New Legal Protection for Buyers of Real Estate in Ohio

On June 16, Governor DeWine signed legislation that adopts the federal Bona Fide Prospective Purchaser (BFPP) Defense as a means of addressing state of Ohio environmental liabilities. Buyers of real estate in Ohio that perform environmental due diligence prior to purchasing real estate and follow the federal All Appropriate Inquiry standard can now establish an affirmative defense for both federal and State of Ohio environmental contamination liabilities. Until now the new owners of property that had no involvement with contamination that occurred before they purchased the property could be held liable under Ohio law for the entire cost of cleanup simply because they took ownership of the property.

To help our clients more effectively manage Ohio environmental liabilities LaBella Associates worked with the Greater Ohio Policy Center to provide testimony in support of the legislation as it was considered in both houses of the Ohio state legislature.

The new Ohio BFPP law becomes effective September 14, 2020.

In order to establish and maintain the new BFPP liability defense there are two basic sets of activities that must be performed:  1) All Appropriate Inquiry due diligence; and 2) Satisfaction of “Continuing Obligations” requirements including taking reasonable steps to address hazardous substance releases. A buyer with no prior involvement with the property can build a BFPP liability defense by completing certain environmental steps before buying (or leasing) the property. The BFPP liability protection is valid even if the property is contaminated with hazardous substances. Also important to note is the new BFPP protections do not require entry into the Ohio Voluntary Action Program (VAP) which generally is a more time consuming and costly process to secure a State of Ohio environmental liability protection.

  1. All Appropriate Inquiry Due Diligence

To secure the new Ohio BFPP defense, buyers of property must perform environmental due diligence, and they must have no prior affiliation with the property: Those with existing liability for contamination cannot establish a BFPP defense. The prospective purchaser of the property will need to complete environmental due diligence by meeting the requirements of the federal All Appropriate Inquiry standard. The federal All Appropriate Inquiry rule is found at 40 CFR 312.20, and establishes the minimum requirements needed to start the process of creating an affirmative defense to the liability for environmental contamination on the property. The requirements include:

  • Interviews with current and past owners, operators, and occupants. In the case of abandoned properties, interview one or more neighboring property owners.
  • Review of historical sources of information.
  • Review of federal, state, tribal and local government records.
  • Visual inspection of the facility and adjoining properties.
  • Review of commonly known or reasonably ascertainable information about the property.
  • Assessment of the degree of obviousness of the presence or likely presence of contamination at the property and the ability to detect the contamination.
  • Identification of any significant data gaps in information collected that affects the ability of the environmental professional to identify conditions indicative of releases or potential releases of contaminants.
  • The results of an AAI investigation be documented in a written report, signed by an environmental professional.

Common commercial practice to perform AAI begins with the completion of a Phase I Environmental Assessment. The AAI rule references the ASTM E1527-E standard which conforms to the AAI requirements and is the industry standard for Phase I site assessments.  The goal of Phase I Site Assessment is to identify any Recognized Environmental Concerns (RECs) that are associated with the property. 

Note: AAI must be conducted or updated within one year before the date of acquisition of a property and certain aspects of AAI need to be conducted or updated within 180 days before acquiring ownership of a property.

The AAI due diligence steps must be completed by a qualified Environmental Professional in order to establish the new Ohio the BFPP liability defense. 

LaBella Associates has more than 180 Environmental Professionals that perform more than 1,000 Phase I site assessments each year that meet the AAI requirements and conform to the current ASTM E1527-E standard. If RECs are identified and steps are needed to mitigate or remedy concerns, LaBella has over 30 years of experience remediating environmental contamination issues.

  1. Continuing Obligations and Reasonable Steps

If Recognized Environmental Concerns are identified by the environmental professional during the Phase 1 ESA there are additional actions that a new owner must take in order to preserve both the Ohio and federal BFPP liability defense. These actions are referred to as Continuing Obligations and include: 

  • Taking “Reasonable Steps” in order to stop a continuing release, prevent a threatened release and prevent or limit hazardous substance exposures to humans, the environmental or natural resources with respect to hazardous substance releases affecting a landowner’s property;
  • Demonstrating that no disposal of hazardous substances occurred at the facility after acquisition by the landowner;
  • Complying with land use restrictions and not impeding the effectiveness or integrity of institutional controls (ICs);
  • Providing cooperation, assistance, and access to state and federal agency staff authorized to conduct response actions or natural resource restoration;
  • Complying with information requests and administrative subpoenas from state and federal agencies.

In some circumstances it may make sense to set up a written plan for periodic site monitoring activities and inspections in order to ensure that there is documentation that confirms that the Continuing Obligation requirements are being met.

LaBella Can Help

LaBella’s experienced Environmental Professionals can help you complete environmental due diligence on all your real estate transactions and create both federal and State of Ohio BFPP liability defenses for the properties that you are planning to acquire.  

Please contact Matt Hammer, Regional Environmental Manager,, 330-414-6666 cell, 585-770-2566 direct, at LaBella’s Mayfield Heights Office for additional information and assistance with your next project.

For additional background on the legislative initiative that led to the new law please visit the Greater Ohio Policy Center website at