Appellate Division Rules that Property Owners Who Purchased Contaminated Land Prior to 1993 can be Liable under Spill Act

November 13, 2012

Author: William F. Harrison, Esq. and Erin Phalon View the article (pdf) The Appellate Division on October 29, 2012 ruled that property owners who purchased previously contaminated land before 1993 and failed to conduct due diligence prior to the purchase may be liable under the New Jersey Spill Compensation and Control Act (“Spill Act”). The Court found that an owner who purchased contaminated land before September 14, 1993 can avoid Spill Act liability only by establishing that they are innocent purchasers. Effective September 14, 1993, the Spill Act was amended to include the innocent purchaser defense contained in N.J.S.A. 58:10-23.11g(d)(5). The amendment provided that a person who acquired property that is considered a major facility on which there has been a discharge is not liable for cleanup or removal costs or other damages under the Spill Act if the person can show that (1) he or she acquired the property after the discharge of hazardous materials; (2) at the time the person acquired the property, he or she did not know and had no reason to know of the discharge; (3) he or she did not discharge the hazardous substance, is in no way responsible for the discharge, and is not a corporate successor to the discharger; (4)  the person notified the New Jersey Department of Environmental Protection upon actual discovery of the discharge. Following adoption of the amendment, it was clear that a person who purchased property after September 14, 1993 on which there was previously a discharge would by liable for the remediation unless it was demonstrated the above innocent purchaser criteria were met. To read the entire article, please click above.