Monthly Archives: December 2012
EPA has revised the way that it treats tenants of contaminated properties as
Bona Fide Prospective Purchasers (BFPPs) under CERCLA. CERCLA does not
require that tenants conduct their own All Appropriate Inquiry (AAI) when
leasing a property; they can benefit from BFPP status if the owner properly
conducts an AAI.
Previously, however, if an owner lost its BFPP status, then the tenant would
also lose that protection, and might be subject to CERCLA liability.
However, pursuant to the new guidance, EPA will use its enforcement
discretion on a case by case basis to determine whether or not the tenant
should remain a BFPP.
Under CERCLA’s “prohibited affiliation” provision, a lease might preclude a
tenant from attaining BFPP status. However, EPA has stated that it will use
its enforcement discretion to determine a tenant’s BFPP status on a case by
The new guidance applies to leases executed after January 11, 2002, provided
that the tenant satisfies other BFPP provisions.