Alabama follows Environmental Protection Agency (EPA) guidelines and has programmes to ensure proper environmental management in all areas. Most environmental programmes are managed by the Alabama Department of Environmental Management (ADEM). Alabama’s state environmental statutes are collected in Title 22 of the Alabama Code of 1975. Some cities, such as Birmingham, Mobile, Huntsville and others have environmental programmes focused on their municipal jurisdictions.

ADEM was established in 1982 by the Alabama Environmental Management Act. It was formed to consolidate air, water and land pollution oversight into one agency. It also oversees coastal management, mining reclamation, water well management and public health issues related to environmental exposure. It co-ordinates with the Alabama Department of Public Health (ADPH) on issues like fish consumption advisories and water quality that could affect public health. ADPH oversees radiation protection and licensing through its Office of Radiation Control. ADEM administers all major federal environmental laws in Alabama. The Alabama Oil and Gas Board regulates oil and gas exploration and environmental practices at exploration sites. The Alabama Department of Conservation and Natural Resources plays a role in coastal management and resource protection. Although ADEM administers federal laws and regulations, EPA Region 4 has jurisdiction for oversight and enforcement. Some larger counties such as Jefferson County have primary permitting authority for certain Clean Air Act programmes within its borders.

Although ADEM is responsible for compliance and enforcement, it has programmes available to assist permit applicants or holders. It holds frequent meetings around the state on issues like permits applications, surface water programmes and issues periodic news releases. Its website provides forms, public records and notices of public events. It also invites public reporting and complaints. ADEM manages a Brownfields/Voluntary Cleanup Programme that allows site remediation under agency oversight. Upon satisfactory completion, participants may receive liability assurances (eg, covenants not to sue) that can benefit owners and prospective purchasers. Alabama also recognises an environmental audit privilege and limited immunity framework for qualifying self-audits and timely corrective actions, subject to exceptions (eg, where there is imminent and substantial endangerment, criminal conduct or repeated non-compliance).

ADEM is the primary agency in charge of protecting environmental assets in Alabama. It shares most of its responsibilities with the EPA. In addition, the Alabama Department of Conservation and Natural Resources (ADCNR) is in charge of the state’s parks and manages wildlife, freshwater fisheries, marine resources and state lands.

A party breaching environmental protection rules is subject to civil fines, orders for corrective actions and, in some cases, criminal penalties. ADEM is primarily responsible for enforcement. Private civil liability is also possible where individual, as opposed to state-owned, rights are violated.

ADEM is charged with administering, enforcing, and ensuring compliance with Alabama’s environmental statutes and the permits issued under them. ADEM may issue notices, orders and permits; hold hearings; and enforce environmental requirements across air, land and water programmes. The Department has statutory authority to enter regulated facilities during reasonable hours to inspect, investigate, obtain samples, monitor operations, and examine or copy required records to assess compliance. The right to enter and inspect is embedded across the programmes ADEM administers, including solid waste management facilities and materials recovery facilities, hazardous waste generation, transportation, treatment, storage, or disposal facilities, and permitted air sources. Where a facility is subject to an ADEM permit or regulatory programme, on-site inspections and records access do not require a court order or third-party approval. They are authorised by statute and implemented by permit conditions and programme rules.

When ADEM believes a violation has occurred, it may issue a Notice of Violation and, where appropriate, an administrative order assessing civil penalties or requiring corrective measures. Before issuing a civil penalty order, ADEM provides written notice of the alleged violation and an opportunity for an informal conference with the director or designee. If ADEM proceeds to a penalty order, that order will include findings of fact and be served consistent with applicable procedural requirements, and the respondent may request a hearing before the Alabama Environmental Management Commission (EMC) within 30 days. The EMC’s order approving, modifying or disapproving ADEM’s action constitutes the Department’s final action and is subject to judicial review on the administrative record within the time specified by statute. ADEM may also file civil actions, seek injunctive relief, and co-ordinate with the Attorney General as provided by law.

Approval procedures for investigations and access are grounded in statute. Routine compliance inspections and document requests are conducted under ADEM’s statutory authority and permit conditions. They do not require separate judicial pre-approval. If a facility refuses lawful entry or production of records, ADEM may seek judicial enforcement or other remedies provided by statute and rule.

ADEM’s permitting functions are centralised in its Permits Division and carried out under the Alabama Environmental Management Act and specific statutes for air, water, solid waste, hazardous waste, coastal resources and related programmes. The Department issues permits, licences, certifications and approvals to control emissions to air, discharges to waters of the state and management of land-based activities, including solid and hazardous waste, consistent with federal and Alabama standards.

Public participation is an integral part of permitting. Draft permits are noticed for public comment under programme-specific rules. For example, major air construction and Title V operating permits are subject to public notice and comment; solid waste permitting provides for notice, receipt of public comments, responses to comments, and Department action; and hazardous waste permitting incorporates Federal public participation requirements.

If ADEM denies a permit application or issues a permit with conditions an applicant contests, that administrative action may be appealed to the EMC by filing a timely hearing request, typically within 30 days of the contested action. The EMC may conduct the hearing itself or through a hearing officer, and issues a final order approving, modifying or disapproving ADEM’s action, which is then subject to judicial review on the administrative record within the statutory time frame.

ADEM has a graduated but firm approach to compliance and enforcement. When a violation is identified, ADEM may issue a Notice of Violation and, where necessary, administrative orders requiring abatement, mitigation, cessation of activity, cleanup and/or the assessment of civil penalties. For orders assessing penalties, ADEM provides an opportunity for an informal conference before issuance and provides notice and appeal rights as described above. ADEM may resolve matters through consent orders and, where applicable, civil penalties, consistent with its statutory authority to issue orders and settle enforcement actions. In appropriate cases, ADEM or the Attorney General may initiate civil actions seeking injunctive relief, damages or penalties. Programme rules also provide for programme-specific transparency and public notification, and ADEM maintains public records and provides public access to permit and enforcement files on its website consistent with its administrative rules.

The EMC develops and adopts environmental rules, regulations and standards proposed by ADEM, and hears appeals of ADEM’s administrative actions. EMC proceedings operate under Commission rules of procedure, provide for presentation of evidence consistent with the governing statutes, and culminate in final orders that are reviewable in circuit court as provided by law. 

Permits transfer but they do not travel. A permit for a particular location can be transferred to another person or business, but a permit that applies to a particular location cannot be transferred to another location. The transferability of permits is programme-specific and governed by the applicable statute and administrative rules for each programme.

• Hazardous waste permits – Alabama’s hazardous waste permitting programme follows federal Resource Conservation and Recovery Act (RCRA) and EPA requirements. Changes in ownership or operational control are addressed through permit modification or reissuance under the hazardous waste permit rules.
• Solid waste and related land programmes – solid waste permitting rules provide post comment actions (issuance, denial, or requests for additional information) and include procedures for permit modification, suspension or revocation. Appeals are to the EMC.
• Air permits – air permitting programmes distinguish between construction permits and operating permits. Ownership or operator changes are handled through programme-specific administrative procedures.

Because transfer requirements vary across programmes, the controlling permit and programme rule will determine whether a permit may be transferred, whether a modification or reissuance is required, whether demonstrations (eg, financial assurance) must be made, what public notice applies, and what timing and application content are necessary. Operating without proper permit coverage during or after a change in ownership or operation may constitute a violation and expose the operator to enforcement.

In addition to Consent Orders and civil fines, ADEM can revoke a permit for non-compliance with permit terms, failures to disclose information relevant to a permit, or operational changes.

Regulated entities face civil and administrative liability for violations of applicable statutes, permits and regulations, with penalty exposure calibrated at times to the nature, duration and severity of the violation. Criminal liability can arise from knowing, intentional or grossly negligent conduct. For contamination matters, responsibility in Alabama is programme specific, but compliance-based duties and cost recovery from “responsible” or “liable” parties are often imposed. Liability can be proportional to contribution, such as through the Hazardous Substance Cleanup Fund statute. Transporters and owners/operators face programme-specific duties and financial responsibility rules, such as specific insurance and permitting requirements. Common law claims, like nuisance, negligence, trespass and personal injury, are generally preserved, and regulatory compliance does not, by itself, bar tort recovery.

Liability for historic environmental incidents or damages is governed by a combination of state and federal laws. Liability can be imposed on current owners and operators for historical releases by virtue of their status. Prior owners and operators may also be liable for releases that occurred during their tenure. Applicable laws seek to hold responsible parties accountable for their environmental impact and ensuring remediation and compensation. Alabama provides for risk-based remediation, allowing remedies tailored to site-specific conditions and exposure scenarios. Other state statutes may apply depending on the nature of the release (eg, oil and gas operations, coastal resources). 

Alabama provides for response and cleanup obligations, administrative and civil penalties and potential third-party claims. Civil liability is available for injured parties. Defences are fact specific and may include compliance with permits and regulatory standards, lack of causation or proof of substantial damage, force majeure and divisibility/allocation arguments. ADEM has authority to assess civil penalties for violations of environmental laws, permits and regulations. Criminal liability is also a potential outcome in certain circumstances, primarily related to false reporting.

Liability for environmental damage or breaches of environmental law is not impacted by corporate form in the state of Alabama. Like individuals, corporations may be held liable for violations of Alabama and federal statutory law as well as common law torts. Punitive damages are available under Alabama law for conduct that is found to be wanton and may be awarded against corporations in an amount to punish for past conduct and deter misconduct in the future. With respect to regulatory penalties, Alabama follows the US EPA’s requirement that it perform an assessment of the economic benefit realised from a violation, which can impact corporations disproportionately to individuals. In addition, repeat or significant non‑compliance can result in increased penalties and more stringent permit conditions. 

Alabama does not impose standalone environmental taxes. Instead, the state assesses fees and requires the purchase of permits for specific purposes/activities, including solid and hazardous waste permitting, air emissions fees, wastewater and stormwater permitting, and other facility and pollution programmes. 

Alabama offers tax incentives and exemptions for pollution control and environmental protection investments. Equipment, systems and other technology investments that are used to reduce or control pollution may qualify for property tax relief. Sales and use tax exemptions are an option for certain materials, equipment and items acquired or held primarily for environmental protection purposes. Alabama also has statutory tax abatement programmes available for certain industries that apply to construction-related sales. These programmes are all overseen by the Alabama Department of Revenue. 

Traditional veil‑piercing standards apply. Parent companies and related entities may not be held liable for the conduct of a subsidiary or other affiliated corporation unless they exercise sufficient control over the function in question such that the two entities are fairly treated as one or there are other grounds to disregard the corporate form under common law principles. Shareholder liability is inapplicable unless the shareholder is personally and directly involved in the conduct at issue. 

Alabama recently passed an “anti-ESG” law that prohibits the state government from contracting with companies under certain, specific conditions when those companies refuse to do business or otherwise penalise another company for economic activity that does not meet environmental or social justice criteria. Consistent with that approach, there is no mandatory ESG reporting regime in Alabama. Companies may voluntarily publish their own ESG reports, however, and they may also engage in ESG corporate responsibility initiatives (including refusal to do business with entities meeting stated criteria) if they do not intend on contracting with the state government. 

Alabama does not require environmental self-audits as a matter of statutory law. Certain regulatory programmes mandate annual reporting to ADEM, some of which involve audit-like reviews. Other legislative programmes enacted by the state encourage companies to perform voluntary self-assessment and rehabilitation of owned properties. One example is the Land Recycling and Environmental Redevelopment Act, which provides incentives and related limitations on liability for companies that implement property assessment and cleanup plans approved by ADEM. Additionally, self-reporting and correcting violations may be considered by ADEM in determining the amount and nature of regulatory penalties. Otherwise, Alabama has not established any statutory self-auditing privilege. Discovery and disclosure protections for audit-related materials are governed by state and federal rules of evidence and procedure. 

Alabama state law imposes the traditional duty of good faith on directors and officers. Liability otherwise follows traditional common law principles. A director or officer’s personal liability may arise if personally and directly involved in the conduct at issue or if the director or officer otherwise knowingly controls or approves the violations giving rise to liability. 

Alabama allows for insurance coverage to protect against environmental liabilities for companies, although the extent of such protection heavily depends upon coverage terms and is often subject to specific exceptions or exemptions within the policy. Companies are also free to insure individual directors, officers and employees against those same liabilities. Individual insurance coverage for environmental liabilities is rare, however. Due to the significant sensitivity to terms, all policies should be carefully reviewed to ensure that coverage is sufficient for individual and corporate needs.

Pollution legal liability (PLL) insurance is available in Alabama and can be structured on a site-specific or portfolio basis. PLL may cover unknown pre-existing conditions (subject to underwriting), third-party bodily injury/property damage, cleanup costs and business interruption. Common exclusions include voluntary sampling outside a regulatory directive, known conditions, intentional acts, USTs, certain lead/asbestos exposures, PFAS, contractual liabilities and changes in use. Representation and warranty insurance may, in appropriate transactions, backstop environmental representations, subject to customary exclusions. For historical releases General Liability (GL) policies may not contain broad pollutions exclusions and may provide coverage, particularly if issued before the mid-1980s.

Alabama has adopted federal principles with respect to lender liability for environmental contamination. Lenders are generally shielded from liability for holding security interests in real property, facilities or equipment that is used to store or treat hazardous waste or other potential environmental contaminants. Exceptions exist if the lender participates in management of the property in question or exercises control over its operation. Alabama’s clean‑up framework also mirrors federal safe harbour laws, with a focus on timely divestiture of contaminated property after a foreclosure and avoidance of post‑foreclosure pollution creation or exacerbation. 

Alabama law includes statutory protections for lenders with the goal of encouraging financing for real property transactions that promote economic redevelopment and site rehabilitation of contaminated properties. Lenders should understand the scope of those protections as well as the federal law standards upon which they are based. Additional protections may be found in contract law and the broad use of indemnity and similar contractual covenants. Prior to issuing financing, lenders should focus on performing comprehensive due diligence on potential borrowers as well as the property in question. Post-financing monitoring of the collateral is also advisable, as is use of intermediaries to manage and divest of collateral in the event of foreclosure. 

Statutory claims for environmental damage may be available to a plaintiff under Alabama law depending on the circumstances, the specific statute at issue, and whether the plaintiff can make the required showing of standing to bring the claim. Alabama’s nuisance statutes codify common law principles. Common law claims are often asserted in environmental disputes, such as nuisance, negligence, trespass and fraud. Transactional claims for environmental damage can include statutory or common law fraud and breach of warranty/contract.

Punitive damages are allowed in Alabama if there is proof by clear and convincing evidence of fraud, malice, wantonness or oppression. Such damages are intended to punish the defendant and deter similar conduct in the future. Punitive damages are not intended to compensate a plaintiff for a loss. Alabama has statutory caps on punitive damages for certain types of claims depending on the net worth of the corporate defendant (Ala Code §6-11-21). Alabama courts are more likely to uphold limitation of liability clauses that waive punitive damages in commercial contracts if they are clearly written, are not unconscionable, and do not otherwise violate public policy. However, these waivers are not bulletproof and can be deemed unenforceable in certain circumstances.

Class actions and multi-plaintiff/mass tort suits are permitted under Alabama procedures and may be used in environmental and toxic tort matters.

Several decisions are significant in the analysis of environmental claims applying Alabama law. Borland v Sanders Lead, an air and particulate matter case, compared the elements of both trespass and nuisance claims, and also set out the elements of an indirect trespass claim. The Borland case also made clear that compliance with environmental statutes does not shield a defendant from liability for damages. Russell Corp. v Sullivan analysed trespass and nuisance claims in the water pollution context, pointing out the distinction between public and private nuisance and emphasising that proof of “actual substantial damage” is required to prevail on a trespass claim. Later decisions, including West Morgan-East Lawrence Water & Sewer Authority v 3M, continue to follow Borland and Russell Corp. in the context of “newer” alleged pollutants like PFAS. In the personal injury context, Hinton ex rel. Hinton v Monsanto recognised that Alabama requires a manifest, present injury before a plaintiff can recover in tort. Black Warrior Riverkeeper v East Walker County Sewer Authority confirmed the right of any person with an interest that is or may be adversely affected to intervene as a matter of right in any civil action brought by ADEM pursuant to Ala. Code §22-22A-5 (18)b.

Alabama is a joint and several liability state. Apportionment of judgments is not allowed, and there is no contribution or common law indemnity in Alabama. See “Phelps & Johnson, Indemnity in Alabama Products Liability cases” (34 Alabama Law Review 1:23). Actions for contribution are not allowed. Indemnity is allowed under very specific circumstances. Express contractual agreements can be enforced if a party agrees to compensate another party for any losses, including that party’s own negligence, “if the contract clearly indicates an intention to indemnify against the consequences of the indemnitee’s own negligence... and there is not shown to be evidence of a disproportionate bargaining position in favor of the indemnitee” (Industrial Tile, Inc. v Stewart, 388 So.2nd (Ala. 1980)). See generally, “Roedder, Contractual Indemnity in Alabama” (33 Ala.L.Rev. 31), Industrial Tile, Inc. v Stewart, 388 So. 2d 171, 176 (Ala. 1980); Mobile Infirmary Ass’n v Quest Diagnostics Clinical Labs., Inc., 381 So. 3d 1133, 1141 (Ala. 2023).

Alabama does recognise an innocent landowner defence and a no causal relation defence, but under those doctrines no direct liability attaches to the party successfully asserting the defence. To prevail on an innocent landowner defence the landowner must show that all appropriate inquiries were made, and the owner must show that there was no reason to know that contamination existed. In products liability actions, the no causal relation defence was clarified in Alabama Code Section 6-5-521. If a party passed along a product it received from a manufacturer and did not alter it or exert control over its use after sale to another, the defence is available.

Alabama’s remediation programmes are generally aligned with federal CERCLA/RCRA frameworks, supplemented by ADEM’s Brownfields/Voluntary Cleanup Programme and Risk Based Corrective Action (RBCA) guidance. For oil and gas impacts, AOGB requirements and ADEM rules apply. ADEM uses its RBCA guidance document to drive investigation and remediation of contaminated sites, and allows risk-based closures that reflect site-specific exposure scenarios and land use. Institutional controls such as land use restrictions are typically required if a site cannot feasibly be remediated to below risk-based standards. 

Responsible parties typically include:

• current owners and operators (unless falling into narrow innocent purchaser exception);
• former owners and operators during periods of release;
• arrangers/generators; and
• transporters who selected the site or contributed to the release.

Contractual allocations may shift costs between private parties but do not prevent the state from pursuing any responsible party.

Liability for state-directed remediation is usually strict, joint and several. Allocation or contribution may be available among responsible parties based on equitable factors or divisibility of harm. The burden rests with the party seeking allocation. Civil liability in tort under nuisance, trespass and negligence theories may also exist if the contamination has impacted neighbouring properties.

The state may seek cost recovery and injunctive relief against responsible parties. Parties that incur necessary response costs consistent with applicable standards may seek contribution from others. Programme-specific authorities may provide additional remedies. Civil lawsuits by private plaintiffs seeking damages (and in some cases injunctive relief) are common in situations where environmental releases on one property impact adjacent property. 

Under ADEM regulations, detailed spill reporting and response duties are common across various programmes and environmental media. ADEM and AOGB maintain notification and cleanup requirements for oil and gas activities. Alabama enables self-directed remediation under agency oversight in certain circumstances and operates a brownfields/voluntary programme offering liability assurances upon completion. Alabama also administers a state superfund-type programme for non-federal sites.

Alabama does not have comprehensive state-wide climate change laws related to reduction of carbon emissions or climate change, but participates in federal efforts related to air quality, such as the Clean Air Act. In fact, the director of ADEM is prohibited by statute from proposing or promulgating new regulations intended to reduce greenhouse gases from specific sectors unless such reductions are required under existing statutes. The statute also prohibits the ADEM director from submitting to the EPA or any other federal agency any legally enforceable commitments with respect to greenhouse gas reduction, unless required by law (Ala. Code §22-28A-3). The statutory prohibition does not, however, prohibit voluntary activities related to greenhouse gas emissions.

In March 2024, Alabama announced its Preliminary Climate Action Plan (PCAP) that seeks to reduce greenhouse gas emissions by 25% over the next 25 years through voluntary activities using federal funds. Alabama also has various initiatives and incentive programmes available to promote the reduction of greenhouse gas emissions. 

ADEM implements and enforces the asbestos NESHAP in Alabama, including notification, work practice and waste-handling requirements for demolition and renovation projects. Alabama requires licensing/credentialing for asbestos abatement professionals, including training and record keeping. Civil personal injury litigation arising from historical asbestos exposures occurs in Alabama, but with far less volume and frequency than many jurisdictions.

PCB waste is regulated under federal TSCA; ADEM oversees related industrial solid waste management and disposal at permitted facilities consistent with federal requirements. Oil and gas PCB wastes are managed under ADEM and AOGB oversight as applicable. Fish consumption advisories for PCBs related to historical manufacturing and disposal sites exist in several Alabama waterways.

Alabama’s waste management programmes cover a wide variety of materials and sources, ranging from hazardous and non-hazardous solid and liquid waste to medical waste, metal and scrap, and other industry wastes. These programmes generally follow federal and EPA standards. Additionally, industrial operators typically require advance permits, which require meeting specific operational standards. ADEM sets and enforces key regulatory limits for these industries. 

Facilities and other generators of waste may be liable under Alabama law for mismanaged disposal of their wastes if found to be negligent or if environmental injury is attributable to those entities under common law principles. Recent lawsuits have sought to extend that liability to manufacturers of products with knowledge that their products could or would more likely than not be disposed of safely or without endangering the environment. Federal standards concerning waste disposal apply in Alabama, and both state and federal regulatory programmes impose continuing duties on facilities and other waste generators to avoid damaging releases during the disposal process. 

Alabama does not impose any specific requirement on manufacturers of goods to take back and recycle or dispose of those goods after sale. However, Alabama does offer many ADEM-sponsored or funded recycling programmes, and ADEM further encourages municipalities and other local governments to create their own recycling programmes through grants and various other incentives. Similar funding is available for private recycling centres. Alabama’s solid waste management plan also targets illegal dumping, further promoting recycling initiatives. 

Alabama waste operators are regulated, permitted and (if necessary) inspected by ADEM. They are further subject to federal standards for operations like hazardous waste disposal and wastewater treatment. Rights and obligations follow those federal standards. 

Alabama’s disclosure obligations largely track federal frameworks, and state-specific programmes should be examined for additional reporting requirements. Facilities operating in multiple jurisdictions should consider other states’ reporting mandates that may apply across the business.

Alabama law imposes broad incident reporting, and it is important to understand the relevant reporting requirements and ensure compliance in the event of a release. Failure to comply can result in significant penalties and fines. The types of reporting required includes the following.

• Discharges or releases that cause or may cause pollution to state waters require prompt notification (typically within 24 hours) to ADEM, in addition to any federal notifications (eg, National Response Center).
• Releases of hazardous substances at or above federal reportable quantities or which pose an actual or potential threat to human health, welfare or the environment must be reported in accordance with federal and state law, including the National Response Center (NRC), ADEM, the Alabama Emergency Response Commission (AERC) and Local Emergency Planning Committee (LERC). The specific reporting requirements and procedures are included in the state’s Emergency Planning and Community Right-to-Know Act (EPCRA) and ADEM regulations. 
• Releases from underground storage tanks (USTs) require immediate or prompt notice to ADEM, usually within 24 hours, with follow-up investigation and corrective action.
• Oil and gas operators must promptly report significant spills, fires, leaks or breaks to appropriate state authorities (including Alabama Oil and Gas Board and ADEM), followed by written reports detailing circumstances and volumes.

Public information can be obtained through the “eFile” search on the ADEM website. The eFile system provides options to search by permit number, county and facility name, among other variables. ADEM also allows a review of public records by submission of a written request to the ADEM Public Records Officer. State law allows reasonable fees to be charged in connection with processing public records requests. Public notices, information about upcoming hearings and videos of public hearings also are available on ADEM’s website.

As of 1 October 2024, Alabama business (corporations, LLCs, limited partnerships and all other business entities previously subject to annual reporting) no longer have to file annual reports (Alabama Act No 2024-213).        

Alabama offers various incentives, grants, tax credits and programmes that provide financial assistance to individuals and entities to support clean energy and decrease energy waste. Entities should consult the Alabama Department of Revenue for potential tax-related credits and incentives. The Alabama Department of Economic and Community Affairs (ADECA) likewise provides information about potential financial and funding opportunities for green initiatives. For example, the State Energy Program (SEP) is a good source for potential funding and technical assistance, and information is available about the SEP on the ADECA website. Some cities and county governments within Alabama have adopted regulations and/or incentives for sustainable projects. Public bodies in Alabama may also be eligible for certain state-revolving funds such as the Clean Water State Revolving Fund and the Drinking Water State Revolving Fund.

It is typical to conduct environmental due diligence as part of merger and acquisition, finance and property transactions in Alabama depending on the nature of the transaction and the property type. Companies often hire consultants to perform Environmental Site Assessments (ESA) to determine potential environmental risks to property and can include both a Phase I (non-intrusive evaluation of potential environmental liabilities) and Phase II evaluation (conducted to confirm the presence and extent through physical testing when Phase I indicates potential contamination).  It is important to conduct additional diligence into permits, licences, approvals and compliance history for a subject property for the local, state and federal level. With respect to environmental covenants, ADEM maintains a Registry of Environmental Covenants that is available to the public upon request. Alabama’s wetlands and coastal areas also often require particular attention due to the critical ecological issues involved. When wetlands are involved, Alabama has two primary agencies that regulate those areas: ADEM and the Alabama Department of Natural Resources (ADCNR). Certain Alabama counties where coastal or wetland areas are found often have established wetland rules that are important to consider.

Although Alabama is a caveat emptor state and has no general state-level disclosure requirement, conditions affecting health and safety must nevertheless be disclosed. This includes things such as lead-based paint, asbestos, mould or radon. The Alabama Department of Environmental Management plays a critical role in the regulatory framework affecting property in the state. The Alabama Real Estate Commission website contains further information about environmental issues in property transactions, as does the Alabama Department of Public Health. Alabama’s fraud and consumer protection statutes provide potential recourse for a purchaser who claims material disclosures were known but not made. Note that caveat emptor typically does not apply to new builds.

Coastal regions in Alabama typically have stricter regulations related to development, so it is important to thoroughly review and understand local laws, in addition to state and federal laws. With any transaction, however, it is important to evaluate potential on-site liabilities as well as compliance with various environmental permits.