32
Environmental and Health
exhausted do the federal Superfund moneys
(and/or the state
"superfunds") become available.
Costs associated with environmental impairment of real property
resulting from releases of hazardous substances are eligible for cost
recovery under Superfund. The original intent of SARA (the 1986
amendments to CERCLA) was to provide potential defense against
liability for "innocent" purchasers of property affected by listed
hazardous substances. The environmental site
assessment process,
developed to respond to the need to perform due diligence under SARA,
has expanded to include evaluations of environmental issues such as
wetlands and degradation of property by petroleum product releases,
asbestos, radon, and lead, for instance, all directly affecting the collateral
value, though not necessarily a liability under Superfund, to potential
owners and parties to the transaction process. How these related issues
will be evaluated and the corresponding level of risk assessed should be
carefully and completely discussed by all parties to the transaction prior
to commencement of the environmental assessment process. The
purchase price and ability of the purchaser to obtain financing are
directly affected by actual cleanup costs and perceived risks associated
with the presence of toxic and hazardous substances in site buildings, soil
and groundwater.
Following CERCLA, several states adopted hazardous waste liability
laws. Some states, including Massachusetts, New Jersey, Connecticut,
and New Hampshire, have enacted so-called super lien laws which
provides states the authority to impose a lien on any property requiring
cleanup that involves state expense. The super lien law takes precedence
over all other encumbrances, including first mortgages.
While various states passed super lien legislation, New Jersey
enacted the Environmental Cleanup Responsibility Act (ECRA). Under
ECRA, the New Jersey government has become aggressively involved
in regulating property transfers by requiring proof that commercial and
industrial properties are "clean" prior to a change in ownership. In
effect, New Jersey has the authority to void property transactions if an
environmental site assessment and cleanup of hazardous materials present
on the property have not been completed. New Jersey's ECRA, has
been amended and retitled ISRA (discussed later). It is important to
understand both the ECRA and ISRA legislation, because many aspects
of ECRA still apply and are under enforcement.
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