Environmental
CERCLA's 'innocent landowner' defense protects a buyer from Superfund liability if the buyer:
ADid not cause the contamination and conducted all appropriate inquiry before purchase✓ Correct
BPurchased the property for less than market value
CLived on the property for at least one year
DObtained title insurance before purchasing
Explanation
The innocent landowner defense under CERCLA protects buyers who conducted appropriate environmental due diligence (such as a Phase I ESA) and had no reason to know of contamination.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
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