Washington Court Gives Property Sellers and Buyers Another Reason to Beware of Cleanup Liability

The Washington Court of Appeals has raised the stakes for parties involved with a real estate transaction where a heating oil underground storage tank may have been used on the property. As a result of the ruling, property buyers, sellers and even lenders should pay much closer attention to the risks associated with heating oil tanks than they had previously.

The 3-0 published decision in Grey v. Leach, issued on December 13, held that a former property owner who contributed to contamination, even when such contribution occurred without intent or negligence, is not an "innocent purchaser" protected from liability under the Washington Model Toxics Control Act ("MTCA"). The court also held that a release of heating oil from a residential tank is not a "domestic purpose." This case is the first time that an appellate level court in the state of Washington has interpreted either the "innocent purchaser" or "domestic purpose" defenses.

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