Gas Station Sites & Third-Party Liability: Three Case Studies

Government imposed cleanup risks are minimized if a site is eligible for the Florida Department of Environmental Protection (FDEP) Petroleum Restoration Program. FDEP will not require assessment or remediation at eligible sites until funds become available, based on 376.308(5), Florida Statutes. 

Thus, the most significant environmental concern for eligible gas station sites is third-party liability. Such liability would result from human exposure risks (relatively rare) or from off-site migration of contamination.

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An abandoned gas station was eligible for the cleanup program, but contaminants migrated off site into the adjacent right of way. Phase I research indicated that water and sewer improvements were scheduled in the contaminated area within one year. Liability for remediation services in the right of way would likely be the responsibility of the property owner. The prospective buyer of the site used the assessment data to negotiate a reduced sales price, and the transaction closed. The new owner is prepared, in the event remediation services become necessary.

At another eligible abandoned gas station, contaminants were detected at property boundaries, downgradient of the source. Assessment data revealed that the concentrations of contaminants that were crossing property boundaries were only slightly above the regulatory standards. The lender and buyer felt comfortable with the minimal risks based on assessment reports, and the transaction closed.

A third abandoned gas station site sold at fair market value. The new owners did not want to contend with any petroleum contamination risks, even though assessment reports indicated minimal third-party liability risks at the eligible site. The seller indemnified the owner and agreed to pursue remediation at reasonable costs and within a reasonable period of time. The former owner is undertaking voluntary cleanup activities without FDEP funding per the terms of the sales contract.