the new owners. *** is a machine shop, and stored on the premises
a 55-gallon steel drum of transmission oil for lubricating their
••chines, and a 30-gallon steel drum of mixed solvents for cleaning and
preparing certain metals for
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There had been no known spills or discharges from these or other
containers, and *** did not have any underground storage tanks. Thus,
when the owner submitted the ECRA, initial notice a negative declaration
*,
was requested. The New Jersey Department of Environmental Protection
subsequently inspected the site and noted rusty drums on an asphalt
platform outside the building, leaking oil. The NJEEP declined the
request for a negative declaration. Further, they required the property
owner to remove the drums, clean the oil from the asphalt, and provide
documentation of proper disposal. In addition the owner was required to
submit a sampling plan to determine the extent of contamination.
2. The Sampling Plan and Owner's Actions
The area in question was located on the northwest side of the
property, adjacent to the corner of the building. *** used this area to
store waste oil in a drum for its removal by an "oil scavenger11. ***
also used the area to store metal shavings in drums for removal. The
area was generally sloping in an easterly direction, and was covered in
asphalt. There was natural ground cover a few feet upslope from where
the drums were stored on the asphalt.
The sampling plan proposed collecting soil samples at the point
where natural ground cover adjoined the asphalt, and testing the samples
for petroleum hydrocarbons (TEH). A total of four samples were
proposed, the locations of which were to be determined at the time of
actual sampling. Two locations would be selected and two samples would
be taken at each location, the first being at the surface, and the
second being one foot below the surface.
The NJEEP rejected this sampling plan, and required a detailed
scale site map showing areas of environmental concern and locations for
sampling. In addition the NJEEP required samples to be analyzed for not
only PHC but priority pollutants as well. Subsequently, the applicant
submitted the materials required by the NJEEP and the plan was approved.
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Two locations were chosen and five soil samples were taken, one
each at the surface and at a depth of one foot for each location. A
fifth sample was taken at a depth of one foot at one of the locations,
as a duplicate sample. The samples were analyzed and were found to be
contaminated with oil, with concentrations decreasing with depth. The
cleanup plan was to excavate the soil, conduct further sampling and soil
analysis, and if necessary further excavation until the soil was clean.
3. Inferences
The sampling plan involved soil sampling at the point where the
natural ground cover adjoined the asphalt, even though it was upslope of
the drums, and there were no visible signs of contamination. This is an
example of when an area of potential environmental concern has been
identified and the site assessment extends beyond the normal sphere of
contaminant influence. One would expect that, as the on leaked only
onto the asphalt, and the asphalt was sloping downwards away from the
uncovered soil, no oil would have contacted the open soil. Therefore,
sinply cleaning up the asphalt would seemingly be sufficient to take
care of the obvious environmental concern.
The leaking on, however, could have spilled on the open soil in
a number of other, not-so-obvious, ways — the drums could have been
accidentally moved to the edge of the asphalt, or even onto the natural
ground, even though their normal storage location was on the asphalt a
few feet away from the edge; oil could have been accidentally, and
unknowingly, spilled on the ground while moving the drums to their
storage location; or leaking oil could have seeped through any small
cracks in the asphalt into the aoil below, and eventually spread through
capillary action in the soil, own upslope of the leaking oil. Thus, if
during a site t**^*****"- an area of environmental concern is identified
then a thorough investigation of the surrounding area would seem to be
justified, even though there does not seem to be an obvious route for
tn^fi C3OntflBm.n8tAOI^ ^DO fiDOHBAQ*
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****** NNTXCmX. BMK
1. ffti'^K' j I ' * "^
****** Bank was assigned trust to the subject property and
had held it for a number of years. Approximately one year ago, they
became worried about potential problems with certain tanks on the
property and had an initial site investigation done on the property.
This initial investigation, while only consisting of: a literature
search of the bank, a search of local regulatory agency and owner files,
a site walk, and interviews with local land owners, revealed the
necessity for further site investigation. This original work was part
of a program that the bank's trust department was performing to identify
potential problems that could lead to liabilities on their part due to
their involvement in the trust properties. This involvement sometimes
included having their name as the listed owners of the property.
The first phase of the project was performed for relatively
little cost by a consultant. The reocmnended second phase for this site
was estimated to cost a considerable amount of money. The property
aires were against spending this amount of money to potentially discover
more problems and thus incur more costs, and they refused to approve the
expenditure of funds for the second phase of work on the property.
Subsequently, the bank trust department went to court and got approval
to ccnroit the funds to perform this project.
2. Location
The site is located within 10 miles of the Pacific Ocean, in a
rural setting, near roads and very close to a tributary of a major water
course. Sixty acres of orange groves and a few farm houses presently
occupy the area surrounding the site. Ventura County, California is
very conservative from a regulatory point of view and has been very
aggressive about site cleanup requirements in the past.
V-13
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A 40,000 gallon above-ground oil storage tank was located on the
site. According to ranch foremen, the tank stared oil for use in smudge
pots for approximately 45 years. Ifiaks were observed in a seam of the
tank, approximately eight feet above the base, and on the south side of
the tank where access plugs are located. Soil below the plugs were also
visibly stained with oil. Oil of all types had been leaking from this
tank for approximately 25 years.
Based on discussions with the Santa Paula Water Works, local
well log data, and field observations, it was believed that this shallow
groundwater is actually a perched aquifer. Information obtained from
the Ventura County of Public Works Agency indicated that the actual
depth to groundwater is approximately eighty (80) feet below grade.
Groundwater flow direction, as reported by the Santa Paula Water Works,
was to the south (toward the Santa Clara River). Well data obtained
from the Ventura County Public Works Agency indicates that potable water
in this area is obtained from aquifers starting at 350 feet below grade.
An investigation was performed on November 17, 1987 using a
backhoe to excavate a test pit adjacent to the storage tank. The test
pit was located on the north side of the tank where discolored soil was
observed. Four soil samples were collected during the excavation and
placed in glass jars. Each jar was properly labeled, sealed with a
Teflon-lined lid, placed on ice in a cooler, and transported with a
chain-of-custody document to a state-certified laboratory.
The soil in the test pit consisted of the following materials:
black clay extending from the surface to a depth of two feet, brown
cilty clay with black Bottling from two to seven feet, and a light brown
clay was observed front seven to eight feet. What was believed to be
perched groundwater was encountered at eight feet below grade. Based on
local well-log data, actual groundwater was estimated to be about 80
feet below grade. There was a significant petroleum odor to a depth of
approximately five feet.
V-14
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All four samples were analyzed for total petroleum hydrocarbons
(TPH) using EPA method 418.1. Two samples (38 and 45) were also
analyzed for PCBs using EPA method 8080. Soil sample 45 indicated 7100
parts per million (pom) TFH at five feet. Soil sajiples 38 and 28
indicated total petroleum hydrocarbons ranging from trace levels to 63
ppro at 8 feet. Ho PCBs were detected in either sample analyzed.
Results of this preliminary investigation indicate that
significant petroleum hydrocarbon (JHC) contamination extends up to five
feet below ground surface at the location of the test pit. laboratory
analyses indicate that trace to 63 ppm TEH are present ei<#it feet below
ground surface. The geological log of the test pit indicates a clay
layer at seven feet below grade and shallow groundwater was encountered
at eight feet below grade. The extent of contamination extending
laterally beneath the tank was not investigated, nor was the integrity
of the tank bottom Known.
Based on the above conclusions it was recommended that during
tank removal, all visibly contaminated soil beneath the tank (which
extends to approximately five feet in the area of the investigation)
should be excavated and properly disposed. Eue to shallow groundwater
conditions and the concentrations of FHC in the saturated soil, it was
reconsnended that during excavation, a grab sample of the groundwater at
8 feet be collected and analyzed in the laboratory for TPH.
3. Remediation
Tank removal cumfcamaJ on April 27, 1988. This involved the
unbolting of the steel panels that emprise the tank roof and lifting
the roof off with a crane. At the time the tank vas disassembled it
contained approximately 500 gallons of oily sludge. Concrete was added
to the sludge, mixed, and placed into an e«HJump truck. The sides of
the tank were then unbolted and removed, and the oil-laden steel floor
was similarly dismantled and ^qypofl of in the end-dump truck along
with the concrete/oil mixture. The floor and concrete/oil mixture was
V-15
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trucked to a Class I «^i«ynB»i facility in Utah. All other parts of the
steel tank were sent to a metal salvage operation.
Contaminated soil removal cminenced on the next day. Previous
sampling and field observations confirmed that contaminated soil was
characterized by a medium gray color and a significant petroleum odor.
All soil exhibiting these features was removed and trucked to a Class I
H-jcpoeVi facility in Utah. The resulting pit was subcircular in shape,
approximately twenty-eight feet in diameter, and seven to eight feet in
depth. Contamination appeared to concentrate in the sandy fill
surrounding Irrigation Lines "A" and "B". Because of the abundance of
contamination underneath Irrigation Line "A", a twelve inch, privately-
owned concrete line, it was necessary to remove the irrigation line in
order to access the oily soil. Once excavation activities were
completed, the line was replaced with PVC pipe.
All soil and water samples were analyzed for total petroleum
hydrocarbons (TIH) using ERA method 418.1. All samples were collected
at the conclusion of the excavation of contaminated soil, in order to
evaluate background concentrations of TFH remaining onsite. Soil sample
concentrations ranged fron 131 ppm to 598 ppm, whereas water sample
concentrations were 7.1 mg/1, 32.1 ng/1, and 35.0 mg/1. According to
the Leaking Underground Fuel Tank (IZJFT) Field Manual, published by the
California State Water Resources Control Board, soils exhibiting TFH
values under 1,000 ppm are not considered a hazardous waste. Action
levels for TFH in groundwater are established on a site-by-site basis.
Soil samples from the perimeter and floor of the pit contained
TFH concentrations within acceptable levels, ranging from 131 ppm to 501
ppm. These samples were collected after all visibly contaminated soil
had been removed (except for the seam dlsnisaert above). Although sample
concentrations were well below 1,000 ppm, their sonewhat elevated nature
suggests a high background level of TEH may exist because of heavy oil
use in smudge pots in the surrounding orange groves (most smudge pots in
the groves have oil-stained soil patches underneath the pots).
V-16
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As Hicniggad, groundwater onsite was five feet below grade
during field activities. Whereas elevated levels of TEH in groundwater
are indicated by the three water samples collected (i.e., 7.1 rog/1, 32.1
mg/1, and 35.0 ng/1), several mitigating factors apply in this case:
1. The groundwater at five feet below grade represents
a perched aquifer, based on anple evidence from the
Santa Paula Water Works and the Ventura County
Department of Public Works.
2. Water from this perched aquifer is not a potable
water source, according to the Santa Paula Water
Works and the Ventura County Department of Public
Works.
3. Potable water in the area begins at approxijnately
350 feet below grade, based on well-log data from
the Olivelands Well 11.
4. Approximately 160 feet of clay lies beneath the
perched aquifer and above the first potable water
source, according to the Olivelands Well Number One
log.
Additionally, of primary importance is the fact that the source of the
contamination (i.e., the oil storage tank) has been cotpletely removed
from the site. It should also be noted that Union Oil supplied the oil
stored in the tank, which indicates that the oil is relatively pure.
Ihis was further confinnad by laboratory analyses, which determined that
no detectable concentrations of PCBs were present in the on.
E. CONFIDENTIAL PETROLEUM CORPORATION, CALIFORNIA
1. Background
A Colorado-based oil eqploraticn and production firm purchased
about three acres of existing oil production properly in a residential
zone of Huntington Beach, California to redevelop the onsite crude oil
production and storage facilities and enhance the property's production
capability. The land use on the subject property was exclusively oil
production since the 1920's. Oil production operations in the site
vicinity through the 1950's had typically included disposal of drilling
V-17
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fluids and cuttings in open-pit sumps. Therefore, it was suspected that
the site could contain potentially hazardous drilling and associated
wastes. These suspected wastes included old drilling raid, which
commonly contained arsenic, barium, cadmium, and lead; aromatic volatile
organic compounds; and halogenated volatile organic ocnpounds derived
from cleaning solvents and/or petroleum fuel products.
The proposed remodeling and redevelopment of the existing oil
production facility to increase the production capability was considered
an extremely sensitive issue. The project site was surrounded on all
sides by residential properties, and although an environmental inpact
study of the project required by the local planning department concluded
that the project would not have significant negative impacts on the site
vicinity, the sentiment of the local residents was strongly opposed to
the project's success.
2. Areas of Environmental Oonoarn
A hagairfr'ng waste investigation was doomed necessary in order to
comply with California's regulations regarding hazardous waste releases
and disposal practices. The two primary regulations of concern were
Title 22 of the California Code of Regulation and Division 2 of the
California Water Code. Because these regulations were enforced locally
by the Orange County Health Care Agency, Hazardous Materials Management
Division, this agency was consulted to prepare an appropriate
investigation and sampling plan.
3. The Sampling nan
A Riase I environmental property ntMVinairiTt and soil vapor
survey were performed to determine if oil production waste disposal had
cred on the property. The primary objectives of the investigations
were to 1) identify the potential preaenoe of subsurface contamination,
2) evaluate the potential for offsite migration of contamination in soil
and groundwater, 3) evaluate the potential for onsite migration of
V-18
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contamination from an offsite source, and 4) determine the location of
contaminant plume sources.
The scope of the Fhase I investigation included the following:
• a visual inspection of the property, including
onsite waste disposal evidence, waste storage areas,
production equipment and tanks, adjacent land use,
and geologic, water and vegetation features;
• interviews with selected individuals knowledgeable
about the site to develop an understanding of past
and present site usage and history; and
• a review of records and reports that nay have
indicated the potential for hazardous waste problems
arising out of uses of the site and surrounding
properties.
The results of the HVISP I investigation indicated that drill
cuttings containing petroleum hydrocarbons (FHC) were disposed onsite.
The lateral extent of FHC in the subsurface soils was determined based
on the results of the soil vapor survey. A Fhase II investigation
consisting of subsurface soil sampling and laboratory analysis was
performed to determine the total depth of soils containing FHC, and to
evaluate whether or not these soils were hazardous according to the
appropriate state regulations (Title 22 of the California code of
Regulation and Division 2 of the California Water Code).
The soil samples collected in the Fhase H investigation were
analyzed for total petroleum hydrocarbon concentrations, halogenated
volatile organic compounds, aromatic volatile organic compounds, and
toxic metals. The conclusion based on the results of the Fhase II
investigation was that the soils fliT0*"** in drilling fluid sumps were
nonhazardous according to the appropriate State regulations. Further,
it was concluded that groundwater beneath the site was not potentially
impacted by the substances rti«ynaa^ in mud sumps on the property. No
further investigative or remedial activities were required.
V-19
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4. inf
This easy study provides a simplistic, yet informative example
of the phased environmental assessment of a property suspected of
containing hazardous wastes generated as a result of oil production
operations. The suspicion that the previous oil production operations
included onsite ^epncai of drill cuttings were confirmed based on
interviews with operations personnel and reviews of existing documents
including a soils investigation report performed during a Biase I
assessment. Next, the physical properties of the cuttings such as the
lateral and vertical extent, the chemical composition, and concentration
were determined in a ftiase H fos*******'*'- -The Fhase I and Riase II
rts resulting from the above-referenced investigations provided the
petroleum corporation with solid documentation that the drilling wastes
Hjepocofi on the property are nonhazardous according to applicable
regulations, and do not pose a threat to the local water resources.
F. (REAL ES3ME) INVESTMENT COMPANY, CALIFORNIA
1. Background
A real estate investment company purchased a shopping center in
the city of Rancho Palos Verdes, Carlifornia for development into a
regional mall. They purchased separately the site of a former gas
station located on the corner of the shopping center site. The shopping
center was built in 1957 and included a chain hardware store and several
smaller shops.
The gas station site has been purchased from the major on
company. The underground fuel tanks at the site had been removed.
Subsurface contamination had occurred, apparently from leakage from the
.tanks before their removal, and remediation of the contaminated soil was
being performel under the direction of the oil company. The remedial
activities involved the in-situ process of vapor extraction. This
process withdraws soil, gas and vapor contaminants through extraction
V-20
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wells and treats the contamination on the surface. Ey this method,
subsurface contamination lite gasoline eventually volatilizes
underground, is renewed from the ground through the extraction wells,
and destroyed in a catalytic converter on the surface.
2. Environmental Oonoarns
Ihe shopping center itself presented little concern for
environmental liability. Air permits were necessary for the dry
cleaning establishment operating there. Ko other potential sources of
emissions were noted in the site inspection or further investigation.
The main source of environmental concern was from the known
contamination underlying the gas station site and from the procedures to
remediate this contamination. This situation was somewhat unique in
that reportedly, no contamination was detected at the time the
underground tanks were removed from the site. Since the contamination
was detected at a later, date, and because the site geology and
hydrogeolcgy essentially prevented any impact of the contamination on
local groundwater, there were no specific regulatory reporting
requirements for the discovery of the contamination. Therefore, the
site remediation was initiated without regulatory review.
3. Assessment
No potential environmental liabilities were identified in
relation to the shopping center site. Ihe remedial equipment being used
on the gas station site has been appropriately permitted and the
remediation results showed that progress was being Bade in the renewal
of contamination. Although the assessment indicated that no specific
reporting of the contamination was necessary, the lack of regulatory
concurrence with the remedial effort was considered a potential
liability. The remedial effort .would undoubtadly leave some level of
remaining contaminant in the ground, and without regulatory approval of
the cleanup level, there would remain some potential for additional
cleanup being required in the future.
V-21
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VI
SUMMMCf AND CCNCLDSICNS
-------
VI. SUMMARY MO CONCLDSION3
The Superfund Amendments and Reauthorization Act of 1986 (SARA)
provides relief to buyers of reed, property who did not cause or
contribute to hazardous waste contamination found on their property.
This relief is found in a legal clause, popularly termed as the
"innocent landowner defense". However, SARA. iinTogps conditions on the
use of this defense. One of the important conditions is that at the
time of acquiring the property the defendant mist have conducted an
"appropriate inquiry" into the environmental condition of the property
to ensure that it was free of hazardous substance contamination. SARA
provides little guidance as to how the term "appropriate inquiry" will
be interpreted.
Of obvious concern then, is what exactly constitutes "appropriate
inquiry"? Certainly missing from the statute is an explicit procedure
for assessing present environmental integrity. However, it would appear
that a thorough onsite inspection of the subject property is necessary
to a
-------
inaccurately, a "Property Audit". The purpose of most property transfer
assessments is to: 1) protect involved parties under the innocent
landowners defense; 2) provide that measure of due diligence necessary
to assist buyers, sellers or lenders in assessing their purchase or loan
risks; 3) comply with CSBCXA's requirements; and 4) allocate liability
anong the appropriate parties. Onus, most property assessments
represent a "reasonable1* effort to provide a professional opinion of the
associated environmental liabilities concerning a subject real estate
transaction. Few truly quantify, test, and confirm legal or regulatory
Environmental assessments are diverse, and seme-times raise ccnplex
problems of investigation, sampling, and analysis. However, our study
indicates that there are distinct and cannon elements to most
assessments. These elements provide a reasonable assurance that if a
site is contaminated with hazardous substances the contamination will be
detected, and its nature and extent win be determined. As this is the
crux of the "appropriate inquiry" issue, these elements may provide a
joey to interpreting the requirements of the law. A typical property
sessment scope of work could include:
s
an historical records investigation, to the extent
necessary to establish the history of the site and
nearby surrounding properties, and the potential for
hazardous waste problems arising out of prior site
use;
interviews with selected individuals knowledgeable
about the site to develop an understanding of past
and present site uses and history (e.g. facility
manager, site developer, car local planning
department officials) ;
a review of available permit and license xuourds,
and a review of enforcement actions brought against
past and previous owners or operators of the site;
a visual inspection of the property, including uhere
present and accessible: buildings and structures,
equipment that could reasonably be expected to
contain PCB's, chemicaVfoel/drum unloading and
storage areas, underground storage tanks, jxtcoess
VI-2
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tanks and equipment, catch basins, stressed
vegetation, water features, geologic features, waste
disposal areas, hazardous waste spill evidence, and
adjacent land use; and
a written report, including documentation of: site
ownership, location, description, and environmental
characterization; site history and description of
surrounding land uses; description of
environmentally sensitive receptors in the site
vicinity; a summary of relevant compliance issues,
references used, sumnary findings and opinions
regarding the potential presence of a significant
hazardous waste/petroleum hydrocarbon problem, and
inflations (if any).
The question of the degree of detail necessary to ensure that the
property transfer assessment is sufficiently thorough is difficult, The
thoroughness of an investigation can be affected by a number of
practical factors, including: 1) the quantity and quality of information
required by the involved parties in establishing their respective risks;
2) the relative costs associated with conducting an assessment in
relation to the size, complexity or diversity of the subject property
and its operations; and 3) the overall monetary value of the transaction
coupled with the time constraints placed upon the assessments in
relation to the closure of escrow, precluding lengthy assessment and/or
laboratory protocols; 4) time (closing schedule) and budget limitations;
and 5) risk profile and marketing objectives of the lender.
The merits of surface or subsurface drilling and sampling has often
been fHen.tea«3 in conjunction with property transfer assessments. One
need to spend larger suns of money to procure information on soil,
surfaot water, groundwater, and facility sampling results is typically a
function of the degree of detail rtlsnresort above, and varies according
to the perceived needs and level of sophistication required by the
concerned parties. As a matter of practice, most environmental
consulting firms conducting property transfer assessments offer a two
phased approach to this issue. (As this study shows, this is also the
approach recommended by various corporations, institutions, and states
for their assessment procedures.) A "Riase I" assessment provides the
VT-3
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basic background and document research, and site visitation required to
adequately assess the property. The Phase I can also be used as a
screening method to suggest or rmximiMid that further site sampling be
as a result of the site findings. Should further site work be
including, for example, surface or subsurface analytical
sampling, a Phase H assessment plan can be developed along site
specific lines.
No uniform protocol or procedure has been provided by governmental
agencies as to the rrf *"«•«» attributes of a property transfer
assessment. However, currently accepted industry standards provide
useful reference. Ihe literature review provided in Appendix l includes
some references that ^1°"*°* the property assessment process.
YE-4
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APPENDIX 1
HEAL ESTATE TOIIC LIABILITY BIBLIOGRAPHY
-------
REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Alexander, Beverly Z.
CERCLA 1980:1985: A research guide.
Ecology Law Quarterly. Vol. 13 (20) p. 311-360. 1986.
1986
A guide to published documents and other information designed to
help researchers understand the body of law that developed
during the first five years of CERCLA. In addition to
annotating and classifying commentarlee relating to the act, the
guide provides users with descriptive information about
looseleaf services, newsletters, organizations, associations and
databases.
no. 042
Anderson, Jonathan.
Trends in environmental regulation of real property.
Barrister. Vol. 15 (1) P. 53-56. Spring, 1988.
1988
Purchasers, sellers and lenders involved in real estate
transactions require knowledgeable and practical advice to guide
them through this complicated area of the law.
no. 021
Los Angeles Times.
Hazardous waste liability problem in real estate.
Los Angeles Times. Sec VII, p.l col 1, November 10, 1985.
1985
Discusses state and national trade groups' concerns with real
estate liability problems. Second in series concentrating on
hazardous wastes as they relate to real estate.
no. 060
Atkeson, Timothy; Goldberg, Seth.
Annotated legislative history of the superfund amendments and
reauthorization act of 1986 (SARA).
Environmental Law Reporter, Vol. 16 (12) p. 10360-10420. December,
A comprehensive guide to understanding the development of the
new Law and interpreting the significance of its provisions.
The paper is cross-referenced both to SARA and to detailed
comments on over forty topics .
no. 044
Atkineon, Steve.
Toxic hazards can be dangerous to a development's health.
Real Estate Review. Vol.16 (2). Summer 1986.
1986
Developers must balance the cost cf expensive tests for
contamination and the possibility of delays and expensive
clean-up costs. Two examples of new development rieke that
occurred in San Francisco are described.
PAGE 1 n°-
-------
REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Baker, Don.
Environmental investigations and cleanup solutions preceding real
estate transfers.
Industrial Development. Vol. 156 p. 12-15. Sept-Oct, 1987.
1967
no. 065
Baker, Don H.
Contemporary issues in real estate transactions involving
environmental concerns.
Industrial Development. Vol. 155 p.2-4. March-April, 1986.
1986
no. 070
Baldwin, Malcolm F.
Hazardous waste problems: implications for developers.
Urban Land, Vol. 44 p. 17-21. October 1985.
1985
Guidelines for minimizing potential liability of developers for
harm caused by hazardous wastes on their property.
no. 048
Barnee, David.
Enforcing property rights: Extending property rights theory to
congestible and environmental goods.
Boston College Environmental Affairs Law Review. Vol. 10 (3) p.
583-638. December - January, 1983.
1983
The model presented focuses on the private ownership dichotomy
as a foundation upon which to build a more comprehensive
analysis of property rights. The property rights model is used
to explore the institutional milieu in which the regulators and
the regulated interact.
no. 003
Bentz, James W.
Creditor's rights when federal bankruptcy lavs conflict with state
environmental agency enforcement powers after Hidlantic National
Bank.
University of Pittsburgh Law Review. Vol. 48 (3) p.879-903. Spring,
1987.
1987
This paper examines three cases which purport to rest on the
technical application of provisions of the Bankruptcy Code.
Read as a group, these cases lead to the conclusion that
environmental orders which prevent future harm to the
environment should be enforced as prohibitory police actions
over the claims of other business creditors. However, where the
environmental damage has already been done, subordinating the
claims of business creditors to a clean-up claim of the state is
an improper use of police power.
PAGE 2 no. 015
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Berz, David R; Spracker, Stanley M.
The inpact of Superfund on real estate transactions.
Probate and Property. Vol. 2 (2) p. 49-53. March-April, 1988.
1988
The "innocent landowner" amendment will significantly burden
parties contemplating real estate transactions by requiring
development and implementation of remedial work at a site prior
to closing. Purchasers and sellers increasingly will find
negotiations over proposed transactions focused on allocating
the very environmental risks from which this amendment seeks to
shield them. „,-
no. 019
Bleicher, Samuel A ; Stonelake, Benjamin G.
Caveat e«ptor: the impact of superfund and related laws on real
estate transactions. „„«„„„,. -,
Environmental Law Reporter. Vol. 14 (1) P. 10017-10024. January,
1984' 1984
The desire to avoid hidden liabilites has made hazardous waste
law required reading for prospective purchasers and security
holders of commerical real estate. The authors outline the
sources of landowner liability for hazardous waste pollution and
suggest steps that will help commerical real estate purchasers
avoid hazardous waste liability.
no. 018
Bourdeau, Karl S. «.4,.-_
Minimizing hazardous waste liabilitca in real estate transactions.
Construction Lawyer. Vol. 6 (4) p. 1-16. August, 1986.
This article focuses on transactions involving developed or
undeveloped real property which is not engaged in substantial
hazardous waste generation of disposal activities at the time of
the transaction but nonetheless may be the source of significant
environmental problems. The principles discussed in this
article are relevant to corporate a<=*ul6itlon* irivo1^*? **;**
or etock purchases or mergers of companies with manufacturing
operations that involve hazardous substances or generate or
otherwise handle chemical wastes.
PAGE 3
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Brenner, Lynn.
Law firm predicts all banks will review environmental ricks.
American Banker. Vol. 153 (201) p. 16-. Oct. 13, 1988.
1988
An environmental review should be part of the bank's general
operating policy, because these potential liabilities exist in
all types of loans. Cole A Dietz has created a task force of
litigation, real estate, and environmental lawyers to advise
client banks on protecting themselves from hidden liabilities
when extending loans.
no. 036
California Seal Estate Indicators.
Toxic wastes in real estate.
California Real Estate Indicators. Summer 1987.
1987
The commmercial real estate market is abuzz with discussion and
concern over toxic wastes. Brief review of the laws, their
implications and proper responses.
770. 005
Cronin, Philip M; Fieldsteel, John W.
When does environmental regulation of private property become a
taking and require compensation.
Massachusetts Law Review. Vol. 70 (2) p. 72-81. June, 1985.
1985
The general rule is that while property may be regulated to a
certain extent, if regulation goes too far it will be recognized
as a taking. The general trend so far has been to uphold
environmental laws and regulations against challenges that they
were unconstitutional takings. In upholding them, neither the
Supreme Judicial Court, nor the Appeals Court has formulated
definitive standards to determine the validity of environmental
laws.
no. 020
Dybdahl, David; Runes, Thomas P
Limiting the liability; risk managers learn to curb possible
environmental risks.
Business Insurance. Vol. 17 p. 23-25. Sept. 12, 1983.
1983
no. 071
PAGE 4
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Evans, William D.
Superfund: Locating the liability land Bines.
Tenneesee Bar Journal. pl3-18. March-April 1988.
1968
This article outlines the baeic liability scheme of CEBCLA.
After briefly discussing the statutory scheme, it focuses on
three major liability themes: (1) strict liability, (2) .joint
and several liability, and (3) contribution. Relevant Tennessee
cases are noted.
no. 032
Fitzgerald, Kate.
Superfund can pose super liabilities for lenders: minimizing the
risks of toxic waste is the best defense.
Savings Institutions. Vol. 108 (7). July, 1987.
1987
no. 049
Fitzsimmons, Mark P; Sherwood, Jeffrey K.
Real estate lawyer's primer (and more) to Superfund: the
environmental hazards of real estate transactions.
Real Property, Probate and Trust Journal. Vol. 22 (4) p.765-790.
Winter, 1987.
1987
Superfund liability can be visited on an unsuspecting owner of
property on which wastes have been dumped or toxins have been
released, even if the owner was totally innocent of wrongdoing
and derived no benefit from prior, improper use of the property.
This article explores the issues a purchaser should consider
before consummating a transaction and protective measures and
appropriate responses if contamination is discovered.
no. 014
Fleischaker, Marc; Mitchell, Donald.
Insecurities of security interests in hazardous waste cases.
National Law Journal. Vol. 9 (1) p. 18-21. September 15, 1986.
1986
The issue of lender liability brought to bear in U.S. v.
Maryland Bank and Trust is discussed. The case exposes banks and
other real estate lenders to significant liabilities beyond the
value of the loan or the security property.
no. 045
PAGE 5
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Forde, John .
Survey finds banks lax on environ»ental policy.
American Banker. Vol. 153 (105) P.17. May 31, 1988.
looo
Moot commercial lenders have not set a lira policy on assessing
the environmental risk of a loan while making credit decisions,
according to a recently released survey sponsored by Robert
Morris Associates, Philadelphia. Of those responding banks that
have already suffered loan losses for environmental reasons, 69X
do not now require environmental audits on loans.
no. 037
Forte, Joseph Phillip.
A lender's guide to environmental liability risk management.
Mortgage Banking. Vol. 47 (8) May 1987 .
Real estate professionals-developers, owners and lenders alike
have suddenly become aware of their potential exposure to
liability for toxic waste. It is apparent that the risk to the
lender is greater than the mere impairment of loan collateral
occasioned by the non-compliance with ordinary land use
statutes. Establishing a staged due diligence program will
cause delays in underwriting and cancellations of closing for
transactions. But as lenders in the marketplace adopt similar
programs, borrowers will have no alternative but to accept the
developing environmental audit procedure as a cost of doing
business. „_,_
no. 002
Freed, Martin J.
Superliens: mortgage banker's new headache.
American Banker. Vol. 151 (215) p. 4. October 30, 1986.
1986
The appearance of the superlien is a clear signal: As
environmental regulation intensifies, considerations of whether
or not a site is free of toxic substances and free of conditions
which might lead to toxic contamination increasingly will have
to be taken into account in real estate development. The
liability for the release of toxic substances under Superfund
statutes can be so substantial and, if accompanied by a
superlien provision, so unavoidable- that developers can no
longer afford to ignore its impact on their business.
no. 040
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Froet, Edmund B..
Strict liability as an incentive for cleanup of contaminated
property.
Houeton Law Review. Vol. 25 (4) p. 951-962. July, 1988.
1988
Experience is proving that strict liability under CERCLA and
RCRA provides a strong incentive for owners and operators to
clean up their industrial facilities. However, the
effectiveness of this incentive is curtailed by the inclination
of owners to overlook hazardous-substance issues when there ie
no apparent danger of an enforcement action or litigation and by
their inability to undertake voluntary cleanup when there are no
available standards or guidelines to indicate what cleanup
actions should be taken.
no. 026
Glass, Elizabeth Ann.
The aodern snake in tbe grass: An examination of real estate &
commercial liability under Superfund & Sara and suggested guidelines
for the practitioner.
Boston College Environmental Affairs Law Review. 14 (3) Spring, 1987
1987
This article begins with an overview of CERCLA. Following this
overview, the discussion focuses on the twin problems of
purchaser and seller liability under both CERCLA and the
Superfund Amendments and Reauthorizatlon Act of 1986 (SARA).
Suggestions are made for counseling and representing the client
who is involved in a real estate or commerial transaction and
wishes to avoid Superfund liability. The article concludes that
in searching for deep pockets to cover the cost of the cleanup
program, courts have interpreted liability under the Act to an
extreme not evidenced in the legislative history of the Act.
no. 010
Hingerty, Michael B.
Property Owner Liability for environ»ental contamination in
California.
University of San Francisco Law Review. Vol. 22 (1) P. 31-87. Fall,
1967.
1987
This article provides a survey of the laws applicable to real
property owner liability for environmental contamination in
California and examines in particular detail the statutory
provisions that may furnish the property owner with come
opportunities for relief from this liability.
no. 028
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Hooper, Carl.
Business and property owners' complain of increased liability from
hazardous materials.
Houston Post. Sec E, p.l col 3. April 26, 1967.
1987
no. 059
Hoskins, Janes C.
Environmental considerations in the disposal or acquisition of
corporate real estate.
Industrial Development. Vol. 156 p. 1-7. Nov-Dec. 1987.
1987
no. 064
Houlehan, Donald A; Parish, Gary E.
Hazardous waste regulation: Issues for the real estate
practitioner.
Colorado Lawyer 13 (1) p. 48-52 Jan. 1984.
1984
The general or real estate practitioner is the lawyer who may
first receive the inquiries or see the symptoms of an
environmental law problem. This article provides some
background for recognizing these symptoms.
no. 013
Howard, Jeffrey H; Benfield, Linda E.
Innocent land -ownership.
Real estate Today. Vol. 21 (6). Aug. 1988.
1988
no. 053
Jones, Stephen C.
Toxic contamination and liability: precautionary action and
post-discovery alternatives.
Industrial Development. Vol. 156 p. 4-8. July-August, 1987.
1987
no. 066
Kaplan, Lawrence E.
Site Selection Handbook.
Site Selection Handbook. Vol.. 23 p. 111-119- Feb. 1988.
1988
A compendium of hazardous substance laws and issues involving
real estate amendments to environmental laws have expanded the
pool of parties which can be pursued for costs of damages and
cleanup to include the property owner, seller, broker, mortgage
holder, tenants and contractors.
no. 047
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Impact of state "superlien" statutes on real estate transactions .
Virginia Journal Natural Resources Law. Vol. 5 (2) p. 297-323.
Spring, 19B6. 1986
The impact of state super lien statutes on real estate
transactions is discussed. Cases interpreting these laws are
surveyed and implications are considered for real estate
purchasers, title insurers and lenders.
transaction: a practical and
the technical «™^'«^^* ;«
business person, investor or anyone invoved in buying and selling
EPA^anagment of Uncontrolled Hazardous Waste Sites National
Symposium, November 29, 1982. p. 474-478. 1982.
Sources of liability are identified, role of the environmental
professional is discussed. Several case histories are
summarized representing orders of magnitude difference in
liability value of transaction and cost of investigation.^
Levitas, Elliott H; Hughes, John V.
Hazardous waste issues in real estate iq87
Mercer Law Review. Vol. 38 (2) p. 581-641. Winter 1987.
This article focuses on hazardous waste, because
ssaraSti-'S :l:s.rTSSi?ss2 ss :
sssss sjas^ss - - ="^S
practitioners may use to identify, address, and resolve
environmental problems. Finally, the author Provides a
practical context for the ensuing discussion of hazardous waste
issues in real estate transactions.
Madden, Heal.
Environmental law dictates due in*"1^; y . 4 (2) Mar_Apr
Outlook of the Federal Home Loan Bank Systems. Vol. 4 (Z) nar Apr.
1988. 1988
Potential for losses from litigation tr
substances adde another layer of COBpJe"^r^m^^1
ownership and financing. Ignorance of environmental
consideration is no defense.
PAGE 9
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Malamut, John.
Compromise development: bridging the gap between development and
preservation.
Urban Land. Vol. 46 (3). Karch, 1987.
1987
no. 054
Marcotte, Paul.
Real Property
American Bar Aeeociation Journal. Vol. 73 p. 66-70. Nov. 1987.
1987
The Superfund law will pose increasing problems for property
owners in the years ahead. Hazardous waste has become as much a
concern in a real estate deal as who has proper title. A final
question is whether there will be stricter standards in the
years ahead
no. 031
Merklein, Ernest.
The hidden liabilities of industrial park developers from
environmental claims.
Development. Vol. 18, (4) Dec. 1987.
1987
Hidden liabilities may be in store for industrial park
developers, managers and partners as the result of industial
park users' past and current operations. Several claims filed
serve as warnings for industrial park developers to become 'risk
cautious".
no. 006
Moore, Teresa.
State Environmental Law Preempts Bankruptcy Code?
Rutgers Law Journal 38 (4) 843-865 Summer, 1986 .
1986
Quanta signals a shift on the Court since its decision in Ohio v
Kovacs a year earlier toward increased recognition of the
importance of effective regulation of the hazardous waste
industry. Whether the court will apply Quanta and future
statutory enactments to uphold efforts to impose liability on
those who cause environmental damage remains to be seen. This
decision begins to recognize, however imperfectly, the enormous
consequences of the build up of improperly handled hazardous
wastes and uphold valid environmental protection interest at the
expense of restricting, in part, long established federal
interests.
no. 008
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Morrie, Jennele M.
CoBt of ignorance: assessing liability for potential environmental
hazards in real estate transactions.
Arizona Bar Journal. Vol. 24 (1) p. 12-18. June-July, 1988.
1988
A seminar was co-sponsored by the Environmental and Natural
Resources Law Section and the Continuing Legal Education
Division of the State Bar on March 11, 1988. For those unable
to attend, this article provides a brief overview of some the
major environmental laws affecting real estate transactions.
no. 027
Moscowitz, Joel S; Hoyt, Scott R.
Enforcement of CERCLA against innocent owners of property.
(Symposium: Environmental Litigation and Enforcement)
Loyola of LOB Angeles Law Review. Vol. 19 (4) p.1171-1188. June
1986.
1966
It is the thesis of this Article that expressions of judicial
symphathy with the public need and good motivation have
stretched the hazy language of CERCLA paet the breaking point.
In the process, the courts have disregarded traditional notions
of fairness in forcing those admittedly innocent of any
polluting activites to pay for extravagant cleanup costs.
no. 017
Moskowitz, Joel.
Hazardous waste and real estate transactions.
Los Angeles Lawyer. Vol. 9 (10). Jan. 1987.
1987
Today, environmental law has not only evolved and matured into a
specialty as distinct and as arcane as taxation, it has sent
tendrils into neighboring fields. Real estates litigation is
now dominated by issues stemming from the growing development of
historically industrial lands for new residential and industrial
uses. In this fast-changing field, if the substantive
principles outlined here are obsolete tomorrow, at least those
structuring real estate transactions may have a feel for when
they should turn to practitioners of this newest of specialties.
no. Oil
Moskowitz, Joel S.
Environmental liability and real property transactions: law and
practice.
Wiley. ISBN 0-471-61390-8, 1989.
1989
no. 062
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Newman, Joseph.
Bank Groups want cleanup bill altered.
American Banker. Vol. 152 (223) p. 28. November 13, 1987.
1987
Pennsylvania's bank and thrift trade groups are lobbying
legislators to eliminate a "superlien" provision from Gov.
Robert Casey's proposed hazardous waste cleanup bill.
Connerical banking and thrift groups also worry that financial
institutions could be "deemed" responsible for hazardous site
cleanup costs merely by virture of the close financial
relationship they have with their business borrowers."
no. 038
Newman, Joseph.
Be realistic about risk in industrial lending: environmental lawyer
advises banks on deals involving hazardous materials.
American Banker. Vol. 151 (255) P. 16. December 30, 1986.
1986
David G. Mandelbaum is one of a growing number of "environmental
lawyers" who deal with banks and others worried about costly
suite for cleanup funds when they foreclose on a contaminated
property. Mr. Mandelbaum summed up hie advice this way: Lenders
should avoid the temptation of maximizing environmental risks
and instead should optimize protection against them.
no. 039
Nucclarone, A. Patrick.
Impact of environmental regulations on business transactions, 1987:
real property transfers and mergers and acquisitions, (book)
Practising Law Institute. ISBN 0-317-60062-1.
1987
no. 061
O'Connell, T.
Checking out hidden hazards to land uses.
California Builder. Vol. 56 (2). April-May, 1988.
1988
no. 055
O'Connell, T.
Saving projects from contamination scourge.
California Builder. Vol. 56 (1). Feb-«arch, 1988.
1986
no. 056
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
O'Shaughnessy, Michael L.
Bankruptcy trustee's abandonment of burdensome estate property and
state environmental protection laws: Midlantic National Bank v. Hen
Jersey Department of Environmental Protection.
University of-Cincinnati Law Review. Vol. 55 (3) p. 853-871. Winter,
1987.
1987
The narrowing of the Court's rule to protect the public health
and safety avoids giving too much discretion to the lower courts
in considering a bankruptcy trustee's desire to abandon
burdensome property. The Court's lack of specificity as to Just
what conditions such lower courts can impose on abandonment
suggest the need for a more deliberate consideration of the
issue by Congress.
no. 016
Olin, Harold B.
Hazards ahead: lenders are running in CERCLA's over the potential
liabilities of hazardous waste.
Secondary Mortgage Markets. Vol. 4 (2). Summer, 1987.
1987
no. 050
Perry, Charles.
Superfund amendments- a new beginning.
Industrial Development. Vol. 156 p. 4-8. Jan-Feb, 1987,
1987
770. 067
Pilko, George; Green, Fred.
Avoiding hazardous waste pitfalls in real estate transactions.
Industrial Development. Vol. 156 p. 7-10. Nov-Dec. 1987.
1987
DO. 063
Portelli, David J.
SARA slam* the door: the effect of Superfund amendments on
foreclosing mortagees.
Wayne Law Review. Vol. 34 p. 223-244. Fall, 1987.
1987
CERCLA's approach gave foreclosing mortagees a legitimate
defense to liability by exempting persons holding security
interests if they met several rigorous conditions. SARA
effectively eliminates that defense by harshly and overbroadly
defining "contractual relationship." As a result, SARA will
breed litigation. Moreover, SARA virtually abandons the
principle that the hazardous waste polluter should pay for his
misdeeds. ___
no. 030
PAGE 13
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Purviance, Ken.
The hazardous waste abatement liability of innocent landowners: A
constitutional analysis.
Pacific Law Journal. Vol. 17 (1) p. 185-211. Oct. 1985.
1985
The author contends that charging innocent landowners with
hazardous waste abatement cost also runs counter to provisions
of the Dnited States Constitution, which provide that private
property cannot be taken for a public use without just
compensation, and that no one nay be deprived of property
without due process of the law. This author will examine the
extent to which cost can be imposed upon individuals under the
police powers of the state to act in furtherance of public
health, safety, of welfare.
no. 009
Quentel, Patricia L.
Liability of financial institutions for hazardous waste cleanup
costs under CERCLA.
Wisconsin Law Review, p. 139-185. 1988.
1988
This comment examinee the expansion of CERCLA liability to
include lenders that take security interest in property as
collateral for loans and it makes some general predictions about
lender liability in the future. It suggests some precautions
that lenders can take to protect themselves from liability for
hazadous waste cleanup costs.
no. 029
Rashby, Carolyn.
Lender liability under CERCLA: United States v. Maryland Bank and
Trust Co.
Ecology Law Journal. Vol. 14 p. 569-592. 1987.
1987
The district court's decision in Maryland Bank & Trust opens up
a new area of liability under CERCLA - mortgagee that foreclose
on and purchase contaminated sites probably will be held liable
as owners under CERCLA for cost of cleaning the sites.
no. 033
Rawlings, John T.
Bankrupt's obligation to remove toxic waste constitutes a "claim":
Ohio v. William Lee Kovacs Enterprises.
Washington University Journal of Urban and Contemporary Law. Vol.
32. 1987.
1987
no. 051
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Shanker, Morris G.
A bankruptcy Superfund for some super creditors; fro» Ohio to
Midlantic and beyond.
American Bankruptcy Law Journal. Vol 61 p. 185-194. Spring, 1987.
1987
The Midlantic and Kovacs decisions raise the narrow policy
question on how the cost of eliminating environmental hazards
are handled in bankruptcy.
no. 034
Slutsky, David.
Lenders' strategies for environmental liability
Mortgage Banking. Vol 47 (10) p65 - 72. July 1987.
1987
As lenders recognize the value of pre-screening loans prior to
funding and prior to foreclosure, they will also develop
effective strategies for the continuous monitoring of sites,
thus keeping up the pressure on the polluters. This cooperation
between public sector regulation and private sector enforcement
will hopefully be embraced by the lending community in the
coming years as perhaps the best solution to a serious problem.
no. 001
Stokes, James. .
Legal aspects of real estate transactions involving environmental
Industrial Development. Vol. 155 p. 10-15. Sept-Oct, 1986.
770. 069
Tasher, Steven; Dean, John; Oster, Steve.
Environmental Laws and Real Estate Handbook.
Government Institutes, Inc. Rockville, MD ISBN 0-86598-729-7.
This handbook reviews all the major federal environmental laws.
It also includes a national survey of pending state
environmental legislation that affects real estate transactions.
Creditorsrare leery of liability for toxic waste cleanup costs.
American Banker. Vol. 152 (179) p. 9. September 14, 1987.
Banks are leery about taking titles to properties containing
hazardous wastes because they may be liable for clcanup °0**8.. ft
under federal law. Even federal bank regulators are feeling the
threat- no. 041
PAGE 15
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REAL ESTATE TOXIC LIABILITY - BIBLIOGRAPHY - 17 OCT. 1988
Van Lieshout, John M.
Breaking the bank.
Real Estate Review. Vol. 16 P 51-56. Fall, 1986.
1986
no. 068
Vollman, Alan P.
Double Jeopardy: lender liability under Superfund
Real Eetate Law Journal. Vol.16 p.3-19. Sunmer 1987.
1987
Real estate lender liability for the cost of cleaning up
hazardous waste on the property are described. Article analyzes
recent anendnents to CERCLA and liability under state
environnental laws.
no. 035
Nail Street Journal.
Cleanup for toxic wastes falling on firus.
Wall Street Journal, p.29 col. 1, March 9, 1988.
1988
More and more, states are thrusting cleanup responsibilites for
toxic wastes on firms that own, buy or sell industrial property
and the laws are slowing the closing of some deals. Hew Jersey
was the first state to crack down on companies.
no. 058
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