National Real Estate Exam (PSI)Land Use Controls and RegulationsMedium
A buyer purchases a commercial property and later discovers soil contamination caused entirely by a dry-cleaning business that operated on the site decades before the buyer's ownership. Under federal environmental law, who can be held liable for cleanup costs?
- ANo one, because the contamination occurred before the current owner's purchase
- BOnly the local government, since it issued the original business license
- CThe current owner, potentially along with prior owners, under strict and joint liability
- DOnly the original polluter, since the buyer did not cause the contamination
Show answer & explanationAnswer & explanation
Correct answer: C. The current owner, potentially along with prior owners, under strict and joint liability
Under CERCLA (the federal Superfund law), current property owners can be held strictly, jointly, and severally liable for cleanup costs regardless of who caused the contamination, unless they qualify for a specific defense such as innocent landowner status.
Why the other options are wrong
- A. Ownership at the time of discovery does not exempt an owner from liability under CERCLA.
- B. Issuing a business license does not create environmental cleanup liability for a government.
- D. CERCLA liability extends beyond the original polluter to current owners as well.
CERCLA (Superfund) Liability
Federal law imposing strict, joint, and several liability for hazardous substance cleanup on current owners, past owners, and operators, regardless of fault.
- Liability is strict—no need to prove negligence
- Current owners can be liable even if they didn't cause contamination
- Innocent landowner defense may apply with proper due diligence (Phase I ESA)
Memory trick: CERCLA: 'Current owners can't escape liability, always.'