PA Enacts Uniform Environmental Covenants Act

January 16, 2008
by MATTHEW SULLIVAN
Client Alert Newsletter Forecast 2008

In December 2007, Pennsylvania enacted the Uniform Environmental Covenants Act ("UECA"), which imposes new requirements for environmental covenants where engineering or institutional controls are currently or will be used to demonstrate compliance for cleanups pursuant to Pennsylvania's Land Recycling and Environmental Remediation Standards Act ("Act 2") and Storage Tank and Spill Prevention Act ("Tank Act"). While UECA does not impose any substantive change on the type or extent of cleanup that must be performed under these laws, it does recognize their validity in the Commonwealth as a matter of real property law, establish new content and recording requirements for these instruments, and mandate approval and execution by the Pennsylvania Department of Environmental Protection ("PADEP"). UECA also imposes new limitations on the amendment or termination of environmental covenants; going forward, such acts will typically require that numerous parties consent to the proposed change or termination. Importantly, UECA applies both prospectively and retrospectively, so that by 2013 any existing instrument that imposes engineering or institutional controls to demonstrate compliance with Act 2 or the Tank Act must be converted to an environmental covenant that complies with UECA.

In addition to reviewing and signing all new and revised environmental covenants prepared in compliance with UECA, PADEP also must now create a registry of these instruments and any amendments or terminations. UECA also provides that PADEP's failure to approve (e.g., by signing) or deny an environmental covenant within 90 days will result in a "deemed approval." Given our past experience with other statutes containing deemed approval provisions, however, we do not expect PADEP to allow many deemed approvals. Finally, UECA empowers Pennsylvania's Environmental Quality Board to develop and promulgate implementing regulations.

While UECA is designed ultimately to standardize the content of environmental covenants, ensure their enforceability, and provide a registry to easily determine whether a particular property is subject to such covenants, it is currently unclear how PADEP will apply some of the legislation's provisions. For the moment, PADEP has posted on its web site (www.dep.state.pa.us, go to DEP Programs (A-Z), click on "Land Recycling") a fact sheet on the new law and model environmental covenant and notice language. We expect implementing regulations to provide further clarification.