New York Real Estate Salesperson ExaminationProperty Condition and DisclosuresHard
A New York real estate salesperson is showing a commercial property, a former dry cleaning establishment. The buyer's environmental engineer reports finding perchloroethylene (PCE) contamination in the soil and groundwater. The seller claims they were unaware of the contamination as they purchased the property 'as-is' years ago. Under CERCLA (Superfund) and New York's 'Brownfield' program, what is the most likely implication for the current owner?
- AOnly the original dry cleaning operator, who caused the contamination, is liable for cleanup.
- BThe New York Department of Environmental Conservation (DEC) will fully fund and manage the cleanup without owner involvement.
- CThe seller, as the current owner, may be held liable for cleanup costs regardless of fault or 'as-is' purchase.
- DThe seller is exempt from liability due to the 'as-is' clause and lack of prior knowledge.
Show answer & explanationAnswer & explanation
Correct answer: C. The seller, as the current owner, may be held liable for cleanup costs regardless of fault or 'as-is' purchase.
CERCLA imposes strict, joint and several, and retroactive liability on current owners, even if they didn't cause the contamination or bought 'as-is.' New York's Brownfield program aims to incentivize cleanup but doesn't negate the underlying CERCLA liability for existing contamination.
Why the other options are wrong
- A. While the original operator is also liable, CERCLA's joint and several liability means multiple parties can be held responsible, including the current owner.
- B. While the DEC oversees cleanups and Brownfield programs offer incentives, the owner typically bears primary responsibility for costs, or shares it, not that the state fully funds it without owner involvement.
- D. The 'as-is' clause typically relates to property condition, not environmental liability under CERCLA, which is strict liability.
CERCLA (Superfund)
Comprehensive Environmental Response, Compensation, and Liability Act (1980), federal law establishing liability for hazardous substance releases and creating a trust fund for cleanup.
- Strict liability: no need to prove fault.
- Joint and several liability: any responsible party can be held liable for entire cost.
- Retroactive liability: applies to past actions.
- Applies to current owners, past owners, generators, transporters.
Memory trick: CERCLA's 'Strict, Joint, Retroactive' net catches all, even if you bought it, fault or not, you fall!