Question

The Colorful Paint dumped the excess paint into a pit behind the building. This practice contaminated the property. If the bank foreclosed on the factory, would the bank be liable for cleanup costs of the contaminated land?

A) Yes, because it owns the property
B) No, because it was an innocent landowner.
C) No, because it did not contaminate the property
D) No, because it was a secured creditor

Answer 1

C) No, because it did not contaminate the property.

Step-by-step explanation:

The bank is not liable because they foreclosed the property because the previous owners did not pay a debt, and it was the most logic way to recover their money. The bank didn't get the land because they wanted to, instead they were forced to.

If the bank had bought the property, they would be liable because they should have conducted all reasonable inquiries into previous ownership (since the previous owner was a factory) to find out if the land was contaminated or not.