June 20, 2012 –
Ruling denies ‘third party defense’ claim for purchasers of contaminated properties

On June 14, the First District Court of Appeal issued an opinion on the subject of the “third party” and “innocent purchaser” defenses, two of the statutory defenses that provide relief from responsibility for cleanup of contaminated property.

The “third party defense” found in Florida Statute 376.308(2)(d) is used to provide a defense to cleanup of contamination if the contamination was an act or omission of a third party.

In the case of petroleum and dry cleaning sites, the court found that the “third party defense” must be read together with the “innocent purchaser defense,” Florida Statute 376.308(1)(c), and requires that the purchaser not have been aware of the contamination at the time of purchase.

Thus, in order to establish a “third party defense,” a purchaser of property “must also establish he or she did not have knowledge of the petroleum contamination after making appropriate inquiry.”

The court places further responsibility on prospective purchasers of property and suggests that prospective purchasers minimize liability by “negotiating a lower sales price, obtaining insurance, or simply choosing not to proceed with the purchase.”

The result of the decision appears to be that if a party discovers petroleum contamination at a property during due diligence and decides to move forward to purchase the contaminated property, he or she cannot escape liability for cleanup with a third party defense.

Read the five-page Court of Appeals decision.

This ruling is pertinent to prospective purchasers of commercial properties and could potentially impact many large businesses.

If you are considering buying or selling a property that may have been contaminated by petroleum or dry cleaning discharge, contact one of our environmental and land use practice attorneys first to get a clear understanding of your rights and obligations for cleanup.