Tools to Address Liability Concerns to Support Cleanup and Reuse
EPA's cleanup enforcement office develops policy and guidance documents and site-specific tools that address landowner liability concerns so that protective cleanup and reuse can take place at contaminated properties. Specifically, EPA developed enforcement discretion guidance that clarify potential liability and provide certainty and comfort to parties seeking to redevelop contaminated sites so that EPA is not involved in every contaminated property transaction.
EPA also developed site-specific tools to facilitate contaminated site transactions when perceived liability remains an obstacle and EPA involvement is critical.
These tools and guidance can be found on the Addressing Liability Concerns to Support Cleanup and Reuse of Contaminated Lands policy and guidance database or summarized in the Revitalization Handbook.
Enforcement tools to address landowner liability concerns include:
- Comfort/Status Letters
- Prospective Purchaser Agreements and Prospective Lessee Agreements
- Bona Fide Prospective Purchaser Work Agreement
- Contiguous Property Owner Assurance Letters and Settlement Agreements
- Windfall Lien Resolution Agreements
The Agency provides comfort/status letters to respond to requests about property where the letter may aid in its return to productive reuse. For example, some properties may still be unused or underutilized because potential owners, developers, or lenders are unsure of the properties' environmental status.
Through comfort/status letters, EPA tries to support potential reuse by conveying the information it has about the property, how EPA has responded or plans to respond to environmental conditions, and whether a statutory or policy provisions may be relevant, such as the bona fide prospective purchaser (BFPP) provision.
A comfort/status letter may:
- Clarify EPA’s involvement at a property;
- Describe the federal cleanup progress at a site;
- Discuss the statutory provision or EPA policy (e.g., BFPP provision, windfall lien policy) that may apply to the requestor or property; and/or
- Suggest reasonable steps the requestor or another party should take to protect the integrity of the cleanup and/or fulfill the criteria of the statutory provision or EPA policy.
Additional information on model comfort/status letters is available from the comfort letters category of the Superfund cleanup policy and guidance database.
The Agency's model comfort/status letters are available for download from the Cleanup Enforcement Model Language and Sample Documents database in the comfort/status letter category.
Prospective Purchaser Agreements and Prospective Lessee Agreements
EPA and DOJ use prospective purchaser agreements (PPAs) or prospective lessee agreements (PLAs) to address the liability concerns of third parties who want to cleanup and reuse contaminated properties. Even after the addition of the BFPP provision, EPA and DOJ recognized that a PPA or other third-party agreement with the federal government may be appropriate at some sites of federal interest, e.g., sites on the NPL, to address liability concerns to foster cleanup and reuse. See Agreements with Third Parties to Support Cleanup and Reuse at Sites on the Superfund National Priorities List (April 17, 2018). The model agreement provides a covenant not to sue and contribution protection in exchange for the party's performance of cleanup work and reimbursement of certain EPA cleanup costs.
Bona Fide Prospective Purchaser Work Agreements
Bona fide prospective purchasers (BFPPs) may want to perform cleanup work at a contaminated site beyond what would be expected of them to maintain their BFPP statutory liability protection.
To address potential liability concerns at these sites, EPA and the Department of Justice (DOJ) issued a CERCLA Model Agreement and Order on Consent for Removal Action by a Bona Fide Prospective Purchaser for use at sites of federal interest where the BFPP wishes to perform some cleanup work. The model agreement provides a covenant not to sue and contribution protection in exchange for the BFPP’s performance of cleanup work and reimbursement of EPA’s oversight costs.
Contiguous Property Owner (CPO) Assurance Letters and Settlement Agreement
Although CERCLA protects contiguous property owners (CPOs) from landowner liability, some landowners continue to have concerns about their liability, especially where EPA has conducted a response action on the neighboring contaminated property or on the CPO’s property.
While the CPO provisions are self-implementing, Congress authorized EPA, in its discretion, to offer assurance that no enforcement action will be brought against a CPO for contamination resulting as a cause of their neighbors’ actions. Congress also authorized EPA to enter into a settlement agreement with the CPO, providing them with cost recovery and/or contribution protection from potentially responsible parties at the site.
Guidance on the appropriateness of an assurance letter or an agreement is found in EPA's Interim Enforcement Discretion Guidance Regarding Contiguous Property Owners (1/13/2004).
EPA also developed a Model CERCLA Section 107(q)(3) Contiguous Property Owner Assurance Letter (11/11/2009).
Windfall Lien Resolution Agreements
After cleanup work at a site is completed, EPA may place a "windfall lien" on the BFPP's property. The windfall lien equals the lesser of either: (1) the amount of the unrecovered cleanup costs incurred by EPA, or (2) the increase in fair market value at the property attributable to the Superfund cleanup.
Windfall liens arise only where there is federal involvement at a site. At the vast majority of contaminated sites, there is no federal involvement and, therefore, no windfall lien.
EPA's model windfall lien resolution document is used where EPA is likely to pursue a windfall lien and a BFPP wants to resolve any existing or potential windfall lien. The model document is available on the Agency's website as Attachment B to the Interim Enforcement Discretion Policy Concerning "Windfall Liens" Under Section 107(r) of CERCLA.