Environmental liability for contaminated property can attach to a current owner regardless of fault. Statutory defences depend on having conducted appropriate inquiry before acquisition.
All appropriate inquiries. The bona fide prospective purchaser, innocent landowner and contiguous property owner defences all require inquiry meeting a defined standard before purchase, which in practice means a Phase I assessment performed to the recognised industry standard by a qualified environmental professional.
Phase I is a records and site reconnaissance review: historical use, aerial photographs, regulatory databases, interviews and a walkthrough. It identifies recognised environmental conditions.
Shelf life. Components of a Phase I go stale within stated periods, and the report must be current as of acquisition or updated. A report obtained a year earlier for a different buyer generally will not support the defence.
Phase II is sampling, undertaken when the Phase I identifies conditions warranting it. Sellers often resist because results become reportable; access agreements should address that in advance.
Continuing obligations. The defences require ongoing compliance — appropriate care with respect to contamination, cooperation with responders, compliance with land use restrictions. A buyer that establishes the defence and then ignores it loses it.
State programmes including baseline environmental assessments and brownfield incentives operate alongside the federal scheme and can materially change the economics.