FOR DISCUSSION ONLY

UNIFORM ENVIRONMENTAL COVENANTS ACT

NATIONAL CONFERENCE OF COMMISSIONERS

ON UNIFORM STATE LAWS

MEETING IN ITS ONE-HUNDRED-AND-ELEVENTH YEAR

TUCSON, ARIZONA

JULY 26 - AUGUST 2, 2002

Discussion Draft for Drafting Committee Meeting December 6-8, 2002

UNIFORM ENVIRONMENTAL COVENANTS ACT

WITH PREFATORY NOTE AND REPORTER'S NOTES

Copyright ©2002

By

NATIONAL CONFERENCE OF COMMISSIONERS

ON UNIFORM STATE LAWS

The ideas and conclusions set forth in this draft, including the proposed statutory language and any comments or reporter's notes, have not been passed upon by the National Conference of Commissioners on Uniform State Laws or the Drafting Committee. They do not necessarily reflect the views of the Conference and its Commissioners and the Drafting Committee and its Members and Reporters. Proposed statutory language may not be used to ascertain the intent or meaning of any promulgated final statutory proposal.

DRAFTING COMMITTEE TO UNIFORM ENVIRONMENTAL COVENANTS ACT

WILLIAM R. BREETZ, JR., University of Connecticut School of Law, Connecticut Urban Legal Initiative, 35 Elizabeth Street, Room K-202, Hartford, CT 06105, Chair

MARION W. BENFIELD, JR., 10 Overlook Circle, New Braunfels, TX 78132

DAVID D. BIKLEN, Connecticut Law Revision Commission, State Capitol, Room 509A, Hartford, CT 06106

STEPHEN C. CAWOOD, 163 W. Short St., Suite 300, Lexington, KY 40507-1361

BRUCE A. COGGESHALL, One Monument Sq., Portland, ME 04101

FRANK W. DAYKIN, 4745 Giles Way, Carson City, NV 89704, Committee on Style Liaison

THEODORE C. KRAMER, 34 Allerton Ave., Brattleboro, VT 05301-2939

DONALD E. MIELKE, Ken Caryl Starr Centre, 7472 S. Shaffer Ln., Suite 100, Littleton, CO 80127

LARRY L. RUTH, 1233 Lincoln Mall, Suite 202, Lincoln, NE 68508, Enactment Plan Coordinator

HIROSHI SAKAI, 902 City Financial Twr., 201 Merchant St., Honolulu, HI 96813

YVONNE L. THARPES, Legislature of the Virgin Islands, Capitol Building, P.O. Box 1690, St. Thomas, VI 00804

MICHELE L. TIMMONS, Office of the Revisor of Statutes, 700 State Office Bldg., 100 Constitution Ave., St. Paul, MN 55155

KURT A. STRASSER, University of Connecticut School of Law, 65 Elizabeth St., Hartford, CT 06105-2290, Reporter

K. KING BURNETT, P.O. Box 910, Salisbury, MD 21803-0910, President

CARL H. LISMAN, 84 Pine St., P.O. Box 728, Burlington, VT 05402, Division Chair

AMERICAN BAR ASSOCIATION ADVISOR

ROGER D. SCHWENKE, Carlton Fields, PA 1 Harbour Pl., 777 S. Harbour Is. Blvd., P.O. Box 3239, Tampa, FL33602-5950

EXECUTIVE DIRECTOR

WILLIAM HENNING, University of Missouri-Columbia, School of Law, 313 Hulston Hall, Columbia, MO 65211, Executive Director

WILLIAM J. PIERCE, 1505 Roxbury Road, Ann Arbor, MI 48104, Executive Director

Emeritus

Copies of this Act may be obtained from:

NATIONAL CONFERENCE OF COMMISSIONERS

ON UNIFORM STATE LAWS

211 E. Ontario Street, Suite 1300

Chicago, Illinois 60611

312/915-0195

www.nccusl.org

UNIFORM ENVIRONMENTAL COVENANTS ACT

TABLE OF CONTENTS

Prefatory Note 1

SECTION 1. TITLE. 4

SECTION 2. DEFINITIONS. 4

SECTION 3. CREATION OF ENVIRONMENTAL COVENANTS. 78

SECTION 4. VALIDITY.. 9

SECTION 5. OTHER LAW 123

SECTION 6. REGULATIONSAGENCY CONTROLS FOR ENVIRONMENTAL COVENANTS. 124

SECTION 7. RECORDING. Alternative A. 1416

SECTION 7. RECORDING. Alternative B 17

SECTION 8. DURATION. 158

SECTION 9. MODIFICATION OR TERMINATION. 169

SECTION 10. ENFORCEMENT. 1721

SECTION 11. COORDINATION BY LOCAL GOVERNMENT. 204

SECTION 12. MARKETABLE TITLE. 205

SECTION 13. NOTICE. 226

SECTION 14. OFFICIAL FORM : NOTICE OF ENVIRONMENTAL COVENANT. 237

SECTION 15. REGULATIONS. 30

SECTION 156. UNIFORMITY OF APPLICATION AND CONSTRUCTION. 2530

SECTION 167. SUPPLEMENTAL PRINCIPLES OF LAW APPLICABLE. 2530

SECTION 178. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. 2530

UNIFORM ENVIRONMENTAL COVENANTS ACT

Prefatory Note

Environmental covenants are increasingly being used as part of the environmental remediation of contaminated real estateproperty. An environmental covenant typically allowsis used when the real estateproperty is to be cleaned up to a level determined by the environmental risks posed, rather than to absolute standards, which is both ecologically and environmentallyunrestricted use standards. Such risk based remediation is both environmentally and economically preferable in many circumstances. Such risk based remediation, although it will often authorize the parties to leave some residual contamination in the real estate. property. An environmental covenant is then used to implement this risk based cleanup by controlling the risks presented by that residual contamination.

There are two principal policies to be served by confirming the validity of environmental covenants. One is to insure that land use restrictions, mandated environmental monitoring requirements and a wide range of common engineering controls designed to control the environmental risk of residual contamination will be reflected on the land records and effectively enforced over time as a valid real estateproperty servitude. A variety of common law doctrines - the same doctrines which led to adoption of the Uniform Conservation Easement Act - cast doubt on such enforceability and this Act addresses those matters.

A second important policy served by this [Act] is the effort to return previously contaminated property, often located in urban areas, to the stream of commerce. The environmental and real estateproperty legal communities have often been unable to identify a common set of principles applicable to such properties. The frequent result has been that these properties remain vacant, dangerous and unproductive. This is an undesirable outcome for communities seeking to return once important commercial sites to productive use. This Act should significantly aid in that effort by offering a clear and objective process for creating, modifying or terminating environmental covenants and for recording these actions in recorded instruments which will be reflected in the title abstract of the property in question.

Of course, such covenants risk based remediation must be used carefully to ensure that the risk based remediation protects human health and the environment. Environmental covenants accomplish this goal by controllingso that it actually controls the risk presented by the residual contamination which remains in the real estate. The covenants can control this risk by imposingproperty and thereby protects human health and the environment. When risk based remediation imposes restrictions on how the property may be used after the cleanup, by requiring requires continued monitoring of the site, and by requiringor requires construction of permanent containment or other remedial structures on the site, environmental covenants are a crucial tools to make these restrictions and requirements effective. Yet environmental covenants can perform this critical risk control functiondo so only if their legal status under state property law and their practical enforceability are assured, as this proposed [Uniform Act] seeks to do.

It is important to emphasize that environmental covenants exist in a larger context of environmental remediation regulation, and they must be considered within that larger context. Thus environmental remediation is usually based on a statutory command, overseen by a public regulatory body, and governed by substantial regulatory controls that implement many requirements in addition to covenants. Environmental covenants are one tool used in thisto accomplish remediation effort..

Environmental covenants may be used as part of environmental remediationsthe remedial decision regulatory process to protect the public from residual contamination that remains while also permitting re-use of the site in an economically valuable way. Environmental remediation projects may be done in a widely diverse array of contamination fact patterns and regulatory contexts. For example, the remediation may be done at a large industrial operating or waste disposal site. In such a situation, the cleanup could be done under either federal CERCLA or RCRA authority. These federal statutes would also apply to remediation done at Department of Defense or Department of Energy sites that are anticipated to be transferred out of federal ownership. The regulatory statutes and applicable regulations will provide the restrictions and controls to be included in the resulting environmental covenants in these settings.

In other situations, state law and regulation will be a more important source of regulatory policy. State law is given a role to play in the federal environmental policy discussed above. Beyond this, state law may be the primary source of regulatory authority for many remediation projects. These may include larger sites and will often include smaller, typically urban brownfield sites. In addition, many states authorize and supervise voluntary cleanup efforts, and these also may find environmental covenants a useful policy tool. With both state and federal environmental remediation projects, the applicable cleanup statutes and regulations will provide the basis for the restrictions and controls to be included in the resulting environmental covenants.

This [Act] is intended to apply to environmental covenants useduse restrictions from residual contamination in any of these different situations. Once the governing regulatory system and the property owner have determined to use an environmental covenant as part of a remediation project, this [Act]a risk based approach to cleanup to protect the public from residual contamination, this Act supplies the legal infrastructure for creating and enforcing thatthe implementing environmental covenant under state law.

This [Act] contemplates a situation where a risk based clean-up is agreed to by the regulatory agency and the parties responsible for the clean-up, as well aspotentially including the fee owner and the holdersowners of other interests in the property. As a consequence of that agreement, the Act assumes those parties will each negotiate the terms of and then sign the covenant. This would not be the case in a mandatory clean-up where a person or persons were held liable for the full cost of a complete clean-up.

The [Act] assumes the current owners will participate in signingsign the covenant. Cooperation is not always possible, however. State and federal regulatory systems make a number of parties, in addition to the current owner of a fee simple or some other interests, potentially liable for the cost of remediation of contaminated real estateproperty. As a result, a remediation project may proceed even though an owner is no longer present or interested in the property. In those circumstances, the remediation project would be conducted pursuant to regulatory orders and could be financed either by other liable parties or by public funds. However, an environmental covenant may still be a useful part oftool in implementing the remediation project even in these situations.

When an owner which is either unavailable or unwilling to participate in the environmental response project, it may be appropriate to condemn and take a partial interest in the real estateproperty in order to be able to record a valid servitude on it. Under the law of some states, agenciesstates have the power to take that owner's interest by condemnation proceedings, paying the value of the interest taken, and then enter an environmental covenant as an owner. Where there is substantial contamination the property may have little or no market value, and the court presumably would take the cost of remediation into account in establishing the fair market value of the interest taken. See, e.g., Northeast Ct. Economic Alliance, Inc. v. ATC Partnership, 256 Conn. 813, 776 A.2d 1068 (2001). Although effective implementation of this [Act] may require that the agencystate have such a power of condemnation, this [Act] does not provide a substantive statutory basis for that power, and the agencyState must therefore rely on other State law. Each State considering adoption of this [Act] may wish to consider the availability of should ensure that such a condemnation power to the agencyis available for this purpose.

Similarly, while this [Act] provides substantive law governing creation, modification, and termination of environmental covenants, it does not include special administrative procedures for these and does not change the remedial decision making process. Rather, the [Act] presumes that the State's general administrative law or any specific procedure governing the environmental response project would apply to these activities.

Finally, this [Act] does not include a section of policy and legislative findings, although some states may choose to use such a section. If such a section is desired, the following version, taken from the Colorado Statute, C.S.R.A. §25-15-317, may be appropriate.

Policy and Legislative Findings.

The [insert name of General Assembly or other State Legislative Body] declares that it is in the public interest to ensure that environmental response projects protect human health and the environment. The [General Assembly] finds that environmental response projects may leave residual contamination at levels that have been determined to be safe for a specific use, but not all uses, and may incorporate activity limitations and use restrictionslimitations that must be maintained or protected against damage to remain effective. The [General Assembly] further finds that in such cases, it is necessary to provide an effective and enforceable means to ensure the required activity limitations and use restrictionslimitations remain effective for as long as any residual contamination poses environmental risk. The [General Assembly] therefore declares that it is in the public interest to create environmental covenants to effectuate environmental response projects which protect human health and the environment.

UNIFORM ENVIRONMENTAL COVENANTS ACT

SECTION 1. TITLE. This [Act] may be cited as the Uniform Environmental Covenants [Act].

SECTION 2. DEFINITIONS. In this [Act]:

(1) "Activity limitations and use restrictions"limitations" means restrictions or obligations with respect to real estateproperty contained in an environmental covenant.

(2) "Affected local government" means a county, city, or municipality, or other unit of local government in which all or part ofany real estateproperty subject to an environmental covenant is located.

(3) "Agency" means the state or federal governmental body that determines or approves the environmental response project requiring creation of an environmental covenant. The term includes the department as defined in this [Act].

(4) "Department" means [insert name of state regulatory agency for environmental protection].

(54) "Environmental covenant" means a servitude that imposes specified activity limitations and use restrictionslimitations on real estateproperty described in the servitude to implement an environmental response project, and satisfies the requirements of Section 3 of this [Act].

(65) "Environmental response project" means environmental remediation of real estateproperty, conducted pursuant tounder: (a) a governmental program requiring environmental remediation of real estateproperty, including [insert references to state law requiring environmental remediation], or

(b) a program to do voluntary remediation of real estateproperty, by owners of real estateproperty or other persons, subject to approval and supervision by a governmental body or by a person authorized by a governmental body or by statute.

(76) "Holder" means a person, agency, affected local government, or other governmental body which is named as a holder in an environmental covenant. The rights and duties of a holder is described in Section 4(f) of this [Act].

(7) "Interested party" means any person, other than an owner, that holds an interest in the real property that is subject to an environmental covenant. The term includes a person who holds only a right of possession in the real property, and a person who holds the interest solely as security for an obligation.

(8) "Owner" means a person that holds anthe fee simple interest in real estate, other than as security for an obligation, whichproperty that is subject to an environmental covenant.

(9)"Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, or any other legal or commercial entity.

(10) "Prior covenant" means a record that:

(a) creates activity limitations and use restrictionslimitations with respect to real estateproperty;

(b) was required as part of an environmental response project; and

(c) was agreed to before [the effective date of this [Act]].

(11) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(12) "Sign" means, with present intent to authenticate or adopt a record, to execute or adopt a tangible symbol or to attach to or logically associate with the record an electronic sound, symbol, or process.

(13) "State" means a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

Reporter's Notes

The following are examples of subsection (1) activity limitations and use restrictionslimitations:

(a1) a prohibition or limitation of one or more uses of or activities on the real estateproperty, including restrictions on residential use, drilling for or pumping groundwater, or interference with activity and use limitations or other remedies,

(b2) an activity required to be conducted on the real estateproperty, including monitoring, reporting, or operating procedures and maintenance for physical controls or devices,

(c3) any right of access necessary to implement the activity and use limitations, and

(d4) any physical structure or device required to by placed on the real estateproperty.

The governmental body with responsibility for the environmental response project in question is the authorized agency under this [Act]. This agency will supply the public supervision necessary to protect human health and the environment in creating and modifying the environmental covenant. The agency, for purposes of this [Act], may be either a federal government entity or the departmentappropriate state regulatory agency for environmental protection.

Subsection (54) states that an environmental covenant is created to implement an environmental response project. An environmental response project may determine, in some circumstances, to leave some residual contamination on the real estateproperty. This may be done because complete cleanup is technologically impossible, or because it is either ecologically or economically undesirable. In this situation, the environmental response project may use activity limitations and use restrictionslimitations to control residual risk which results from contamination remaining in real estateproperty. An environmental covenant is then created to ensure that the activity and use limitations are both legally and practically enforceable.

"Environmental response projects" covered by subsection (65) may be undertaken pursuant to authorization by one of several different statutes. Subsection (65)(a) specifically covers remediation projects required under state law. However, the subsection is written broadly to also encompass both current federal law, future amendments to both state and federal law, as well as new environmental protection regimes should they be developed. Without limiting this breadth and generality, the [Act] intends to reach environmental response projects undertaken pursuant to any of the following specific federal statutes:

(1) Subchapter III or IX of the federal "Resource Conservation and Recovery Act of 1976", 42 U.S.C. sec. 6921 to 6939e and 6991 to 6991i, as amended;

(2) Section 7002 or 7003 of the federal "Resource Conservation and Recovery Act of 1976", 42 U.S.C. sec. 6972 and 6973, as amended;

(3) The federal "Comprehensive Environmental Response, Compensation, and Liability Act of 1980", 42 U.S.C. sec. 9601 to 9647, as amended;

(4) The federal "Uranium Mill Tailings Radiation Control Act of 1978", 42 U.S.C.sec.7901 et seq., as amended.

Subsection (65)(b) extends the [Act]'sAct's coverage to voluntary remediation projects that are undertaken with approval and supervision by a governmental body . Environmental covenants that are part of voluntary remediation projects may serve both the goal of environmental protection and the goal of facilitating reuse of the real estateproperty. However, supervision of these projects by a governmental body or other authorized party is essential to insure that these goals are metserved. This [Act] is intended to apply only to environmental covenants that are part of such publicly supervised remediation projects.

An owner may wish to provide for remediation of the real estateproperty beyond the requirements of minimum applicable regulatory standards, to protect against possible future liability for further remediation. Such provision can be part of the environmental response project if the requirements of governmental approval and supervision are satisfied.

Some states authorize properly certified private parties to supervise remediaton to pre-existing standards and certify the cleanup. For example, in Connecticut and Massachusetts, these are "licensed site professionals". (Massachusetts: MGL ch. 21A §19; 310 CMR 40.1071; Connecticut: CGS §§22a-133o, 22a-133y.) Supervision and certification by statutorily authorized parties accomplishes the same public function as supervision and certification by the governmental entity. Thus, these environmental response projects are also covered by this definition.

Subsection (65)(b) also includes within environmental response projects specific agreements between the owner and the agency for remediation that goes beyond prevailing requirements. Because the owner may have residual liability for the site, even after remediation and transfer to a third party for redevelopment, the owner may require further restrictions as a condition of creating the environmental covenant and eventual reuse of the real estateproperty. The agency's approval and supervision will be sufficient to ensure that any further restriction is in the public interest.

The definition of "holder" is in Subsection (76). As the practice of using environmental covenants continues to grow, new entities may emerge to serve as holders, and one purpose of the [Act] is to avoid limiting this process. A holder may be the agency, a governmental body, or a person under the broad definition of this [Act]. The identity of an individual holder must be approved by the agency and the owner as part of the process of creating an environmental covenant, as specified in Section 3 of this [Act]. Section 4(f) contains an additional provision concerning whether a holder's power to enforce the covenant is an interest in real estate.

property.

Section 9's definition of interested party reaches all owners of less than a fee simple interest in the real estate. While such parties are frequently described as "holders" of such an interest, that terminology is not used here to minimize the chance for confusion with the holder as defined in this act. The definition of interested party reaches a person who hold an interest solely as security for an obligation so that such person's consent will be required for creation of an environmental covenant under Section 3 and modification under Section 9 if its interest is affected by the covenant or modification. This Act does not create the interest held by any interested party and thus should not effect the liability of any interested party under any other law.

SECTION 3. CREATION OF ENVIRONMENTAL COVENANTS.

(a) To be effective, an environmental covenant must:

(1) contain a legally sufficient description of the real estateproperty subject to the covenant;

(2) describe the activity limitations and use restrictionslimitations on the real estateproperty, including any rights of access or other rights granted to a person in connection with enforcement of the covenant; and

(3) be signed by:

(A) the agency;

(B) a holder if other than the agency; and

(C) each owner and interested party whose interest in the real estateproperty will be subordinated to the covenant.

(b) The agency may require an owner of real estateproperty and any interested party to obtain written subordination of prior interests in the real estateproperty subject to an environmental covenant as a condition to signing the covenant.

Reporter's Notes

This [Act] does not provide the standards for environmental remediation nor the specific activity and use limitations to be used at a particular site. Those will be provided by other state and federal law governing mandatory and voluntary cleanups. Those standards will then be incorporated into the environmental response project, which, in turn, calls for activity and use restrictions that can be implemented through creation of an environmental covenant. This section addresses creation of the environmental covenants.

An environmental covenant can be created only by agreement between the owner and the agencyagency and the owner or an interested party which owns an interest which includes the right to create the covenant. If there is a holder other than the agency, both the agency and the owner must approve the identity of the holder, and the holder must agree to the terms of the covenant. The agency may also refuse to agree to an environmental covenant if it does not effectively implement the activity limitations and use restrictionslimitations specified in the environmental response project.

This [Act] recognizes that there may be different owners ofparties which own different interests in real estate. For example,property, other than the fee simple interest, and these are defined as "interested parties" under Section 2 (9) of this Act. Examples include an interest in mineral rights may be owned separately from surface rights, long term leases, mortgages and liens. Subsection (a)(3)(iiiC) requires that the interested party which owner ofs such any interest to be affected by the environmental covenant must agree to the covenant.

Subsection (b) is concerned with prior interests in the real estateproperty. If a prior interest is not subordinated to the environmental covenant, and wasthen is foreclosed at some later time, then under traditional real estateproperty law, that foreclosure would serve to extinguish or limit an environmental covenant. Since such an outcome is antithetical to the policies underlying this [Act], the [Act] contemplates that the agency may, before agreeing to the covenant, require subordination of these interests. At the time of creation of the environmental covenant, the agency must determine whether the prior interest presents a realistic threat to the covenant's ability to accomplish its purpose to protect the environment protection and human health.

SECTION 4. VALIDITY.

(a) An environmental covenant runs with the land and binds the parties to the covenant and their successors and assigns.

(b) An environmental covenant is valid and enforceable even if: (1) it is not appurtenant to an interest in real estateproperty;

(2) it can be or has been assigned to a person other than the original holder;

(3) it is not of a character that has been recognized traditionally at common law;

(4) it imposes a negative burden;

(5) it imposes affirmative obligations upon the owner of an interest in the burdened real estateproperty or upon the holder;

(6) the benefit or burden does not touch or concern real estateproperty; or

(7) there is no privity of estate or of contract.

(c) An environmental covenant is not invalid or unenforceable because it is identified as an easement, covenant, servitude, deed restriction, or other instrumentinterest.

(d) A prior covenant is not invalid or unenforceable by reason of any of the common law limitations on enforcement of interests described in subsection (b) or because of its identification as an easement, covenant, servitude, deed restriction or other instrument. This [Act] does not apply in any other respect to a prior covenant.

(e) This [Act] does not invalidate any interest, whether designated as an environmental covenant or other instrumentinterest, that is otherwise enforceable under the law of this State.

(f) A holder of aan environmental covenant may enforce the covenant in accordance with its terms and may have other rights expressly identified in the covenant. The holder's right to enforce the covenant is not an interest in real estateproperty. This [Act] does not govern whether other rights held by a holder identified in the covenant are interests in real estateproperty.

Reporter's Notes

Subject to the other provisions of this Act, environmental covenants are intended to be perpetual, as provided in subsection (a),. Thus, covenants may be limited, as provided in Section 8, or modified or terminanted under Section 9.

Subsection (b) and its comments are modeled on Section 4 of the Uniform Conservation Easement Act. One of the Environmental Covenant Act's basic goals is to remove common law defenses that could impede the use of environmental covenants. This section addresses that goal by comprehensively identifying these defenses and negating their applicability to environmental covenants.

This [Act]'sAct's policy supports the enforceability of environmental covenants by precluding applicability of older common law doctrines limiting such enforcement. That policy is broadly consistent with the Restatement of the Law Third of Property (Servitudes), including §2.6 and chapter 3. For specific doctrines see §§ 2.4 (horizontal privity), 2.5 (benefitted or burdened estates), 2.6 (benefits in gross and third party benefits), 3.2 (touch and concern doctrine), 3.3 (rule against perpetuities), and 3.5 (indirect restraints on alienation). .

Subsection (b)(1) provides that an environmental covenant, the benefit of which is held in gross, may be enforced against the grantor or his successors or assigns. By stating that the covenant need not be appurtenant to an interest in real estateproperty, it eliminates the requirement in force in some states that the holder of an easement must own an interest in real estateproperty (the "dominant estate") benefitted by the easement.

Subsection (b)(2) also clarifies common law by providing that a covenant may be enforced by an assignee of the holder. Section 9(e) of this [Act] specifies that assignment to a new holder will be treated as a modification and Section 9 governs modification of environmental covenants.

Subsection (b)(3) addresses the problem posed by the common law's recognition of servitudes that served only a limited number of purposes and its reluctance to approve so-called "novel incidents". This restrictive view might defeat enforcement of covenants serving the environmental protection ends enumerated in this [Act]. Accordingly, subsection (b)(3) establishes that environmental covenants are not unenforceable solely because they do not serve purposes or fall within the categories of easements traditionally recognized at common law.

Subsection (b)(4) deals with a variant of the foregoing problem. The common law recognized only a limited number of "negative easements" - those preventing the owner of the burdened real estateproperty from performing acts on his real estateproperty that he would be privileged to perform absent the easement. Because a far wider range of negative burdens than those recognized at common law might be imposed by environmental covenants, subsection (b)(4) modifies the common law by eliminating the defense that an environmental covenant imposes a "novel' negative burden.

Subsection (b)(5) addresses the opposite problem - the potential unenforceability at common law of an easement that imposes affirmative obligations upon either the owner of the burdened real estateproperty or upon the holder. Neither of those interests was viewed by the common law as a true easement at all. The first, in fact, was labeled a "spurious" easement because it obligated an owner of the burdened real estateproperty to perform affirmative acts. (The spurious easement was distinguished from an affirmative easement, illustrated by a right of way, which empowered the easement's holder to perform acts on the burdened real estateproperty that the holder would not have been privileged to perform absent the easement.)

Achievement of environmental protection goals may require that affirmative obligations be imposed on the burdened real estateproperty owner or on the covenant holder or both. For example, the grantor of an environmental covenant may agree to use restrictions and may also agree to undertake affirmative monitoring or maintenance obligations. In addition, the covenant might impose specific engineering or monitoring obligations on the holder, particularly a charitable corporation or trust holder. In either case, the environmental covenant would impose affirmative obligations. Subsection (b)(5) establishes that neither would be unenforceable solely because it is affirmative in nature.

Subsections (b)(6) and (b)(7) preclude the touch and concern and privity of estate or contract defenses, respectively. They have traditionally been asserted as defenses against the enforcement of covenants and equitable servitudes.

Subsection (d) has further provisions for covenants created prior to the date of this [Act]. It specifies that the common law defenses covered in subsection (b) will not make prior covenants unenforceable, and that the identification of a prior covenant with one name or another will not make it unenforceable. Beyond negating these specific defenses, this [Act] does not apply to prior covenants. If the parties to a prior covenant wish to have the benefits of this [Act] for that covenant, they will have to re-execute the covenant in a manner which satisfies the requirements of this [Act].

Section (e) disavows the intent to invalidate any interest created either before or after the [Act] which does not comply with the [Act] but which is otherwise valid under the state's law.

Subsection (f) provides that a holder's right to enforce an environmental covenant is not an interest in real estateproperty. This provision is included for two reasons. SFirst, some environmental enforcement agencies are not authorized to own an interest in real estate,property and this provision will enable those agencies to serve as a holder under the act.

Act.

Second, the nature of the holder's interest in the real property may influence whether its rights and duties with respect to the real property are likely to lead to potential liability for future environmental remediation, should such remediation become necessary. Under CERCLA an "owner" is liable for remediation costs, 42 U.S.C.A. 9607(a)(1). Unfortunately, the definition of "owner" in the statute is circular and unhelpful in evaluating whether a holder is potentially liable under it. 42 U.S.C.A. 9601(20).

In general, a holder 's right to enforce the covenant should be considered comparable to the rights covered in an easement and, thus, should not lead to CERCLA liability. The two cases that have considered this question have found that the parties which held the easements were not CERCLA "owners". Long Beach Unified School District v. Dorothy B. Godwin California Living Trust, 32 F.3d 1364 (9^th Cir. 1994); Grand Trunk R.R. v. Acme Belt Recoating, 859 F. Supp. 1125 (W.D.MI, 1994). In each case, the court reasoned that the circular definition of owner meant that the term's most common meaning would prevail. The common law's distinction between an easement holder and the property owner was then applied to find the easement holder not to be an "owner" for purposes of this statute.

Where the holder has more extensive rights, a careful analysis will be required. The cases typically emphasize that parties who exercise the degree of control over a site equivalent to the control typically exercised by an owner of the site will be held liable as an "owner". Under this approach, for example, lessees have been held liable as owners when their control over the site approximated that which an owner would have. See, e.g., Delaney v. Town of Carmel, 55 F. Supp. 2d 237 (S.D.N.Y. 1999); U.S. v. A & N Cleaners and Launderers, 788 F. Supp. 1317 (S.D.N.Y. 1990); U.S. v. S.C. Dept. of Health and Env. Control, 653 F. Supp. 984 (D.C.S.C. 1984.)

CERCLA liability also extends to an "operator" of the site (42 U.S.C.A. 9607(a)(1)), and the case law interpreting this definition emphasizes that a party is liable as an operator if it has a high degree of control over the operating decisions and day to day management at the site. A holder will, in general, have only control authority over the site related to effective enforcement of the environmental covenant and does not typically need more extensive day to day control. A holder should be given more extensive control over the site only after careful consideration of the potential CERCLA liability.

SECTION 5. OTHER LAW REGULATING USE OF REAL ESTATEPROPERTY.

(a) Neither this [Act] nor an environmental covenant created pursuant to this [Act] authorizes a use of real estateproperty that is otherwise prohibited by zoning or other law.

(b) Activity limitations and use restrictionslimitations in an environmental covenant may prohibit or restrict real estateproperty uses that are authorized by zoning or other law.

Subsection (a) clarifies that this [Act] does not displace other restrictions on land use, including zoning law. Restrictions under that law apply unchanged to real estateproperty covered by an environmental covenant.

Where the environmental covenant's activity limitations and use restrictionslimitations prohibit or restrict uses onf real estateproperty, those prohibitions are necessary to protect human health and the environment. Thus, pursuant to subsection (b), the prohibitions or restrictions in an environmental covenant will apply even if other law on real estate useproperty law, including local zoning, would authorize the use. This section provides needed clarity where the environmental covenant is implementing an environmental response project done under state law. Where the environmental covenant is implementing an environmental response project under federal CERLCA law, the federal law authorizing the environmental response project preempts a conflicting city ordinance. U.S. v. City and County of Denver, 100 F.3d 1509 (10^th Cir. 1996).

SECTION 6. REGULATIONSAGENCY CONTROLS FOR ENVIRONMENTAL COVENANTS.

(a) The agency may require any party to a proposed environmental covenant to:

(1) provide to the agency information regarding the title to real estateproperty that will be subject to the covenant and any adjoining real estate, and

(2, as well as information regarding the interested parties and the interests they own,

(2) provide to the agency information regarding abutting real property and any other real property likely to be affected by the contamination remaining on the real property, and

(3) provide notice of the proposed covenant in a form and to persons satisfactory to the agency.

(b) An environmental covenant may require anthe owner or any person having a right of possession of any real estate subject to the covenant, any interested party, and their successors and assigns, to notify promptly the agency, the holder, and the department[insert name of state regulatory agency for environmental protection] if it is not the agency, of:

(1) an application to a local government for a building permit or authorization for a change in real estateproperty use; and

(2) a proposal to conduct new excavation, trenching, installation of wells, use of ground water, or to undertake other activity which the agency specifies.

(c) In addition to other rights described in an environmental covenant or otherwise granted by law, the agency, the [insert name of state regulatory agency for environmental protection] if it is not the agency, and a holder may enter real estateproperty subject to the covenant at reasonable times and with reasonable advance notice for the purpose of determining compliance with the terms of the covenant.

(d) The agency may require each party to an environmental covenant to incorporate the terms of the covenant into any lease, license, or other agreement signed by that party which grants a right with respect to the real estateproperty subject to the covenant. The incorporation may be in full or by reference.

(e) An environmental covenant is not invalid or otherwise affected merely because a person fails to comply with any of the requirements of this section or with the requirements of a regulation implementing this section.

Reporter's Notes

Subsection (a) authorizes the agency to requires an owner creatingy party to an environmental covenant to furnish the agency with title information as well as the names and addresses of the holders of all interests of record. It also authorizes the agency to require information on abutting or other affected property. The subsection also authorizes the agency to require the owner to give notice of the proposal to create an environmental covenant to all parties it specifies. While this specification will be within the agency's discretion, notice to at least the following will normally be appropriate:

1. All persons holding an interest of record in the real estateproperty.

2. All persons known to have an unrecorded interest in the real estateproperty.

3. All persons in possession of the real estateproperty.

4. All persons holding an interest of record in adjoining real estate.

5. The departmentabutting real property and all persons holding an interest of record in other real property likely to be affected by contamination remaining on the real property subject to the covenant.

5. The [insert name of state regulatory agency for environmental protection] if it is not the agency.

6. Any affected local government.

Subsection (b) authorizes the agency to require notice of a transfer of an interest in the real estateproperty subject to an environmental covenant. This notice will facilitate enforcement of the covenant. However, not all transfers of interests in the real estateproperty will implicate enforcement of the covenant and, for those that do not, the agency need not require notification. Similarly, subsection (b) also authorizes the agency to require notice of an application for a building permit or change of use of the real estateproperty subject to an environmental covenant. Here again, such a notice will facilitate enforcement of the covenant when it is required, although it may not be needed for every building permit or land use change. In both situations, the agency may specify when notice is required.

Subsection (d) authorizes the agency to require incorporation of the terms of the environmental covenant in any instrument granting an interest in the real estateproperty. Such incorporation should be required in most substantial conveyances to ensure effective enforcement of the covenant, although it will likely not be needed in all instruments.

[SECTION 7. RECORDING. Alternative A.

(a) Except with respect to the parties to the covenant or other persons having actual notice of the covenant, aAn environmental covenant is effective only if the covenant, or a notice of the covenant that complies with the notice provisions specified in Section 13, is recorded in the land records for every [county] in which land subject to the environmental covenant in located. A modification or termination of a covenant is effective only if it, or a notice of it that complies with the notice provisions specified in Section 13, is recorded in the land records for every [county] in which land subject to the environmental covenant is located. This section shall not apply to the parties to the covenant, or modification or termination of it, or to other persons having actual notice of the covenant, or modification or termination of it.

(b) The department[insert name of state regulatory agency for environmental protection] shall create and maintain a registry that contains all environmental covenants, any modification or termination of those covenants, and any recorded notices of covenants. The registry may also contain any other information concerning environmental covenants and the real estateproperty subject to them which the agency considers appropriate. The registry is a public record for purposes of [insert reference to State Freedom of Information Act].

]

SECTION 7. RECORDING. Alternative B

An environmental covenant, or a modification or termination of an environmental covenant, is effective only if the covenant, modification, or termination is recorded in the land records for each [county] in which land subject to the environmental covenant in located. This section does not apply to the parties to the covenant, modification or termination, or to other persons having actual notice of the covenant, modification or termination.

Reporter's Notes

Section 7 is offered in two versions. Alternative A is to be used in jurisdictions that will require creation of a registry of environmental covenants at the [insert name of state regulatory agency for environmental protection]. This alternative authorizes either the environmental covenant or a notice of the covenant to be recorded in the land records. Alternative B is to be used in jurisdictions that do not require creation of a registry of environmental covenants. In those jurisdictions, the environmental covenant should be recorded in the land records and this Act's provisions on notice in Sections 13 and 14 should not be used.

Subsection (a) requires that either a notice of the environmental covenant or the complete covenant must be recorded in the land records to alert all interested parties to the existence of the covenant. While a standard form of the notice is not required, Official Form 1 is adopted with the text of this [Act] for use by those parties who wish to use it. Section 13 provides that use of this Form will comply with the [Act]'sAct's notice requirements.

Subsection (b) requires creation of a new registry of environmental covenants by the department[insert name of state regulatory agency for environmental protection]. This registry may be combined with the new state registry of brownfield sites specified in the Small Business Liability Relief and Brownfields Revitalization Act §128(b)(1)(C), Pub. L. No. 107-118, ** Stat. ** (2002) (HR 2869, 107^th Cong. 1^st Session), although this [Uniform Environmental Covenants Act] calls for recording more extensive information to be recorded.

The full environmental covenant must be recorded in the registry in the department[insert name of state regulatory agency for environmental protection]. In addition, the agency may require recording of additional information about each covenant and the real estateproperty subject to it. The agency may choose to require a description of the issues presented by the residual contamination that give rise to an environmental covenant. The description will be much more accessible than the full covenant to non specialists, including local government and community interests.

At a minimum, thisthan the full covenant

This description may, at a minimum, identify the constituents of concern that have been left in the real estateproperty, their location, the potential human and environmental exposure pathways and receptors for those chemicals, and the permissible exposure limits.

Creation of a specialized registry should improve access to this information by local governments, citizens groups, and environmental interests, as well as real estateproperty professionals.

This Section requires recording of the entire covenant, and any modification or termination, in the land records.]

SECTION 8. DURATION.

(a) An environmental covenant is perpetual unless limited by its terms to a specific duration or to the occurrence of a specific event, or terminated pursuant to Section 9.

(b) An environmental covenant may not be extinguished, limited, or impaired through issuance of a tax deed, foreclosure of a tax lien, adverse possession, the exercise of eminent domain, or application of the doctrines of abandonment, waiver, lack of enforcement, or any similar common law doctrine, or the exercise of eminent domain.

Reporter's Notes

Subsection (a) is needed to ensure that the environmental covenant's protections continue as long as needed. Subsection (b) makes environmental covenants survive later tax foreclosure sales, and also survive potential common law impairments. These covenants seek to protect human health and the environment as part of the environmental response project, beyond reflecting the results of private bargaining between contracting private parties in specific private transactions. To do so, environmental covenants must survive impairments arising from these sources. However, this subsection does not restrict application of other environmental and administrative law to judicial supervision of agency conduct.

Where an environmental covenant applies to real property that would otherwise be subject to one of the doctrines listed in Subsection (b) situations may arise in which the protections of the covenant are not needed in the particular circumstance. For example, the relevant transportation authority might need to place a bridge support on real property where the environmental covenant precluded digging, and eminent domain would not be available to displace the environmental covenant. Similarly, adverse possession would not be available to perform its remedial function where, again for example, a house had been inadvertently placed on real property subject to an environmental covenant that precluded residential use. In cases such as these, modification of the covenant can be sought pursuant to Section 9. Seeking such a modification will ensure that appropriate consideration will be given to residual environmental risks.

The basic policy of this [Act] to ensure that environmental covenants survive impairment is consistent with the broad policy articulated in the Restatement of the Law of Property (Servitudes) Third, §7.9. In general, restrictions in an environmental covenant are state property law interests that are not extinguishable in bankruptcy.

SECTION 9. MODIFICATION OR TERMINATION.

(a) An environmental covenant may be modified or terminated by consent of:

(1) all the original parties to the covenant or their successors or assigns, other than an original party or a successor or assign that has waived the right to consent, or their successors or assignsexcept that consent is not required by a party whose interest will not be affected by the modification or termination; and

(2) each current owner of anor interest thated party whose interest will be affected by the modification or termination.

(b) A proposal to modify or terminate an environmental covenant must be accompanied by anyll information required by the agency.

(c) A party that proposes to modify or terminate an environmental covenant mustshall give notice of the proposal, together with and the information required under subsection (b), to all parties whose consent is required for the modification or termination and to other persons as required by the agency.

(d) An environmental covenant may include provisions governing modification or termination of the covenant, but such a provision does not relieve any person of its obligations under this Act.

(e) For purposes of this [Act], assignment of an environmental covenant to a new holder is a modification, except for an assignment undertaken pursuant to a government reorganization.

Reporter's Notes

Where there is a change in either the current knowledge of remaining contamination or the current understanding of the environmental risks it presents, the environmental response project may be changed or new regulatory action may be taken. In either situation, modification of the environmental covenant to change its activity and use limitations or to terminate the covenant may be necessary. A substantial modification or termination will usually be pursuant to either a change in the underlying environmental response project that lead to creation of the covenant or a new regulatory action.

Subsection (b) authorizes the agency to require information to support a request for modification or termination. The agency may wish to require one or more of the following:

(1) New information showing that the risks posed by the residual contamination are less or greater than originally thought;

(2) Information demonstrating that the amount of residual contamination has diminished;

(3) Information demonstrating that one or more activity limitations or use restrictions is no longer necessary.

Under subsection (c) the party requesting modification or termination is required to give notice of the request to all parties whose consent is required and to other persons the agency requires. The agency may wish to consider whether the following parties have a sufficient interest in a particular proposal to make notice to them advisable:

(1) All affected local governments;

(2) The department[insert name of state regulatory agency for environmental protection] if it is not the agency for this environmental response project;

(3) All persons holding an interest of record in the real estateproperty;

(4) All persons known to have an unrecorded interest in the real estateproperty;

(5) All affected persons in possession of the real estateproperty;

(6) All owners of adjacent real estate, and all holders of other interests in, abutting real property and any other property likely to be affected by the proposed modification;

(7) All persons specifically designated to have enforcement powers in the covenant; and

(8) The public.

Subsection (d) contemplates that the environmental covenant may impose additional restrictions on modification or termination beyond those required by this [Act]. In some circumstances the owner or another party may have contingent residual liability for further cleanup of the real estateproperty subject to the environmental covenant and may seek further restrictions in the covenant to protect against this contingent liability.

SECTION 10. ENFORCEMENT.

(a) This [Act] does not limit the authority of the agency,[ the departmentinsert name of state regulatory agency for environmental protection,] or any other person to enforce the terms of an environmental response project under other law.

(b) The following persons may maintain a civil action for injunctive or other equitable relief against a person alleged to be in violation of an environmental covenant or the reporting requirements of subsection (d) of this Section:

(1) the agency and any other party to the covenant;

(2) the department[insert name of state regulatory agency for environmental protection] if it is not the agency, or another state official authorized by state law to bring an action on behalf of the department[insert name of state regulatory agency for environmental protection]; (3) a current or former owner or interested party whose interest in the real estateproperty may be affected by violation of the covenant, or that may be liable under the environmental response project;

(4) an affected local government;

(5) a person expressly granted power to enforce in the environmental covenant expressly grants power to enforce;

[(c) In addition to the persons listed in subsection (b), any [person] [person aggrieved by an alleged breach of thean environmental covenant] may maintain a civil action for injunctive or other equitable relief against a party alleged to be in violation of an environmental covenant or the reporting requirements of subsection (d) of this Section. In any such action the court may award costs of litigation, including reasonable attorney and expert witness fees, to the prevailing or substantially prevailing party whenever the court determines such an award is appropriate. If an action is to be brought by such person, the following rules apply:

(1) The person shall notify the agency, and the department[insert name of state regulatory agency for environmental protection] if it is not the agency, that it intends to institute an action to enforce the covenant 120 days before commencing thean action.

(2) The agency may bring an action to enforce the covenant.

(3) If the agency does not commence such an action within 60 days after the notice was sent, the department[insert name of state regulatory agency for environmental protection], if it is not the agency, may bring the action within the next 60 days.

(4) If either the agency or the department[insert name of state regulatory agency for environmental protection] brings an action within the periods specified in paragraphs (2) and (3), the person giving the notice is precluded from bringing its own action so long as the agency or the department[insert name of state regulatory agency for environmental protection] is diligently prosecuting enforcement of the covenant.]

(d) An owner of real estateproperty subject to an environmental covenant, or another person identified in the covenant, shall submit a written report to the agency each calendar year detailingdescribing the status of compliance with the covenant. This requirement does not apply to an owner of detached, owner-occupied residential property.

[(e) The agency shall inspect the real estateproperty subject to an environmental covenant as often as necessary, and at least once every five years, to ensure compliance with the covenant.]

Reporter's Notes

Subsection (a) recognizes that in many situations the statutes authorizing an environmental response project will provide substantial authority for governmental enforcement of an environmental covenant.

Environmental law frequently authorizes third party enforcement of environmental statutes, regulations, and permits. Federal law authorizes citizen suits by "any person" against "any person alleged to be in violation" of any "regulation. . . requirement. . . or order" under CERCLA and RCRA remediation projects. 42 U.S.C.A. §§6972 (a) and 9659 (2001). Where the environmental covenant is part of an environmental response project undertaken pursuant to one of these statutes, it is presumably such a "requirement. . .or order" and should be enforceable by "any person." In addition, approximately 15 states authorize some form of citizen's suits, although the specific provisions are quite varied. Selmi & Manaster, State Environmental Laws §16.52 (Clark Boardman, 2002 Supp.). Where state law so authorizes, a citizen suit would be available to enforce an environmental covenant that is established pursuant to a state law authorized environmental response project. This [Act] can not limit existing federal law and does not limit existing state law authorizing that enforcement

[Subsection (c) offers two alternatives for citizen suit enforcement of all environmental covenants, regardless of whether such a suit is and the reporting requirements of subsection (d), in addition to citizen's suits authorized under currentexisting law. Either alternative would apply to covenants established under state law in states that do not currently authorize such enforcement. Local citizen and environmental interests have both the opportunity and the motivation to observe compliance with use restrictions, and to some degree with activity limitations. Thus they will be well positioned to seek enforcement of violations and thereby offer greater assurance of effective implementation of the covenant. This section authorizes the court to award litigation costs, including attorney and expert witness fees, to a substantially prevailing party authorized by this subsection to bring a suit. This provision is based on analogous federal law authorizing citizen's suits. See, e.g., 42 U.S.C.A. §9659 (f).

The first alternative authorizes suit by any person, mirroring the provisions of federal law discussed above. The second alternative is more limited, authorizing suit by any person aggrieved by the alleged breach of the environmental covenant. "Person (or party) aggrieved" is used in both federal and state administrative law. The federal courts, and some state courts, apply a two part test in determining who is a "person aggrieved", asking first if the person has suffered an injury in fact, and second, if the person is arguably within the zone of interests sought to be protected by the statute. See, e.g., National Credit Union Administration v. First Nat'l Bank and Trust Co., 522 U.S. 479 (1998). The Model State Administrative Procedure Act, §5-106(a)(5) uses a three part analysis: (i) has the agency action prejudiced the person, (ii) was the agency required to consider the person's interests in taking the challenged action, and (iii)will a judgment in favor of the person substantially eliminate or redress the harm.

Subsection (c) also establishes enforcement priority for such citizen suits. The agency has the first opportunity. If the department[insert name of state regulatory agency for environmental protection] is not the agency which approved the environmental covenant, it has the second opportunity. If either of these brings an action within its specified 60 day time period, that precludes a citizen suit to enforce the covenant so long as the action is being diligently prosecuted. This provision is based on the citizen's suit provisions common in many federal environmental regulatory statutes.]

The five year reporting period of subsection (e) mirrors the reportingreview requirements for the land use controls used as part of aan environmental cleanup remedy that does not provide for unrestricted use under the federal superfund program.

SECTION 11. COORDINATION BY LOCAL GOVERNMENT.

(a) The agency shall send a copy of an environmental covenant and any modification or termination thereof to the affected local government at the time the covenant, modification or termination is recorded.

[(b) The agency may evaluate whether an application for a building permit or new land use on real estateproperty subject to an environmental covenant is consistent with the covenant. If the agency determines that issuance of the building permit or approval of the new land use will violate the covenant, the agency shall so notify the affected local government. The agency's determination is binding on the affected local government.]

Effective implementation of environmental covenants will require cooperation between the agency and the affected local government which has jurisdiction over building permits and local land use decisions. Section 5 of this Act provides that an environmental covenant cannot authorize a land use that is prohibited by local law, and that an environmental covenant may restrict a land use that is authorized by local law. In subsection (a) this Section requires the agency to notify all affected local governments of the creation, modification or termination of an environmental covenant. Section 6 (b) authorizes an environmental covenant to require notice of applications for building permits or land use changes to be given to the agency. In this way, both the affected local government and the agency will have the information needed to coordinate their efforts and each avoid action which conflicts with action by the other.

[Where the agency determines that a building permit or land use change will violate the covenant, subsection (b) provides that the agency's determination will be binding. Of course, the agency's determination remains subject to available judicial review under applicable state or federal administrative law.]

SECTION 12. MARKETABLE TITLE.

An environmental covenant may not be extinguished, limited, or impaired by application of [insert reference to state Marketable Title statute][if notice of the existence of the covenant is provided to interested persons by any of the following means:

(1)visible evidence of the existence of the covenant located on any part of the real estateproperty subject to the covenant in the form of a sign, monument or other physical facility;

(2) a map showing the location of the real estateproperty subject to the covenant that is publicly displayed in the office of the custodian of the land records of the affected local government or in the registry maintained by the department[insert name of state regulatory agency for environmental protection];

(3) the land recording system maintained by the custodian of the land records of the affected local government, or by the State, indexes all real estateproperty transactions on a universal parcel numbering system rather than on a system based on grantors and grantees;

(4) the land recording system in which the environmental covenant is recorded, [or the registry created pursuant to Section 7(b) of this [Act]] is accessible by electronic means as of [the effective date of this [Act]]; or

(5) [insert other means by which interested persons may secure actual knowledge of the existence of older environmental covenants.]]

Reporter's Notes

This exception to the state Marketable Title statute is analogous to exceptions commonly made for conservation and preservation servitudes. Restatement of the Law of Property Third (Servitudes) § 7.16 (5) (1998). It is based on the public importance of ensuring continued enforcement of environmental covenants to protect human health and the environment, as well as the relatively low cost of extending title searches to the registry of environmental covenants to be kept by the department[insert name of state regulatory agency for environmental protection] under Section 7(c) of this [Act].

[ In jurisdictions which index instruments in the land records by grantor and grantee names, there is concern that environmental covenants that are older than the statutory period specified in the Marketable Title Act, typically either 40 or 60 years, may be difficult to find even in the new registry, and, as a result, may be excluded from coverage under title insurance policies. Thus, five means of giving notice of the environmental covenant are specified. Where notice is given by one of these means, the Marketable Title Act will not extinguish or impair the environmental covenant. This problem will arise only wWith environmental covenants created pursuant to the [Act], this problem will arise only after the statutory period of the Marketable Title Act.]

If there is any question whether a specific environmental covenant is exempt from the requirements of the Marketable Title Act, the agency should comply with that Act by re-recording the covenant within the Marketable Title Act's specified statutory period. This will insure that the covenant is not extinguished under the Marketable Title Act.

[SECTION 13. NOTICE.

(a) To be effective, a notice of an environmental covenant must contain the following information:

(1) a legally sufficient description of the real estateproperty, and any available street address;

(2) the name and address of:

(A) the owner of the real estateproperty;

(B) the agency and the holder, if other than the agency; and

(C) the name and address of any other person identified in the covenant that is specifically authorized to enforce the covenant;

(3) a statement that:

(A) the covenant imposes significant restrictions and obligations with regard to permissible activities on and uses of the real estateproperty; and

(B) the restrictions and obligations [are likely to] affect all persons having an interest in the real estateproperty.

(4) a statement that the following are available in a registry at the [insert name and address of Department] , disclosing any and the method ofstate regulatory agency for environmental protection] , disclosing the method of any electronic access:

(A) the environmental covenant as executed; and

(B) any other information required by the Agency; and

(5) a statement that the Notice is filed pursuant to this [Act].

(b) A notice is sufficient if it is in the form of Official Form set forth in Section 14.

Reporter's Notes

A description of the property under subsection (a)(1) may include identification by latitude/longitude coordinates.

This section and the following one should be used only by states that require creation of a registry of environmental covenants pursuant to Section 7(b) of this Act. The notice specified in this Section may be recorded in the land records in lieu of recording the environmental covenant. However, such a notice should only be authorized if the registry is established and the environmental covenant is recorded there. Where there is no separate registry, then the environmental covenant should be recorded in the land records and this notice should not be used.]

[SECTION 14. OFFICIAL FORM : NOTICE OF ENVIRONMENTAL COVENANT.

A statement in substantially the following form, executed with the same formalities as a deed in this State, satisfies the requirements of Section 13.

OFFICIAL FORM : NOTICE OF ENVIRONMENTAL COVENANT

• This notice is filed on the land records of the [city/town/county] of [insert name of jurisdiction in which the real estateproperty is located] pursuant to Sections 7 and 13 of the Uniform Environmental Covenants [Act]. The [Act] has been codified in this State at [insert statutory reference].



• This notice and the covenant to which it refers impose significant legal restrictions and obligations with respect to the future use of and activities on the property described below. Those restrictions and obligations are likely to affect all persons having an interest in that property.



• A legally sufficient description of the property is attached as Exhibit A to this notice. The address, if available, of the property which is subject to the environmental covenant is [insert address of property].



• The owner of the real estateproperty on the date of this notice is [insert name of current legal owner of the Property]. The address of the owner is [insert the owner's current address as shown on the tax records of the jurisdiction in which the Property is located].



• The other parties to the covenant and their addresses are:



• [insert name and address of the agency and [the departmentstate regulatory agency for environmental protection] if it is not the agency ];



• [Insert names and addresses of all other parties to the covenant]; and



• [Insert names and addresses of any third party beneficiaries].



• The environmental covenant regarding the real estateproperty was signed by all the parties on [insert date on which the last party signed the covenant]. The covenant becomes effective for all purposes on the date this notice is recorded on the land records of all jurisdictions in which the property is located. This notice remains effective for all purposes until a release of this notice is signed by the then owner of the property and by the agency and recorded.



• The full text of the covenant is on file and available for inspection and copying in the registry maintained for that purpose by the [insert name of state regulatory agency for environmental protection department in this state] at [insert address and room of building in which the registry is maintained]. [The covenant may be found electronically at [insert web address for Covenant]].

Dated at ________, ________ this ____ day of ________, ________.

Witness as to Owner NAME OF OWNER

______________________________ ______________________________

By

______________________________

Witness as to Agency NAME OF AGENCY

______________________________ ______________________________

By

______________________________

Witness as to Other Parties NAME OF OTHER PARTIES

______________________________ ______________________________

By

______________________________

ACKNOWLE DGMENTS

[INSERT STANDARD FORM OF ACKNOWLEDGMENT IN STATE]

[ATTACH PROPERTY DESCRIPTION AS EXHIBIT A]

SECTION 15]

SECTION 15. REGULATIONS.

The [director of the state regulatory agency for environmental protection] shall have the power to formulate, adopt, amend and repeal [rules][regulations] consistent with this [Act] and necessary to implement this [Act].

This Act authorizes adoption of rules or regulations needed to implement the Act. The Act does not address the procedural requirements for this adoption as those will be supplied by other state administrative procedure law.

SECTION 16. UNIFORMITY OF APPLICATION AND CONSTRUCTION.

In applying and construing this Uniform Act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among States that enact it.

SECTION 167. SUPPLEMENTAL PRINCIPLES OF LAW APPLICABLE.