Story and Photo By Joe Zlomek

Pennsylvania's adoption of the Uniform Environmental Covenants Act (UECA) earlier this year likely means big changes are in store for real estate developers and others who deal with so-called "brownfields" properties. The UECA, which was signed into law as Act 68 in December 2007 and took effect this February, gives the state long-term leverage in ensuring land owners properly clean and remove hazardous contaminants from their property.

The law allows the state to create legal covenants covering the removal or containment of contamination, and restrictions on land use, that accompany a deed and are binding on subsequent property owners. The covenants cannot be negated by other real estate laws, and exist in perpetuity until terminated by state law.

More importantly, however, the law also gives the state and affected municipalities the right to sue property owners if they fail to follow agreed-upon guidelines for hazardous property remediation. This enforcement right represents a sharp set of new teeth for regulators and municipal officials.

UECA also presents a benefit for real estate licensees: it helps them avoid potential disclosure issues regarding land contamination. Clean-up covenants should show up in future title searches, and the title insurer or other parties will notify potential buyers of their obligations.

Brownfields are lands known, or considered, to be contaminated by pollutants hazardous to the environment. Brownfield properties include waste holding sites, former and current industrial properties, some landfills, and other parcels that pose potential dangers to public health. During the last decade, the clean-up and re-use of brownfields properties has been a profitable business for some real estate investors.

By relying on the UECA to tie environmental remedies to the land's title, the state creates an enforceable trail of recourse that ensures current and future property owners are held responsible for clean-ups. "This measure will protect the public health and give businesses the confidence they need to invest in these sites and return them to productive use," Kathleen A. McGinty, secretary of Pennsylvania's Department of Environmental Protection (DEP), said Feb. 19 (2008) in a press release that marked the law's launch.

Pennsylvania has thousands of documented brownfields as a result of its long history as a manufacturing and mining state. It also has been among the leaders in trying to address brownfield remediation. It became the 21st state to adopt UECA, which was drafted by the National Conference of Commissioners on Uniform State Laws (NCCUSL).

Michael Kerr, NCCUSL legislative director, notes that "cleaning" or remediating a property is often misconstrued by the public to mean a complete or thorough removal of all contaminants. While that happens on occasion, Kerr acknowledges, 100-percent clean-ups sometimes are either impractical or too costly. In those cases, Kerr told a writer for "The Pennsylvania Realtor," it's in the public interest to scrub properties to levels that provide public safety for specific uses. Partial or complete environmental clean-ups may involve engineering measures like containing contaminants with physical barriers and water-tight caps, or limiting property uses like forbidding wells for drinking water.

Some states in the past lacked a tracking and enforcement mechanism to ensure that satisfactory engineering solutions were continued and maintained once put in place, no matter owned the land. Adoption of the UECA gives Pennsylvania that follow-up and enforcement ability.

The legal covenants are recorded in counties where affected properties are located. Covenants are signed by property owners and DEP representatives at the time remediation requirements are put into place. To ensure members of the public, as well as buyers, are aware of signed covenants the state has begun creating what it calls an Environmental Covenant Registry.

A DEP press release reports the registry will include information on each property’s location, including county, municipality, and other location information; the date the covenant was recorded by a county recorder of deeds; and a list of engineering and institutional controls required for any cleanup conducted under Pennsylvania’s applicable environmental laws.

Until the registry is fully up and running, the DEP plans to post a list of covenants on its website.

Before Act 68, Pennsylvania law mandated that either notices or restrictions regarding clean-ups be placed into deeds at the time properties were conveyed, according to a Jan. 14, 2008, blog entry by M. Joel Boelstein, an attorney at the environmental law unit of the Fox Rothschild LLP law firm in Philadelphia. With Act 68 in effect, Boelstein's blog added, the covenants must be drafted by lawyers for their respective clients and approved by the DEP ... complete with the recorded signature of a DEP administrator.

Developers, investors and businesses that buy formerly contaminated land which has been remediated, or "recycled," demand some assurance that they won't be held liable for problems previously caused by contaminating pollutants. Being able to track active covenants helps preserve their releases from liability, according to the DEP. In addition, it says, having the UECA adopted nationwide gives multi-state businesses confidence that the law works the same way in all affected states.

To that end, according to the DEP, the state has written a fill-in-the-blanks model covenant on which future remediation agreements will be based, and a model notice to the public that a covenant has been created. The paperwork emulates NCCUSL recommendations already in place in other states that adopted UECA. An overview of Act 68, and the paper "tools" the state is making available for its implementation, are available at DEP's website. To reach them, visit www.depweb.state.pa.us; search for the keyword "Land Recycling," and click on “UECA” on the right side of the page. 

Statements from the DEP regarding implementation of the UECA indicate it will require that property owners to periodically submit to the state written proof that they are abiding by the covenants' restrictions and limitations. Blogger Boelstein on Feb. 12 wrote that he believes "property owners will need to be given explicit instructions by their outside environmental counsel or consultants to identify all continuing obligations, and it will then be the property owner's responsibility to comply with those future reporting obligations." 

Ironically, for several weeks before Act 68 was signed by Gov. Ed Rendell, it looked as if the state's brownfields program might have to close down. Boelstein reported in a Dec. 26, 2007, blog entry that DEP was running out of money allocated for hazardous sites cleanups and nearly 150 DEP staffers feared losing their jobs. That money and more has been re-stored through 2010, Boelstein wrote.