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Bona Fide Prospective Purchaser

In 2002, Congress passed the “Small Business Liability Relief and Brownfields Revitalization Act” (Brownfields Amendments). Included in the Act, was the creation of a new landowner liability protection from CERCLA for Bona Fide Prospective Purchasers (“BFPP”). Since the enactment of the Brownfields Amendments, prospective landowners could now purchase property with knowledge of contamination and obtain protection from liability, provided they meet certain pre- and post-purchase requirements.

In March of 2003, the EPA published Guidelines for Landowners to be able to be identified as Bona Fide Prospective Purchasers, contiguous property owners or innocent landowners. These were sent in a memorandum to all ten EPA regions.

To qualify as a BFPP, a person must: (1) not be potentially liable for contamination on or at a property; (2) acquire the property after January 11, 2002; (3) establish that all disposal of hazardous substances occurred before the person acquired the facility; (4) make all appropriate inquiries into previous ownership and uses of the property prior to acquiring the property; and (5) not be affiliated with a party responsible for any contamination.

In addition, after purchasing a property, to maintain BFPP status, landowners must comply with “continuing obligations” during their property ownership. These are to: (1) provide all legally required notices with respect to the discovery or release of a hazardous substance; (2) exercise appropriate care with respect to the hazardous substances by taking reasonable steps to stop, or prevent, continuing or threatened future releases and exposures, and prevent or limit human and environmental exposure to previous releases; (3) provide full cooperation, assistance, and access to persons authorized to conduct response actions or natural resource restoration; (4) comply with land use restrictions and not impede the effectiveness of institutional controls; and (5) comply with information requests and subpoenas.

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