(a)  (1)  Except as provided in Sections 25548.4 and 25548.5, a person, by reason of acting in the capacity of a lender, shall not be liable under any state or local statute, regulation, or ordinance to the extent of either of the following:

(A)  To the extent that the statute, regulation, or ordinance requires the person to take a removal or remedial action, pay a penalty, fine, imposition, or assessment, or to forfeit the property specified in paragraph (2), and that liability arises from the release or threatened release of hazardous materials, at, from, or in connection with the property.

Terms Used In California Health and Safety Code 25548.2

  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Damages: includes compensatory damages, exemplary damages, punitive damages, and costs of every kind and nature, including, but not limited to, costs of a removal or remedial action. See California Health and Safety Code 25548.1
  • Finance lease: means a transaction with respect to which both of the following apply:

    California Health and Safety Code 25548.1

  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Foreclosure or its equivalent: means the acquisition of property by a lender through any of the following:

    California Health and Safety Code 25548.1

  • Indicia of ownership: means evidence of a security interest, evidence of an interest in a security interest, or evidence of an interest in real or personal property securing a loan or other obligation, including, but not limited to, any legal or equitable title to real or personal property acquired incident to foreclosure or its equivalent. See California Health and Safety Code 25548.1
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lender: includes either of the following persons:

    California Health and Safety Code 25548.1

  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: includes , but is not limited to, any city, county, district, the state, or the federal government, or any department, subdivision, or agency thereof. See California Health and Safety Code 25548.1
  • Primarily to protect a security interest: means that the indicia of ownership of a lender are held primarily for the purpose of securing payment or performance of an obligation. See California Health and Safety Code 25548.1
  • property: includes any real or personal property in which the obligor has or had an ownership, leasehold, or possessory interest, whether or not it was the subject of a security interest for the loan or obligation. See California Health and Safety Code 25548.1
  • Removal: means the cleanup or removal of released hazardous materials from the environment or the taking of other actions that may be necessary to prevent, minimize, or mitigate damages that may otherwise result from a release or threatened release, as further defined in Section 101(23) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U. See California Health and Safety Code 25548.1
  • Security interest: means an interest in a property created or established for the purpose of securing a loan or obligation. See California Health and Safety Code 25548.1
  • State: means the State of California, unless applied to the different parts of the United States. See California Health and Safety Code 23
  • Statute: A law passed by a legislature.

(B)  To the extent that the statute, regulation, or ordinance authorizes damages arising from the release or threatened release of hazardous materials, at, from, or in connection with the property specified in paragraph (2).

(2)  The exemption from liability provided by paragraph (1) shall apply to the following property:

(A)  Property in which the lender maintains indicia of ownership primarily to protect a security interest.

(B)  Property that was acquired by the lender through foreclosure or its equivalent.

(C)  Property that is owned, leased, possessed, or used by a person who is obligated to the lender under a loan or obligation and in which the lender holds no security interest.

(b)  A lender who did not participate in the management of the property prior to foreclosure or its equivalent may sell, re-lease property held pursuant to a finance lease, whether by a new finance lease or by substitution of the lessee, liquidate, maintain business activities, wind up operations, undertake any response action under Section 107(d)(1) of the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. § 9607(d)(1)) and take measures to preserve, protect, or prepare the property prior to sale or other disposition. The lender may conduct those activities without voiding the exemption set forth in subdivision (a), subject to the requirements of subdivision (a) of Section 25548.5. However, the lender may be liable for damages, as defined by this chapter, that occur as a result of the lender’s gross negligence or willful misconduct in the lender’s performance of a response action under Section 107(d)(1) of the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. § 9607(d)(1).

(Added by Stats. 1996, Ch. 612, Sec. 1. Effective January 1, 1997.)

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