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Rockwell publishing real estate law chapter 18
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1. Printable Lesson Materials Print these materials as a study guide These printable materials allow you to study away from your computer, which many students find beneficial. These materials consist of two parts: graphic summaries of the content and a multiple choice quiz. Graphic Summaries This portion of your printable materials consists of dozens of frames that summarize the content in this lesson. The frames are arranged on the page to make it easy for you to study the material and add your own notes from your textbook or the online course. Quizzes Many students learn best from sets of questions, and this multiple choice quiz allows you to focus your review of the material to important topics. 13218 NE 20th Street Bellevue, WA 98005 425-747-7272 800-221-9347 www.rockwellinstitute.com© 2009 Rockwell Institute
California Real Estate Law Lesson 18: Environmental Law © Copyright 2007 Rockwell Publishing, Inc.IntroductionThis lesson will discuss: l history of environmental law l environmental impact assessments l endangered species protection l cleanup of toxic waste © Copyright 2007 Rockwell Publishing, Inc.History of Environmental LawFederal and state governments began passingserious environmental protection laws in the 1960sand 1970s, in response to growing concerns about: l air pollution l water pollution l unchecked growth l species loss © Copyright 2007 Rockwell Publishing, Inc. 1
History of Environmental LawOne of the first and most important laws: NationalEnvironmental Policy Act (NEPA) l passed in 1970 l federal environmental policy l requires government to assess and mitigate possible environmental impact of all federally related projects © Copyright 2007 Rockwell Publishing, Inc.History of Environmental LawCalifornia counterpart: California EnvironmentalQuality Act of 1970 (CEQA) l goals of state law echo federal NEPA l designed to lessen impact of projects falling under state or local jurisdiction © Copyright 2007 Rockwell Publishing, Inc.History of Environmental LawEnvironmental Protection Agency (EPA): federalagency created in 1970 to deal with problemscaused by pollution l main goal to clean up toxic waste l since creation, nearly 1/3 of states have created similar agency © Copyright 2007 Rockwell Publishing, Inc. 2
History of Environmental LawCalifornia counterpart: California EnvironmentalProtection Agency (Cal/EPA) l created in 1991 © Copyright 2007 Rockwell Publishing, Inc.History of Environmental LawEndangered Species Act: federal law enacted in1973 to protect plants, animals, and habitats l California has similar law © Copyright 2007 Rockwell Publishing, Inc.SummaryHistory of Environmental Law l NEPA l CEQA l EPA l Cal/EPA © Copyright 2007 Rockwell Publishing, Inc. 3
Environmental Impact AssessmentsEnvironmental impact assessment: report preparedbefore development or other project is undertaken,describing ways to limit environmental impact l required by NEPA l required by some state laws (CEQA) l chief tool for limiting environmental damage from new development © Copyright 2007 Rockwell Publishing, Inc.Environmental Impact AssessmentsAssessment evaluates proposed project’s effect onenvironment. l If effect is significant, assessment suggests alternatives and modifications.“Projects” interpreted broadly: can also include newlaws or regulations that may negatively affectenvironment © Copyright 2007 Rockwell Publishing, Inc.Environmental Impact AssessmentsAssessment considers project’s impact on l water (supply, runoff, etc.) l biology (endangered species, etc.) l services (public safety, transportation, etc.) l health (pollution, cleanup, etc.) l culture (archeological, historical, aesthetic issues) © Copyright 2007 Rockwell Publishing, Inc. 4
Environmental Impact AssessmentsImpact assessments are prepared by: l government agency l independent consultant hired for taskPreparing assessment may take months or years. l can be costly © Copyright 2007 Rockwell Publishing, Inc.Environmental Impact AssessmentsFederal and state assessmentsFederal assessment is known as environmentalimpact statement (EIS). l required by NEPA for all significant federal projects (federal agency involvement or federal funds) l describes proposed project and impacts l lists and evaluates possible alternatives l prepared and funded by federal agency involved in project © Copyright 2007 Rockwell Publishing, Inc.Environmental Impact AssessmentsFederal and state assessmentsCA assessment is known as environmental impactreport (EIR). l required by CEQA for any public or private project likely to have significant impact l lists and evaluates alternatives, including “no project at all” l funded by applicant (whether state or individual) © Copyright 2007 Rockwell Publishing, Inc. 5
Environmental Impact AssessmentsFederal and state assessmentsSome projects require both federal and stateassessment. l may be combined into single document © Copyright 2007 Rockwell Publishing, Inc.Environmental Impact AssessmentsFederal and state assessmentsDifference between state and federal assessments: l federal alternatives: recommended, not required l state alternatives: required, but must meet “rule of reason” testRule of reason test: balancing costs againstbenefits © Copyright 2007 Rockwell Publishing, Inc.Environmental Impact AssessmentsThe assessment processAssessment process includes: l determination of significant impact l draft and final assessment © Copyright 2007 Rockwell Publishing, Inc. 6
The Assessment ProcessDetermination of significant impactUnder NEPA, federal agency planning or fundingproposed project must evaluate its possibleenvironmental impact. l if significant impact likely: must file EIS l no significant impact: must file finding of no significant impact (FONSI)Neighbors, environmental groups, individuals maychallenge FONSI. © Copyright 2007 Rockwell Publishing, Inc.The Assessment ProcessDetermination of significant impactProcedure similar for state level projects.CEQA requires planning agency that approvesbuilding permit to evaluate project. l if significant impact likely: requires EIR l no significant impact: may issue negative declaration © Copyright 2007 Rockwell Publishing, Inc.The Assessment ProcessDraft and final assessmentAfter evaluation, agency: l circulates draft EIR or EIS to other agencies and experts l makes draft available to public l will publish redraft assessment if new information becomes available l may redraft EIR or EIS l may require supplemental EIR or EIS l issues final draft © Copyright 2007 Rockwell Publishing, Inc. 7
SummaryEnvironmental Impact Assessments l Environmental impact statement (EIS) l Environmental impact report (EIR) l Finding of no significant impact (FONSI) l Negative declaration © Copyright 2007 Rockwell Publishing, Inc.Endangered Species ProtectionEndangered species laws protect: l plants l animals l habitatsLaws can have significant impact on developers. © Copyright 2007 Rockwell Publishing, Inc.Endangered Species ProtectionFederal lawEndangered Species Act (ESA): maintains list ofendangered plants and animals, prohibits any actthat may harm listed species or adversely affect itshabitat l species added after process of nomination, study, public comment l litigation commonViolation of ESA is called a “take” and may result infines, prison. © Copyright 2007 Rockwell Publishing, Inc. 8
Endangered Species ProtectionState lawCalifornia Endangered Species Act: prohibits sameactions as federal law and establishes similarprocess for listing species as endangered © Copyright 2007 Rockwell Publishing, Inc.Endangered Species ProtectionState lawState law different from federal law in some ways: l state act only protects species native to California l state law extends protection to species that are candidates for listing (even if not listed yet) l federal law protects all animal species on all land, but plant species only on federal land l state law covers animal and plant species equally © Copyright 2007 Rockwell Publishing, Inc.SummaryEndangered Species Protection l Endangered Species Act (ESA) l Take l California Endangered Species Act © Copyright 2007 Rockwell Publishing, Inc. 9
Cleanup of Toxic WasteIn California, remediation on private and publiclands is handled by California Department of ToxicSubstances Control. l under guidelines from Cal/EPARemediation: toxic waste cleanup © Copyright 2007 Rockwell Publishing, Inc.Cleanup of Toxic WasteIf EPA decides cleanup is needed, site is added toNational Priorities List (NPL).Larger remediation projects are handled underfederal law (CERCLA).Example: large-scale industrial site © Copyright 2007 Rockwell Publishing, Inc.Cleanup of Toxic WasteCERCLAComprehensive Environmental Response,Compensation, and Liability Act (CERCLA): federalstatute that: l authorizes federal toxic waste cleanups l provides rules for making polluters pay for cleanup © Copyright 2007 Rockwell Publishing, Inc. 10
Cleanup of Toxic WasteCERCLAGoal of CERCLA: to avoid burdening taxpayers withcost of cleanupActual polluting parties are liable for remediation. l subsequent owners also liable for remediation © Copyright 2007 Rockwell Publishing, Inc.Cleanup of Toxic WasteCERCLAPotentially responsible party (PRP): anyone who’sowned a parcel of land since the contaminationoccurred l may be charged cleanup costsStrict liability even extends to owner who tookpossession long after land polluted. l unless owner has valid defense © Copyright 2007 Rockwell Publishing, Inc.CERCLADefenses to strict liabilityDefenses to strict liability: l innocent landowner l contiguous property owner l bona fide prospective purchaser © Copyright 2007 Rockwell Publishing, Inc. 11
CERCLADefenses to strict liabilityInnocent landowner: someone who acquiredcontaminated property but didn’t know (and had noreason to know) about contamination when propertyacquired © Copyright 2007 Rockwell Publishing, Inc.CERCLADefenses to strict liabilityContiguous property owner: someone whoseproperty has been contaminated by an adjacentproperty owned by someone else l cannot have relationship or affiliation with party responsible l can’t have known (or had reason to know) about contamination when property purchased © Copyright 2007 Rockwell Publishing, Inc.CERCLADefenses to strict liabilityBona fide prospective purchaser: someone whopurchases a property knowing (or having reason toknow) that property is contaminated l can’t have relationship or affiliation with party responsible © Copyright 2007 Rockwell Publishing, Inc. 12
CERCLADefenses to strict liabilityAnyone asserting one of these defenses is requiredto make all appropriate inquiry (AAI) to discover ifproperty is contaminated. l inquiry must be completed before property purchased l if AAI reveals problems, party must take reasonable steps to prevent further damage © Copyright 2007 Rockwell Publishing, Inc.CERCLAResidential exceptionCERCLA applies to residential and commercialproperty.However, EPA won’t usually enforce againstresidential owner, unless the owner: l causes release (or threat of release) of hazardous substance l fails to cooperate with an EPA or state cleanup effort l develops or improves property in manner inconsistent with residential use © Copyright 2007 Rockwell Publishing, Inc.CERCLASuperfund sitesSuperfund: money raised by taxes on petroleumand chemical industries © Copyright 2007 Rockwell Publishing, Inc. 13
CERCLASuperfund sitesSuperfund used to fund cleanups when EPA can’tidentify any potentially responsible parties. l for example, when parties avoid costs by declaring bankruptcy © Copyright 2007 Rockwell Publishing, Inc.SummaryCleanup of Toxic Waste l Remediation l CERCLA l Potentially responsible party (PRP) l Innocent landowner l Contiguous landowner l Bona fide prospective purchaser l Superfund © Copyright 2007 Rockwell Publishing, Inc. 14
Legal Aspects of Real Estate Lesson 18 Cumulative Quiz1. Liability for toxic waste cleanup is determined by: A. CERCLA B. CEQA C. the Clean Air Act D. the Endangered Species Act2. A major step in the development of environmental law occurred when Congress passed the NationalEnvironmental Policy Act (NEPA) in: A. 1960 B. 1970 C. 1980 D. 19903. Before work begins on a project requiring governmental approval, the proposal may need to have an: A. environmental impact assessment B. environmental impact statement C. environmental impact report D. Any of the above4. An environmental impact statement may not be needed if the government issues a/an: A. cost/benefit analysis B. declaration of significance C. finding of no significant impact D. neutral declaration5. The federal Endangered Species Act protects: A. endangered plants on all land in the U.S., endangered animals only on federal land B. endangered plants only on federal land, endangered animals on all land in the U.S. C. both endangered plants and animals only on federal land D. both endangered plants and animals on all land in the U.S.6. Which of the following serves as an incentive to encourage landowners to protect endangered speciesand habitat? A. Superfund B. The National Priorities List C. The Safe Harbor Agreement program D. A determination of significance© 2009 Rockwell Publishing 1
7. A potentially responsible party (PRP) under CERCLA includes: A. the owner of contaminated property at the time pollution started B. any owner of contaminated property while polluting activities were ongoing C. an owner who took possession after polluting activities ceased D. All of the above8. Someone who acquires contaminated property, but didnt know about the contamination and had noreason to know, is a/an: A. bona fide prospective purchaser B. innocent landowner C. contiguous property owner D. responsible party9. Superfund is designed to: A. pay cleanup contractors when a PRP cannot be located or avoids financial liability B. compensate contiguous property owners C. pay for property buyers to satisfy all appropriate inquiry requirements D. offer financial subsidies to innocent landowners of contaminated property10. The California Endangered Species Act protects: A. non-native animals B. non-native plants C. species that are merely candidates for listing D. imported species© 2009 Rockwell Publishing 2