Summary
Many States have enacted Brownfields laws, aimed at encouraging the redevelopment of moderately contaminated properties. Since many Brownfields properties have tax arrearages, it is important that the tax foreclosure process can be completed so that new owners can redevelop them and restore them to a productive status. The good news is that many Brownfields laws have been drafted in a manner that encourages tax sales and property recycling.

Historical Approach
Historically, delinquent Brownfields property owners had very little to worry about because municipalities were reluctant to foreclose on their properties. Thus, dirty properties would often remain empty, often drug havens, and that status would remain exactly the same for years, some times decades.

The reason municipalities would not foreclose is because under traditional laws, municipalities could become liable for cleanup costs if they began the foreclosure process. Traditional laws made any "owner" liable and municipalities that took title during the foreclosure process, or third parties that bid on such properties, risked substantial cleanup cost liability. Since cleanup cost liabilities could often exceed the value of the property, foreclosures of these properties were generally avoided.

Thus, there has historically been a difference between delinquent greenfields and delinquent Brownfields. Greenfields would generally go through the process and as a result, the property would be redeemed or sold to a third party. Brownfields remained abandoned. Abandoned often equated with drug use, prostitution, other illicit activity, and vandalism. Thus, while greenfields have historically been recycled, tax delinquent Brownfields were more likely to represent a disproportionate strain on local emergency resources.

New Approaches to Deliquent Brownfields
Many tax collectors are still reluctant to foreclose on Brownfields. However, many states have enacted comprehensive Brownfields reforms in the last five years, and some of these reforms make foreclosure of these properties a more palatable option. One common reform allows local governments to foreclose on properties without becoming liable for cleanup costs. Other reforms found in many state laws have allowed third parties to purchase tax delinquent Brownfields without incurring cleanup cost liability.

In addition, some state and federal initiatives have made grants and low interest loans available to assess the extent of property contamination. New Jersey and Pennsylvania, for example, provide grant money to municipalities for the purpose of delineating the extent of contamination on tax delinquent properties.

Once the extent of property contamination has been defined, private investors are more likely to be interested in purchasing the property because they can calculate how much money needs to be factored into the transaction to cover cleanup costs. The benefit of such laws is that Brownfields can be given a second chance at life, producing jobs and generating taxes.

Moreover, Brownfields laws such as those described above make it more practical for municipal governments to take title to tax delinquent Brownfields. Such properties can be used for traditional municipal purposes, or as part of a larger, revitalization project.

Conclusion
Historically, local governments have depended on legal remedies, such as forfeiture, legal action against the property owner, and foreclosure, to ensure that taxes are collected and municipal expenses are covered. While greenfields tended to be relatively problem-free, Brownfields tended to remain on the shelf. Recent changes in Brownfields laws make foreclosure, and property recycling, a more viable option.

The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.

Stuart Lieberman, Esq., and IRED.Com, Inc., will not accept any responsibilty for any reliance on the information in this column or any damages whatsoever resulting from reading this column.