Innocent Purchasers of Contaminated Property

New Jersey’s Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq., governs liability regarding a property upon which hazardous substances have been discharged. The Act states that anyone “in any way responsible” for hazardous substance discharge is strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs. Land purchasers in some instances have obtained safe harbor from responsibility to respond to such discharges occurring prior to their ownership of a contaminated property. The “innocent purchaser defense” is available where the following elements are satisfied:

  1. The innocent purchaser acquired the real property after the discharge of the hazardous substance at the real property;
  2. At the time of acquisition, the innocent purchaser did not know, and had no reason to know, that any hazardous substance had been discharged at the property;
  3. The innocent purchaser did not discharge the hazardous substance, is not in any way responsible for the hazardous substance, and is not a corporate successor to the discharger or responsible person; and
  4. The innocent purchaser gave notice of the discharge to the NJDEP upon actual discovery of that discharge.

A Spill Act amendment has clarified that purchasers of property after 1993 who knew or should have known about prior discharges through due diligence will be liable. Pre-1993 purchasers may also be liable unless they are an innocent purchaser pursuant to the Act. Any buyer, therefore, who does not perform appropriate due diligence may be ultimately responsible to foot the bill for cleanup.

If you’re concerned regarding potential liability under the Spill Act, please feel free to contact our office to schedule a consultation.

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