PADEP Clarifies That UECA Covenant Not Required When Meeting Act 2 Non-Residential Statewide Health Standard

October 2010Newsletters In the Zone

In December 2007, Pennsylvania adopted the Uniform Environmental Covenants Act (UECA). Under UECA, a person remediating contaminated property in Pennsylvania is required to place an environmental covenant in the deed when the remediation requires an activity and use limitation to attain an Act 2 standard. The environmental covenant runs with the land and imposes restrictions on the future use of the property. Many property owners would prefer there not be any environmental covenant in the deed because PADEP typically includes periodic reporting obligations in the covenant that continue in perpetuity.

One of the three remediation standards available to a remediator under Act 2 is the Statewide Health Standard (SWHS), a set of charts that provides cleanup standards based on the media (soil or groundwater) and the property use (residential or non-residential). If a property owner can demonstrate through sampling that the levels of contamination present on a site are at or below the residential SWHS, then under Act 2, no deed notice is required and no covenant is required under UECA because no activity and use limitations are needed to meet the standard. Prior to UECA, when a property met the non-residential SWHS, a notice would need to be put into the deed noting the property had been remediated to the Act 2 non-residential SWHS and restricting future property use to non-residential, absent additional efforts to remediate to the residential SWHS. That notice is considered an institutional control. When PADEP originally interpreted UECA, it decided any institutional control, including a deed notice put in place after an Act 2 remediation to the non-residential SWHS, would be considered “an activity and use limitation” that triggered the need for a UECA covenant. That interpretation has been continually objected to by property developers and the business community.

In August, PADEP revised its fact sheet on UECA and, for the first time, noted a UECA covenant is not required when a remediator uses an institutional control to meet the Act 2 non-residential SWHS. The facts sheets can be found on the UECA page of PADEP’s web site at http://www.portal.state.pa.us/portal/server.pt/community/land_recycling_program
/10307/uniform_environmental_covenants_act/552045
.

I expect the UECA regulations, which should be issued in final form very shortly, may further clarify this. The bottom line is you no longer have to submit an environmental covenant when the levels of contamination on a property exceed the residential SWHS but are at or below the non-residential SWHS and you have demonstrated attainment of the Act 2 non-residential SWHS. If one of PADEP's regional offices directs you to submit an environmental covenant in these circumstances, you should refer them to the revised fact sheet. I am not sure if this means property owners who previously submitted UECA covenants for such properties can remove those from the deed and no longer be obligated to comply with any reporting requirements imposed in the covenant. If you fall into that category and you would like to pursue that, please contact me and I can follow up with Troy Conrad, the Director of the Act 2 Program in Harrisburg.

For more information, please contact M. Joel Bolstein at 215.918.3555 or [email protected].