Bona Fide Prospective Purchaser (BFPP) protections
Tucked into the recent 2018 Federal Budget are several items of interest to our environmental and real estate clients. The Brownfields Program can now protect lessees of property under the Bona Fide Prospective Purchaser (BFPP) provisions of the Act. In the past, lessees could only be protected if the lessor/owner had similar BFPP protections. No longer.
Those lessees who develop real estate or operate under long term ground leases can now do so without the burden of liability for the pre-existing contaminants on the site.
If a lessee is unrelated to the party responsible for a release of contaminants, conducts a Phase 1 Environmental Site Assessment (“all appropriate inquiry”) prior to closing and doesn’t make the situation at the site worse, the lessee is exempt from environmental liability at the site, even if the lessor is not protected as a BFPP.
And there’s more good news on Brownfield Grants in the 2018 Budget. Grants may now be made to non-profit organizations. Grants have been increased to $500,000 from $200,000, and EPA can waive that limit up to $650,000. Multi-purpose grants are available for up to $1,000,000, which can include administrative costs. Facilities that generate renewable energy or demonstrate energy efficiency are now eligible for the program.
The Environmental Practice Group at KGR can help developers and lessees negotiate the minefield of environmental liability when developing real estate. Call us, we’ll be glad to help.
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