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Midwestern Market Report
Ohio First State to Enact Uniform Environmental Covenants Act
A new state statute that enforces restrictions on the use of brownfields is
now the law in Ohio. Ohio Governor Bob Taft signed HB 516, the Uniform Environmental
Covenants Act (UECA), on December 22; the law went into effect immediately.
UECA, drafted and approved by the National Conference of Commissioners on Uniform
State Laws (NCCUSL), establishes requirements for a new valid real estate document
– an “environmental covenant” – to control the future
use of brownfields when real estate is transferred from one person to another.
“The Uniform Environmental Covenants Act provides a clear mechanism for
the states to create, enforce, modify and terminate environmental covenants
to control the use of contaminated real estate and permit safe re-use of that
property,” said Michael Kerr, Deputy Legislative Director of NCCUSL. “The
Act makes it possible for owners to transfer property knowing that the restrictions
that need to be kept on that property will be respected.”
An environmental covenant is typically used to place enforceable controls on
a property following the completion of an approved remediation. While the general
goal of most cleanups is to return a site to a condition where it can be safely
used for any purpose, this is not always technically possible or economically
practical. Then, use restrictions and institutional controls may be imposed
on the real estate to supplement cleanup measures. Restrictions limit use to
safe use.
UECA applies traditional real estate law principles to create environmental
covenants that ensure enforcement of valid land use restrictions against subsequent
owners of the property as long as necessary, no matter how many times the affected
real estate is transferred. State and federal environmental agency approval
is required as part of the covenant, and it is recorded as part of the title
to the property.
Although nearly half of the states have some sort of law providing for land-use
restrictions, UECA includes a number of provisions absent from most existing
state statutes. UECA ensures that a covenant will survive despite tax lien foreclosure,
adverse possession, marketable title statutes, and a host of other common law
doctrines that might otherwise inadvertently extinguish an intended land use
control.
The Act also provides detailed provisions regarding termination and amendment
of older covenants, and includes important provisions on dealing with recorded
interests that have priority over the new covenant.
UECA was introduced in 2004 in Nebraska, Ohio, and Pennsylvania. Introductions
of the uniform act are expected in at least 20 additional states in 2005. A
Web site has been established which contains important information on UECA:
www.environmentalcovenants.org.
Related articles:
The National ICs Coalition: Making Institutional
Controls Work
What is UECA?