In the darkening gloom of these recessionary times, new federal and state laws regarding a lenders role in hazardous waste contamination/cleanup cases may help to funnel much-needed energy back into the real estate community.
Boiled down, these laws are more realistic than earlier regulations in spelling out lender-liability remedies. They provide wary lenders, driven to skittishness by environmental concerns, with the incentive to return to the business of lending.
The most important by far is a proposed rule interpretation by the Environmental Protection Agency of the "Superfund" law, a measure aimed at fairly limiting lender liability for the costs associated with the cleanup of contaminated real estate.
Changes to the Superfund
The proposed rule, now in a third draft, is expected to gain approval in substantially the same form when a final rule is published (it is due by the end of May). The proposed rule removes much of the uncertainty facing lenders by interpreting the scope of the secured creditor exemption to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly known as the Superfund law.
CERCLA enables state and federal governments and private parties to recover costs incurred in response to a release or threatened release of hazardous substances from the "owner and …