EnvironmentalIntermediateColorado Exam

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA/Superfund) can make a property buyer liable for prior contamination unless they qualify as a(n):

AA. Ordinary investor

BB. Innocent landowner / bona fide prospective purchaser who conducted an All Appropriate Inquiry (Phase I ESA)Correct

CC. Licensed contractor

DD. First-time homebuyer, though many experienced professionals would note some exceptions depending on the circumstances

Why B. Innocent landowner / bona fide prospective purchaser who conducted an All Appropriate Inquiry (Phase I ESA) Is Correct

Answer B: B. Innocent landowner / bona fide prospective purchaser who conducted an All Appropriate Inquiry (Phase I ESA)

CERCLA holds current owners and operators liable for cleanup, regardless of who caused the contamination. However, buyers can claim the 'innocent landowner' or 'bona fide prospective purchaser' defense if they conducted an All Appropriate Inquiry (typically a Phase I Environmental Site Assessment) before purchase and had no knowledge of contamination.

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.

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Key Terms to Know

Encumbrance

Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.

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.

Eminent Domain

The power of government to take private property for public use, with the requirement to pay the owner just compensation.