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Environmental Laws You Need to Know for the Real Estate License Exam

Real Estate License examiners will expect you to have a general understanding of environmental laws, as it pertains to real estate. As environmental concerns have grown across the United States, the federal government has passed a series of laws, regulations, and programs to deal with environmental issues.

Many of them are known by the acronyms that their letters form. In studying this information for an exam, take time to discover not only the acronyms but also the full titles. You also need to have a pretty good idea of the type of issue that the program deals with and its important points. In a few cases just knowing what the letters stand for will be enough.

In some cases, states have passed their own environmental laws to supplement or go further than federal laws. Be sure to check out these laws and find out whether you’ll be tested on them. This information should be available in your prelicense course.

CERCLA

In 1980 the federal government adopted into law the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This law’s purpose is to identify sites of environmental pollution and provide funds for cleanup.

The act calls for the identification of people and/or businesses responsible or potentially responsible parties (PRP) for the creation of uncontrolled hazardous waste sites or hazardous waste spills. The act also created a $9 billion fund called the Superfund to pay for the cleanup of identified hazardous waste sites.

The act considers liability for such a site and its cleanup to be strict. Strict liability means that the property owner has no excuse with respect to his liability. The act also considers the liability to be joint and several, which means that if more than one person is responsible for the hazardous waste site, the law is enforceable on the group as well as on each individual.

In fact, if, for example, one of two people had no funds available for cleanup, the other party could be held responsible for the total cost. The second party would have to try and get payment from the other person through a lawsuit.

Under CERCLA, a current landowner can be held liable for the cost of cleaning up a hazardous waste site even when he or she didn’t create it. The current owner can then try to obtain reimbursement from the people who originally created the site or from the Superfund itself.

The term retroactive liability also is used in connection with CERCLA and the Superfund. It means that all previous owners also can be held accountable for the hazardous waste site.

EPA

The Environmental Protection Agency (EPA) is the federal agency responsible for dealing with environmental issues. The agency advises Congress and the president regarding laws to protect the environment. The agency writes regulations implementing laws that have been passed, and the agency enforces all federal environmental rules and regulations. The EPA administers, among other laws, the Clean Water Act, the Toxic Substance Control Act, and the Resource Conservation and Recovery Act.

HMTA

The important thing to remember for the exam here: The Hazardous Material Transportation Act (HMTA) is enforced by the United States Department of Transportation.

HUD

The United States Department of Housing and Urban Development (HUD) isn’t a major player in the federal regulation of environmental issues. However, it’s mentioned because the agency is relevant when concerned with lead paint disclosure.

LUST

The Leaking Underground Storage Tanks (LUST) program, sometimes referred to as the UST or Underground Storage Tank program, was created in 1984 as part of the Resource Conservation and Recovery Act administered by the EPA.

This program targets underground storage tanks used for the storage of hazardous substances such as chemicals or oil-based products like motor fuel. Such tanks must be registered with the EPA.

There are a number of exceptions to the underground storage tank program, including tanks with a storage capacity of less than 110 gallons; tanks used for heating oil used on the property; and motor fuel storage tanks of less than 1,100 gallons on farms and residential properties. The program regulates such areas as tank installation and maintenance as well as spill prevention and monitoring.

Individual states may have programs that supplement the federal underground storage tank program. Check out your state law to find out whether this issue is something that you need to know for your state test. Generally the law may provide for additional registration of tanks, different minimum size tanks that have to be registered, and possibly different technical requirements.

OSHA

The Occupational Safety and Health Administration (OSHA), which is part of the United States Department of Labor, is responsible for providing and monitoring regulations regarding worker safety particularly in factories.

SARA

The Superfund Amendments and Reauthorization Act of 1986 (SARA) was passed when the original act, CERCLA, expired in 1985. The three essential functions SARA performs are

  • Providing increased funding to the Superfund for environmental cleanup.

  • Creating stronger standards for cleanup of hazardous waste.

  • Creating something called innocent landowner immunity.

    Where a property owner has been innocent of all involvement with a hazardous waste site, under certain circumstances, she may claim immunity from responsibility. In addition to having no involvement or knowledge of the situation, the property owner must have taken what is sometimes called due care or due diligence in having the property investigated for potential environmental contamination.

    This investigation usually takes the form of an environmental assessment. Before the innocent landowner immunity status was created, the current owner, regardless of guilt, could be held liable by the EPA to pay for cleanup of a hazardous waste site and then would have to seek reimbursement from a previous owner. SARA’s immunity status can relieve a current innocent owner of this liability.

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