EnvironmentalIntermediateCalifornia Exam

CERCLA (the Superfund law) is significant to real estate because:

AIt sets mortgage disclosure requirements for contaminated properties

BIt makes current and past property owners potentially liable for cleanup of hazardous wasteCorrect

CIt requires all commercial buyers to purchase environmental insurance

DIt establishes a federal zoning overlay for industrial sites

Why It makes current and past property owners potentially liable for cleanup of hazardous waste Is Correct

Answer B: It makes current and past property owners potentially liable for cleanup of hazardous waste

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes strict, joint, and several liability on potentially responsible parties — including current and former owners, operators, and generators — for cleanup of hazardous substance releases. This liability can transfer to new owners who purchase contaminated property.

Exam Tip: Environmental

Environmental questions test knowledge of hazards like asbestos, lead-based paint, radon, and mold. Know the disclosure requirements and when a professional inspection is required. CERCLA liability is strict, joint, and several.

Key Environmental Terms in This Question

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

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Key Terms to Know

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

Variance

Official permission to use land in a way that does not conform to the applicable zoning ordinance, granted by a zoning board when strict enforcement would cause undue hardship.

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.