Bona Fide Prospective Purchaser Agreement

As a professional, I understand the importance of writing articles that not only inform but also rank well on search engines. In this article, I will discuss the bona fide prospective purchaser agreement, which is a crucial component in environmental due diligence.

A bona fide prospective purchaser agreement (BFPP) is a legal agreement that protects purchasers from liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This act holds property owners responsible for cleaning up any hazardous waste contamination on their property, even if they did not cause it.

Under CERCLA, a “bona fide prospective purchaser” is someone who purchases property with the knowledge that it may be contaminated with hazardous substances but takes precautions to prevent exposure to those substances. A BFPP agreement provides protection for this type of purchaser from any potential liability under CERCLA.

The BFPP agreement requires the purchaser to conduct environmental due diligence before purchasing the property. This due diligence process involves a thorough investigation of the property`s environmental history, including any past hazardous waste spills or releases. The purchaser must also perform any necessary cleanup activities to mitigate any potential environmental risks associated with the property.

To qualify for protection under the BFPP agreement, the purchaser must meet certain criteria. These criteria include:

1. Conducting “all appropriate inquiries” before purchasing the property

2. Not being responsible for any hazardous waste contamination on the property

3. Taking reasonable steps to prevent any future contamination

4. Cooperating with any government agency requests for environmental information or access to the property

5. Complying with any land use restrictions or other environmental obligations associated with the property

The BFPP agreement is a valuable tool in protecting purchasers from liability under CERCLA. It allows purchasers to conduct due diligence and mitigate any potential environmental risks without fear of being held liable for any past contamination. It is important to note that the BFPP agreement does not provide immunity from liability for other environmental laws or for any deliberate or intentional misconduct.

In conclusion, the bona fide prospective purchaser agreement is a crucial component in environmental due diligence. It protects purchasers from liability under CERCLA and allows them to conduct due diligence and mitigate any potential environmental risks associated with the property. As always, it is recommended to work with a qualified environmental consultant or attorney to navigate the intricacies of environmental due diligence and the BFPP agreement.