Laws bill landowners for toxic cleanup
The idea is that anyone with hazardous waste on his property should pay to have it mopped up. But federal and state laws aimed at ensuring that someone pays for the cleanup of toxic chemical waste may cost some unsuspecting landowners money.
A few years ago, Laurence Aubin, a Massachusetts real estate developer, bought an old vegetable farm in the northeast corner of the state. It had once been the site of illegal chemical dumping, but, he was told, that had all been taken care of.
''Everyone convinced me it was clean,'' he recalls, ''the state, the bank.''
Six months later, however, the commonwealth found that the cleanup hadn't been thorough enough. Since the polluting company was bankrupt, the state sent Mr. Aubin a $200,000 bill for cleanup costs. He is now contesting the charge in court.
''If someone was killed by somebody, and they left the body on my property, I wouldn't be charged with murder,'' Aubin says. Likewise, he reasons, ''Since I didn't do the polluting, I shouldn't be treated like a polluter.''
Massachusetts and at least nine other states - California, Illinois, Maryland , Montana, New Jersey, Ohio, South Dakota, Virginia, and Washington - apparently do not agree. They all have statutes that can force property owners to pay for hazardous waste cleanup, regardless of their guilt, by putting liens on their property. These statutes apply if the polluter either cannot be found or cannot pay for the cleanup.
Some states go even further. Massachusetts, New Hampshire, and New Jersey can clean up private property with state money and then hit the site's owner with a ''superlien'' that takes priority over any other loans - even, as in Aubin's case, if the owner bought the property without knowing it was contaminated.
''I think it's a clumsy way to accomplish what they want,'' says Boston real estate attorney Michael Last.
The notion is known as ''innocent-owner liability.'' While the laws in many states aren't being vigorously enforced or have yet to be tested in court, their very existence has unsettled some observers in the banking and insurance communities. They warn that this ability to wield a superlien while enforcing innocent-owner liability could delay construction projects, stop up financing, and increase insurance costs.
In Massachusetts, many banks and title insurers require site assessments ranging from $1,000 to $15,000 before extending credit.
''It's an unnerving prospect to think that if someone dumps chemicals on your front lawn you could lose your house,'' says Robert Bozarth of Lawyers Title Insurance Corporation, the nation's largest title insurer.
The laws are modeled on a 1980 law establishing the federal Superfund for cleanup of the nation's 546 worst hazardous waste sites. To qualify for federal funds, the state has to shoulder part of the cleanup cost at each site.
The stringency of the laws and the degree to which they are enforced varies. New Hampshire has not applied liens to any properties. New Jersey's superlien laws are being challenged in court, and the state has yet to collect on the ordinary liens that it has attached.
In Massachusetts, on the other hand, the property owner can be liable for up to three times the cost of site cleanup. So far this year, the superlien has been used twice by the commonwealth, according to Madeleine Snow of the Department of Environmental Quality Engineering (DEQE).
The state's reasons that landowners should care for their own property.
''Along with the ownership of land comes a certain responsibility,'' says Willard Pope, general counsel for the DEQE. ''When your backyard is a chemical dump, it isn't worth a thing. Why should the government pay for private property improvement?''
He rejects the argument that innocent landowners might suffer from the brunt of these laws. ''There was a case where somebody got a few barrels of waste thrown in their backyard. We didn't collect.'' The state, he says, instead concentrates its energies larger pollution problems.
''It's not part of the legislation,'' Mr. Pope says, ''just plain equity.''
California, however, recently pursued a couple that had bought a house in the northern part of the state, only to find the yard laced with toxic polychlorenated biphenyls, or PCBs.
''The two couldn't find the $20,000 to cleanup the place so the state laid on them a $25,000-a-day fine,'' recalls Joel Moskowitz, deputy director for the state's hazardous waste control program. ''There was quite a hue and cry on that one.''
Ultimately, the state lifted the fines and sought an alternative. The solution? This week Mr. Moskowitz and his associates will be shoveling out the property themselves.
''At some point you just have to ease up on the bureaucracy and take things over into your own hands,'' he says.
Some of the more stringent laws seem to be easing up. In order to avoid the liability that might arise if a landowner defaulted on a lien, the Federal Home Loan Mortgage Corporation temporarily pulled out of Massachusetts' mortgage market last fall. After the Federal National Mortgage Association threatened to do the same, the Massachusetts legislature pushed through revisions in the law.
While the state can still apply ordinary liens to homes, superliens now only apply to commercial property. Future initiatives may go further: Massachusetts Gov. Michael Dukakis is hoping to abolish the superlien altogether. Instead, he would require sellers of the property to have site assessments made, to ensure that the sites are clean.
''There's definitely a fine-tuning going on,'' says Mr. Bozarth.