Section Seven
LAWS, REGULATIONS, AND TRAINING
92    RECENT TRENDS IN ENVIRONMENTAL LEGISLATION
AFFECTING INDUSTRIAL PROPERTY TRANSFERS
Elizabeth M. Donley, Executive Director
The Environmental Liability Report
John W. Donley, President
Donley Environmental Management, Inc.
Stafford, Virginia 22554
INTRODUCTION
In 1980, Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), more commonly known as Superfund. Superfund gave the federal government
broad authority to respond directly to a release, or threatened release, of hazardous substances that
might endanger public health or the environment. The passage of Superfund was the beginning of
environmental legislation affecting industrial property transfers.
CERCLA enables the federal government to compel those responsible for the contamination of a
site to clean it up at their own expense. Alternatively, the government can clean up the site using the
"Superfund", then recover the cleanup cost from the responsible parties.
Under CERCLA, an owner, operator, tenant, or off-site contributor may be held liable for cleanup
costs. In addition to the person or company who actually caused the contamination, potentially
responsible parties may include the present owner or others in the chain of ownership, even if not
directly responsible for the contamination.
The courts are also expanding the definition further to hold interim owners, such as trustees, liable
for cleanup costs. In a recent decision, the Fifth Circuit Court (Tanglewood East Homeowners v.
Charles-Thomas, Inc., #87-6097, 849 F.2d 1568, July 28, 1988) decreed that a lending institution,
developer, construction company, and realtor are all potentially responsible parties under CERCLA.
The court ruled that they may be held liable under CERCLA even though the site was contaminated
prior to construction. In this case, grading and filling of pre-existing contamination on a site was
construed as treatment and disposal.
THE BEGINNING OF STATE ENVIRONMENTAL CLEANUP LAWS
In 1983, the state legislature in New Jersey reacted to the problem of the transfer of contaminated
properties by enacting the Environmental Cleanup Responsibility Act (ECRA). The ECRA statute
was the beginning of a trend in state environmental cleanup laws.
The purpose of ECRA is to have those persons responsible for creating the problems also responsible for resolving them, prior to the sale of the property. To accomplish this goal, ECRA imposes
preconditions on the sale, transfer, or closure of industrial property involved with hazardous substances or wastes. It requires:
• approval by the New Jersey Department of Environmental Protection (DEP) of a negative
declaration that there have been no discharge(s) of hazardous substances or wastes on the property or that any such discharge(s) were cleaned up;
• the execution of an approved cleanup plan detailing the measures necessary to detoxify and
restore contaminated property; or
• the execution of an Administrative Consent Order between the owner/operator and DEP, allowing the sale to be consummated prior to full ECRA compliance.
44th Purdue Industrial Waste Conference Proceedings, © 1990 Lewis Publishers, Inc., Chelsea, Michigan 48118.
Printed in U.S.A.
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