Environmental
An innocent landowner defense under CERCLA requires that the buyer:
AHave purchased the property at a discounted price
BConducted all appropriate inquiry (AAI) into previous ownership and uses prior to purchase✓ Correct
CHave had the property remediated before resale
DNot have operated any business on the property
Explanation
The innocent landowner defense under CERCLA requires that the buyer performed 'all appropriate inquiry' (AAI) — typically a Phase I ESA — before purchasing, did not know of contamination, exercised due care after discovery, and cooperated with cleanup. This shields the buyer from CERCLA liability.
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Key Terms to Know
Option Contract
A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
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