Liability and Real Estate Issues | WQARF Program

Residential Liability Policy

For properties included within the boundaries of state and federal superfund sites, the following policies lend clarification to liability concerns. The U.S. Environmental Protection Agency (EPA) and the Arizona Department of Environmental Quality (ADEQ) maintain a policy of not requiring residential homeowners to perform or pay for cleanup actions at state or federal Superfund sites. Homeowners may be held liable for cleanup where their own actions have led to a release or threatened release of hazardous substances requiring a cleanup of their property, or where the property is used for non-residential purposes. This policy is designed to alleviate concerns about cleanup liability for homeowners, as well as parties involved in real estate transactions, such as lenders and title insurers.

This information was adapted from the U.S. EPA Publication 9230.0-23FS, "Homeowners Exempted From Cleanup Costs,"; dated November 1991, and Arizona Revised Statutes (ARS) §49-283 (B) (see below).

A.R.S. 49-283 (B) Notwithstanding the provisions of subsection A, a person that owns real property is not a responsible party if there is a release or threatened release of a hazardous substance from a facility in or on the property unless one or more of the following applies to that person:

  1. Was engaged in the business of generating, transporting, storing, treating or disposing of a hazardous substance at the facility or disposing of waste at the facility, or knowingly permitted others to engage in such a business at the facility.
  2. Permitted any person to use the facility for disposal of a hazardous substance.
  3. Knew or reasonably should have known that a hazardous substance was located in or on the facility at the time right, title or interest in the property was first acquired by the person and engaged in conduct by which he associated himself with the release. For the purpose of this paragraph, a written warranty, representation or undertaking, which is set forth in an instrument conveying any right, title or interest in the real property and which is executed by the person conveying the right, title or interest, or which is set forth in any memorandum of any such instrument executed for the purpose of recording, is admissible as evidence of whether the person acquiring any right, title or interest in the real property knew or reasonably should have known that a hazardous substance was located in or on the facility. For purposes of this paragraph, "associated himself with the release" means having actual knowledge of the release and taking action or failing to take action that the person is authorized to take and that increases the volume or toxicity of the hazardous substance that has been released.
  4. Took action which significantly contributed to the release after he knew or reasonably should have known that a hazardous substance was located in or on the facility.

ARS 49-283 (C)Any liability which accrues to an owner of real property under this section does not accrue to any other person who is not an owner of the real property merely because the other person holds some right, title or interest in the real property. An owner of real property on which a public utility easement is located is not a responsible party with respect to any release caused by any act or omission of the public utility which holds the easement in carrying out the specific use for which the easement was granted.

ARS 49-283 (D) person otherwise deemed a responsible party is not liable under this article if he can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the resulting damages were caused solely by:

  1. An act of God.
  2. An act of war.
  3. An act or omission of a third party, whether lawful or unlawful including acts of vandalism or unlawful disposal of hazardous waste or hazardous substances, other than an employee or agent of that person or other than one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with that person, unless the sole contractual arrangement arises from a published tariff and acceptance for carriage by a common carrier by rail, if that person establishes by a preponderance of the evidence that:
  4. He exercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of the hazardous substance in light of all relevant facts and circumstances.
  5. He took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions.
  6. A release or threatened release which was subject to limits or conditions in a federal permit or a state permit relating to the protection of public health or the environment and the operation of the releasing facility has been and is in compliance with applicable limits or conditions.
  7. The application of a pesticide product registered under the federal insecticide, fungicide, and rodenticide act (61 Stat. 163) and applied according to label requirements.
  8. Liability has been assumed by the federal postclosure liability fund established under 42 United States Code section 9607(k).
  9. Any combination of paragraphs 1 through 6 of this subsection.

Off-Site Migration Liability Policy

In general, the U.S. EPA will not take action to compel such property owners to perform cleanups or to reimburse the agency for cleanup costs where contamination to their property was caused solely by migration of contaminants from other property.

This information was adapted from the U.S. EPA Publication, Policy Toward Owners of Property Containing Contaminated Aquifers, November, 1995.

Under Arizona law a person is not responsible for a hazardous substance that is located on or beneath the property if the hazardous substance that is located on or beneath the property is present solely because it migrated from property that is not owned or occupied by that person.

This statement adapted from ARS §49-283.E.

ARS 49-283 (E) A person is not a responsible party with respect to a hazardous substance that is located on or beneath property that is owned or occupied by that person if the hazardous substance is present solely because it migrated from property that is not owned or occupied by that person and that person is not otherwise a responsible party as prescribed by subsection A, paragraph 2 or 3.