Secured creditors are allowed to foreclose upon contaminated collateral without incurring CERCLA or TSWDA liability. Foreclosure includes a purchase at a foreclosure sale or a deed in lieu of foreclosure.
The secured creditor exemption continues to apply after foreclosure if the secured creditor seeks to dispose of the property in a “reasonably expeditious manner” using whatever commercially reasonable means that are relevant or appropriate concerning the property. A secured creditor should list and advertise the property within twelve months from the time the secured creditor acquires marketable title to the property. Listing and advertising is not required, but provides proof of efforts made to dispose of the property.
A secured creditor has a duty to accept an offer of fair consideration for the property. The secured creditor cannot outbid, reject, or fail to consider any offer of fair consideration. Fair consideration is defined as the value of the security interest, which includes the outstanding unpaid principal, interest, rents, and penalties, together with reasonable and necessary costs incurred by the secured creditor, less amounts received. It does not encompass the concept of fair market value because the rationale behind the secured creditor exemption is that the property serves as security for a debt, not as an investment vehicle. The rule requires the secured creditor to act within 90 days of receipt of a written bona fide firm offer of fair consideration. This is defined as a legally enforceable, commercially reasonable cash offer from a ready, willing, and able purchaser.