Coming Soon: More Environmental Notices to Show Up in the Land Records

June 16, 2013
by Stephanie L. Hansen

When the Hazardous Substance Cleanup Act was passed by the Delaware General Assembly in 1990, included was a section (7 Del. C. Section 9115) requiring that "when a release of a hazardous substance that has been determined by the Secretary to be a threat to public health or the environment has occurred at a facility or property on which the facility is located, the owner of the property shall place a notice in the records of real property kept by the Recorder of Deeds of the county in which the property is located." The notice requires, among other things, that the facility (i.e., the property) be identified, the owner of the property be identified, and the date the release occurred be stated.

This is one loaded requirement, and one that hasn't been chased to the ground or imposed uniformly. DNREC is currently reviewing what would be necessary in order to more closely adhere to the intent and letter of the law. Clearly, real estate attorneys should keep a heads-up in order to understand what might be coming back to them from a title search. In turn, that should lead to the need for advice from environmental attorneys. Interested parties may want to participate on the Hazardous Substance Cleanup Act Advisory Committee (formerly the Brownfields Advisory Committee) and are directed to that portion of DNREC's webpage.

First, when exactly is a release of a hazardous substance determined by the Secretary to be a threat to human health and the environment? When the levels of a contaminant are above the reporting levels? But, as the folks at DNREC will be the first ones to tell you, just because you have a substance present above the reporting level doesn't mean that the substance represents a threat. You also have to have a complete exposure pathway, and a level of the substance that (when coupled with the complete exposure pathway) demonstrates a harm.

Assuming that a complete exposure pathway exists, is it still a threat if there is an active investigation and cleanup going on? Or, is it only a threat is no one is doing anything about it? And, about the requirement that the owner of the property state the date the release occurred, yeah, well, good luck with that one. That only works if the release is from a single, identifiable event, like a tank rupture or a known spill of some sort. Many hazardous substance release sites are the result of a business practice that occurred over the course of many years a long time ago with few records documenting what happened, or a practice of historic fill being placed on property to make it buildable (think South Wilmington), or from undocumented slow leaks and occasional minor spills over the course of running a business (or multiple businesses). Just try pinning a date to any of that. I'm not saying that we shouldn't try, of course, but recognize the limitations on the ability to actually comply with the letter of the law.

Add this to the proposed DNREC lien legislation (discussed in earlier blog articles) and the expanded emphasis on environmental covenants in the UST/AST context (not just HSCA, and also discussed in earlier blog articles), and you have an even wider intersection between environmental and real estate law. Real estate practitioners would be wise to recognize their limitations anticipating the environmental thicket ahead.