NCJ Number
141692
Journal
ABA Journal Volume: 79 Dated: (February 1993) Pages: 68-71
Date Published
1993
Length
4 pages
Annotation
The new body of Federal law concerning hazardous waste disposal is dramatically changing the rules governing land transactions and impose onerous burdens on fiduciaries and lenders.
Abstract
The statutory premise for lender liability related to environmental offenses is derived from the Comprehensive Environmental Response, Compensation, and Liability Act, commonly called Superfund or CERCLA. The law covers owners or operators of contaminated sites. Lenders can unwittingly invite CERCLA liability for cleanup by foreclosing on contaminated property, despite not being involved directly in day-to-day operations or participating directly in decisions regarding hazardous waste. Instead, one judicial decision held that a lender would be liable if its involvement with the facility management was sufficiently broad to support the inference that it could affect hazardous-waste disposal decisions if it so chose. CERCLA also affects many fiduciaries such as trustees. Because of these rulings, fiduciaries should adopt a proactive plan to avoid incurring environmental liability. They should carefully evaluate any property, conduct an environmental audit, and seek affirmative statements by the borrow that the property is not known to be contaminated by hazardous wastes and has not received notice of an alleged violation of environmental laws. Photographs