Contaminated sites Highlights for Realtors, Property Vendors and Purchasers
Contaminated sites Highlights for Realtors, Property Vendors and Purchasers
Contaminated sites Highlights for Realtors, Property Vendors and Purchasers The Waste Management Act [RS 1996] and the Contaminated Sites Regulation [BC Reg. 375/96] http://www.qp.gov.bc.ca/stat_reg/regs/elp/R375_96.HTM govern contaminated sites in BC. What is a contaminated site? A contaminated site is a location where commercial and industrial activities may have caused spills and deposits of chemicals on land. Toxic substances such as PCBs, lead and gasoline may be present in soil, surface water, and groundwater. The province now has information on file for 3,000 such sites in BC. Non-residential property vendors must provide a site profile, a form that identifies potentially contaminated sites to prospective purchasers at least 30 days before the transfer of property, unless the time between the date of the agreement for transfer and the actual transfer is less than 30 days.
Then the vendor must provide the site profile before the date of the property transfer.
Concerns Over Vendor Disclosure Under the former provisions of the Waste Management Act, there were no vendor reporting or disclosure requirements to allow private parties to determine the possible extent of contamination at a given site. Common law cases of the past decade have increasingly avoided the "buyer beware" rule where the subject property is contaminated. These cases, however, have not followed uniform approaches or clear rules for what vendors must disclose. The Waste Management Act and the Contaminated Sites Regulation now enhance the certainty sought by parties in real estate transactions.
For specific types of current or past land use, vendors must disclose a site profile to prospective purchasers. What Are "Site Profiles"?
Site profiles are an important mechanism to assist in identifying potentially contaminated sites. A site profile requires readily available information and should not require the assistance of a consultant to complete. Specific industrial or commercial land uses trigger the submission of site profiles and are listed in regulations. What are the "Industrial Or Commercial" Use Triggers? Not all industrial or commercial uses require submission of a site profile. The regulation identifies only those uses tending to leave contamination, for example, gasoline stations. A list is found in Schedule 2 of the regulation, and also is part of the ministry package available to those needing to complete and submit a site profile.
Who Receives Site Profiles?
Property vendors must provide site profiles to prospective purchasers unless the prospective purchasers waive this right, in writing. Under most circumstances, a vendor is not required to provide a site profile to a regional Environmental Protection manager.
Are There Site Profile Exemptions? The Contaminated Sites Regulation provides many exemptions for vendors. Exemptions apply, for instance, where: • an accurate site profile already exists in the Site Registry; • the site has already been determined to be a contaminated site; • a property is currently used mainly for residential purposes; and • at the time of the contract for purchase and sale, the property had never been zoned for any other use than primarily for residential purposes.
When Must Site Profiles be Provided? The regulations require a vendor of property to provide a site profile to a prospective purchaser at least 30 days before the transfer of property actually occurs. However, if the time between the date of the agreement for transfer and the actual transfer is less than 30 days, the vendor must provide the site profile before the date of the property transfer. Site Registry The new legislation improves access to information about sites in British Columbia. A central Site Registry has been created as a depository of information about sites, including basic characteristics of a site, legal events and milestones in the cleanup process.
The registry is, in effect, a "record of decisions" about sites which have been evaluated, whether or not they are clean or contaminated.
The public has access to the Site Registry by computer through BC OnLine. It is an important source of information for many private parties, particularly those involved in real estate transactions. Liability For Remediation A common concern in real estate transactions today is that it is difficult to predict if a property might attract environmental liability. The bill and the regulation provide parties involved in real estate transactions with objective standards and opportunities to limit their liability. For example: • the regulation provides standards for determining if a site is a contaminated site and if remediation is satisfactory; • parties may obtain a formal determination from a regional Environmental Protection manager as to whether a site is a "contaminated site"; • exemptions exist for certain parties, notably an "innocent acquisition" exemption; • parties who are liable for remediation may obtain "minor contributor" status or enter into a voluntary remediation agreement, both of which can limit liability; • in allocating liability shares, a regional Environmental Protection manager must consider private contracts respecting liability, to the "extent feasible without jeopardizing remediation"; and • approval of remediation can be obtained in the form of approvals in principle, certificates of compliance and conditional certificates of compliance.
Alternate Dispute Resolution Resolving disagreements about responsibility and liability is often critical in contaminated site remediation. Under the new legislation and regulations, an allocation panel will be accessible to responsible parties and regional Environmental Protection managers. A panel can provide an opinion on minor contributor status and the respective liability shares of responsible parties. Recognition of Developers' Concerns A key concern for the development industry is the lack of certainty about legal requirements for cleaning up contaminated sites. This increases the risks faced by developers, and translates into project delays, higher project costs, and fewer redevelopment projects being completed.
Recent amendments to the Waste Management Act and the new Contaminated Sites Regulation provide clear rules for contaminated sites management, enhancing business predictability. A number of flexible provisions help developers minimize remediation costs.
Meaning of "Contaminated Site" and "Remediation" Clarified The new contaminated sites legislation and regulations provide certainty by specifying standards which define "contaminated site" and acceptable "remediation". Developers may use a variety of generic and site-specific factors to decide if a site is a contaminated site. In turn, they have the right to choose from a variety of standards when undertaking remediation. Screening Development Applications In the absence of legislative guidance, local governments in recent years adopted a wide range of methods to screen development applications for possible contamination.
The new site profile system is designed to bring uniformity to local government reviews. What is a Site Profile?
Site profiles are an important mechanism for identifying potentially contaminated sites. A site profile requires readily available information and should not require the assistance of a consultant to complete. Developers are required to provide site profiles in specified instances, most notably when applying for zoning, subdivision, demolition and relocation of soil. What are the Industrial or Commercial Use Triggers? Specific industrial or commercial land uses trigger site profiles. The regulation lists only those uses tending to leave contamination, for example gasoline stations. This list is also attached to the site profile form.
Site Profile Exemptions The Contaminated Sites Regulation provides numerous exemptions for providing site profiles. Developers will be exempt from site profile requirements, for instance, where: • an accurate site profile already exists in the Site Registry, • the site has already been determined to be a contaminated site, • the site's remediation has already been approved, for example by a Certificate of Compliance, and • a local government has opted out of administering the site profile system.
Site Registry A Site Registry has been created to provide easy access to reported information on sites, including basic characteristics of a site, legal events and milestones in the remediation process.
The public may access the Site Registry by computer through BC OnLine. Site Investigations Site investigations provide the key information for determining if a site is contaminated. They require experienced consultants, and often developers will have them done without government involvement. Under the new legislation, a regional Environmental Protection manager from the ministry may order a site investigation, prompted by a site profile or other information a Manager may receive.
Independent Remediation Procedures for independent remediation are provided so developers can clean up sites with minimal supervision by the ministry. Independent remediation may occur where liability is not in dispute, investigation and remediation procedures are routine and engineering or environmental consultants are capable of applying the regulations and any additional guidelines or requirements. The ministry must be notified at the onset and on completion of remediation, and notations will be entered on the Site Registry. Using independent remediation would not prevent a developer from applying for a Certificate of Compliance at a later date.
Liability For Developers A current owner or operator of a site may be responsible for remediation at a contaminated site. This could include a developer. Several exemptions are provided which could be particularly relevant to developers who may be "responsible persons": Innocent acquisition exemption on acquisition, the person diligently undertook inquiries, did not find contamination, and did not contribute further to the contamination; Migration of a substance from offsite – a person will be immune when a site has been contaminated only on account of migration of a substance from offsite; Environmental consultant immunity –consultants acting for developers will be immune from liability where they assist the developer in the remediation of the site, provided they are not negligent in their actions; Immunity from future liability – a person who remediates and obtains a Certificate of Compliance can use this certificate as a defence in private cost recovery lawsuits.
This immunity applies where another person subsequently proposes to change the use of a remediated site or undertake further cleanup.
The Contaminated Sites Regulation provides further exemptions which may be relevant to developers, particularly those pertaining to sureties, construction contractors, and transporters of contaminated soil. Cost Recovery Provisions The legislation and regulation authorize a person to recover costs from a responsible person(s) where those costs are associated with remediation. That is, a developer who undertakes remediation may recover costs from other responsible persons — for example, past polluters.
Minor Contributor Status Even where developers are unable to obtain an exemption as described above, they may seek minor contributor status.
The legislation recognizes the need to treat those persons who only contributed a minor portion of the contamination on site in a fair and expeditious manner. Minor contributor status can also cap and shield against private cost recovery lawsuits, also limiting liability. Voluntary Remediation Agreements A voluntary remediation agreement with the ministry may be particularly attractive to a developer who wishes to settle liability expeditiously. It can be used to agree to the terms of remediation, including a cap on remediation costs and scheduling. Also, voluntary remediation agreements can form the basis for private financial transactions.
Alternate Dispute Resolution Resolving disagreements about responsibility and liability is often critical in contaminated sites remediation. An allocation panel will be accessible to responsible parties and regional Environmental Protection managers. The panels can give opinions on whether exemptions are applicable, whether minor contributor status is applicable, and the respective shares of cleanup costs of responsible parties. Approval in Principle Developers have urged the ministry to provide interim approval, or Approval in Principle from the ministry, to enable them to seek appropriate financing and municipal development approvals.
A Manager may grant an Approval in Principle by approving a remediation plan which, if implemented, would lead to remediation that meets applicable standards. Investigation results, an evaluation of remediation options, public consultation input and remediation plans would be reviewed and, if satisfactory to a Manager, may lead to an Approval in Principle being issued.
Certificates Of Compliance A developer can seek approval of remediation in the form of a Certificate of Compliance. A Certificate of Compliance may be issued by a Manager when a site has been remediated according to a remediation plan and meets numerical remediation standards in the Contaminated Sites Regulation. Conditional Certificates Of Compliance The ministry recognizes that at some sites or for some types of contamination, remediation meeting numerical standards may not be technically feasible or financially justified. The legislation allows onsite management of contaminants, provided these contaminants are managed according to prescribed risk standards.
A regional Environmental Protection manager may issue a Conditional Certificate of Compliance where the remediation meets risk-based standards in the Contaminated Sites Regulation. Security The Waste Management Act and Contaminated Sites Regulation establish a hierarchy of security: restrictive covenants under the Land Titles Act can be imposed only where an entry on the Site Registry is not adequate to achieve effective remediation; and, financial security can only be imposed where restrictive covenants are not adequate. The regulation also specifies circumstances when a regional Environmental Protection manager must discharge the relevant security.
Contaminated Soil Relocation Contaminated soil relocation agreements regulate the movement of soils from contaminated sites. They take into account the soil quality and environmental conditions at the deposit site. While local bylaws to regulate soil deposit are allowed, they must not conflict with provincial standards if immunity provisions under this legislation are to apply to those local governments. The ministry anticipates that municipal bylaws will become more consistent with the soil relocation requirements under this legislation. Public Review Not all contaminated sites raise significant public concerns.
However, a regional Environmental Protection manager may require a responsible person to carry out public consultation and review of remediation in cases where there is significant public interest. For those sites, public consultations could achieve better public understanding of proposed remediation, as well as provide useful commentary with which to evaluate remediation alternatives.
Addressing industry concerns, the Contaminated Sites Regulation bars a Manager from ordering public consultation for remediation for which an Approval in Principle, Certificate of Compliance or Conditional Certificate of Compliance have already been issued. Contaminated Sites Fees The contaminated site legislation authorizes the provincial and local governments to collect fees to offset their contaminated sites regulatory and administration costs. This regulation has provisions to allow the ministry to contract out report reviews to qualified private consultants. This avoids costly regulatory delays for developers.
Link Facts on Contaminated Sites: Highlights for Developers Link Facts on Contaminated Sites: Highlights for Realtors, Property Vendors and Purchasers Link Facts on Contaminated Sites: The Site Profile System Link Guidance on Contaminated Sites: Applying for a Site Registry Search on BC OnLine For more information, visit: http://wlapwww.gov.bc.ca/epd/epdpa/contam_sites/fact_sheets/11.html Sources: BC Ministry of Water, Land and Air Protection