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 work Agreements and Prospective Lessee Work Agreements
- Bona Fide Prospective Purchaser Work Agreement
- Contiguous Property Owner Assurance Letters and Settlement Agreements
- Windfall Lien Resolution Agreements
Comfort/Status Letters
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 Work Agreements and Prospective Lessee Work Agreements
A prospective purchaser agreement (PPA) or prospective lessee agreement (PLA) is the primary settlement tool to address the liability concerns of a prospective purchaser or other third party who wants to clean up and reuse a site of federal interest. The model agreement issued on August 10, 2022 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. The model is available from the PPAs/BFPPAs category of the Cleanup Enforcement Model Language and Sample Documents Database.
Bona Fide Prospective Purchaser Work Agreements
A bona fide prospective purchaser (BFPP) agreement (BFPPA) or bona fide prospective lessee (BFPL) agreement (BFPLA) may be used to facilitate cleanup and reuse of a site of federal interest in limited circumstances where appropriate (e.g., where the BFPP already owns the property). Similar to a PPA, these agreements provide 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.
Learn more: