Tenant’s New Defense to Hazardous Substance Liability

Buried in the omnibus spending bill signed earlier this year were amendments to the Superfund law that for the first time make clear that tenants can qualify as bona fide prospective purchasers, protected from cleanup costs from the presence of hazardous substances on a property. The Consolidated Appropriations Act signed on March 23, 2018 included in Division N, the ‘‘Brownfields Utilization, Investment, and Local Development Act of 2018’’ (the BUILD Act). The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA, commonly referred to as Superfund), 42 U.S.C. § 9601 et seq., provides an important liability protection, including from cleanup costs, for parties who qualify as bona fide prospective purchasers (BFPPs). The potential applicability of the BFPP protection for a tenant who leases contaminated or formerly contaminated real estate and improvements has been the subject of debate for the decades since the…

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