On December 5, 2012, EPA issued new guidance discussing the potential applicability of the bona fide prospective purchaser (BFPP) protection to tenants. This guidance discusses when tenants who lease contaminated property are BFPPs and provides new information on when tenants can expect EPA to exercise its enforcement discretion under the BFPP provisions of the Federal Superfund law.
A tenant has always been able to derive BFPP status through its landlord as long as (1) all disposal of hazardous substances at the facility occurred prior to acquisition and 2) the tenant did not impede performance of the cleanup. The new guidance states that EPA may exercise enforcement discretion even when a tenant’s landlord does not qualify as a BFPP. If a tenant cannot derive BFPP status through its landlord, EPA may still exercise its enforcement discretion under the guidance and treat the tenant as a BFPP as long as the tenant complies with at least 7 of the 8 BFPP criteria. As applied to a tenant, the BFPP criteria are:
1) all disposal of hazardous substances at the facility occurred prior to execution of the lease;
2) the tenant provides legally required notices;
3) the tenant takes reasonable steps with respect to hazardous substance releases;
4) the tenant provides cooperation, assistance and access;
5) the tenant complies with land use restrictions and institutional controls;
6) the tenant complies with information requests and subpoenas;
7) the tenant is not potentially liable or affiliated with a potentially responsible person; and
8) the tenant does not impede any response action or natural resource restoration.
Under the new guidance, EPA may exercise enforcement discretion even if the tenant does not meet the 7th criteria (i.e., the tenant is affiliated with the landlord—a potentially responsible person—through the lease).
BFPP status is meant to be self-executing and EPA is not likely to be willing to offer any written determinations on the applicability of the enforcement discretion guidance. However, EPA can issue “comfort letters” when it determines such a tool is necessary and appropriate to address a tenant’s concern. It is not clear when EPA will issue comfort letters but its willingness to do so will likely depend on the availability of regional resources.
While this guidance applies to all industries, it was originally intended to facilitate renewable energy projects. EPA has issued model comfort letters for renewable energy projects on contaminated properties, which can be found at:
The new EPA guidance can be found at:
