EPA Ups Enforcement: Do You Know Your Environmental Liability?

With the Environmental Protection Agency stepping up fines and enforcement actions, the importance of performing due diligence is more important than ever for purchasers, lenders, CEOs, and other business people. In 2015 alone, Environmental Protection Agency (EPA) enforcement actions resulted in $404 million in penalties and criminal fines, $4 billion in court-ordered environmental projects, and 129 combined years of incarceration.

Even if they’re eco-friendly, homebuyers and business purchasers could inherit the seller’s environmental violations—and the liability for those violations. Here’s how:

Under state and federal environmental laws, the purchaser may be held jointly or completely liable for cleanup costs, damages, and other environmental response costs related to real property they have acquired. Average cost of cleanup for sites the EPA deems contaminated is $26 million.

Real property acquired may decline significantly in value or become worthless due to environmental problems.

According to the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA), which has been amended numerous times, property owners and operators may be held liable for the release of hazardous substances like asbestos even if it occurred before they acquired the property.

By performing due diligence prior to acquisition, the purchaser may properly structure the transaction to avoid certain costs and liabilities.

All American Document Services is a public records research company that provides exhaustive Universal Commercial Code (UCC) searches, Revised Article 9 (RA9) compliant searches, and searches at county recorder offices for Environmental Protection Agency (EPA) liens. Our accurate investigation, rapid turnaround time, and paperless delivery have helped to expedite thousands of real estate transactions since 2002. Visit our homepage today.