§ 32-40.1-02 — Third-party liability - Environmental damage

North Dakota § 32-40.1-02

• Jurisdiction: North Dakota
• Title 32: Judicial Remedies
• Ch. 32-40.1: Lender Liability for Environmental Damage

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1. Except as preempted by federal law, a person may not be deemed to be an owner or
operator of property who, without participating in the management of the property,
holds indicia of ownership primarily to protect a security or lien hold interest in the
property or in property in which the property is located.
2. A lender-owner or representative is not by virtue of becoming the owner of property
liable for any third-party liability arising from contamination or pollution emanating from
the property before the date the title vests in the lender-owner or representative. For
the purposes of this section, the issuance of a sheriff's certificate of sale is not
sufficient to vest title in the lender-owner or representative.
3. A lender-owner or representative is not by virtue of becoming the owner of property
liable for any third-party liability arising from contamination or pollution emanating from
the property during the period of ownership so long as, and to the extent that:
a. The lender-owner or representative does not knowingly cause new contamination
or pollution or does not knowingly allow others to cause new contamination or
pollution;
b. The lender-owner has, in good faith, caused an individual, including an officer or
employee of the lender-owner, possessing the requisite knowledge and
experience to conduct a visual inspection of the property to determine the
presence and condition of hazardous wastes or substances and obvious
contamination or pollution; and
c. The lender-owner found by the enforcing agency to be in noncompliance with
federal or state laws takes steps to assure compliance with applicable laws.