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Prevent Your Tenant Mix from Turning Your Property into a 'REC'

By Am'lie H. Mailloux
September 29, 2008

Over the past 30 years, an increasing number of properties have been and continue to be classified as having some kind of recognized environmental condition (a “REC”). The REC classification arises from the U.S. Environmental Protection Agency (the “EPA”) crackdown over the past few decades to ensure that property owners and the parties who are responsible for causing the contamination actually share in the cost and burden of the remediation process (42 U.S.C. ”9601 to 9675 (“CERCLA”).

In an effort to provide a road map or plan to address the issues, the EPA continues to further develop its regulations to make sure that the responsible parties are being held responsible (“the polluter pays”). The EPA has developed a methodology enabling various “innocent” parties to limit their liability regarding a contaminated property. This approval is embodied in the so-called 2002 Brownfields Amendments to CERCLA. See Small Business Liability Relief and Brownfields Revitalization Act (2002) Pub. Law 107-118. In many cases, Brownfields protections have proved to be an incentive to development as a particular contaminated property might not be a candidate for redevelopment if these guidelines were not in place. The methodology created by the EPA, while a vast improvement toward targeting the responsible parties, still places a significant burden on a landowner and prospective purchaser wishing to limit their environmental liability.

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