Maintaining Engineering and Institutional Controls on Residential Property Conversions: Whose Obligation?

By: Wayne C. Howitz, Assistant Director
Industrial Site Evaluation Element

How to protect human health from the risk posed by hazardous substances at contaminated sites has been a hotly debated topic in New Jersey and across the country. Representatives of some New Jersey industries have long argued that excavation and removal remedies were too expensive in many soil cleanup cases, that they should be allowed to leave contamination onsite, and that they could successfully limit human exposure to that contamination via other, less expensive means. These calls for change have not gone unheard.

New Jersey allows the person responsible for conducting the remediation to use engineering and institutional con-trols as part of a remedial action to ensure that exposure is eliminated when concentrations of soil contaminants remain above the unrestricted direct contact use criteria. There has been a growing debate, however, concerning who has the responsibility to inspect and maintain engineering and insti-tutional controls that are implemented as part of a remedial action for a contaminated site. The purpose of this article is for the Department to continue a discussion of the issues by soliciting a broader dialogue among all of the various stakeholders. See proposed rulemaking at 30 NJR 2373.

The use of institutional controls as a notice mechanism to interested persons is not a new concept. A wide variety of institutional controls are used throughout the United States as mechanisms to provide notice to environmental conditions that pose a risk to human health and the environment from hazardous substances and other contaminants. See, for example, John Pendergrass, "Use Of Institutional Controls as Part of a Superfund Remedy: Lessons from Other Programs," 26 ELR 10111 (1996). States such as California, Massachusetts, Michigan, Washington as well as the United States Environmental Protection Agency utilize institutional controls. See, for example, U.S. EPA, Institutional Controls: A Reference Manual," Workgroup Draft - March 1998.

Institutional controls are mechanisms the Department uses, either alone or as a supplement to engineering controls. These institutional controls are designed to provide information concerning appropriate limits on human activities at or near a contaminated site in order to ensure the effectiveness of the remedial action. Institutional controls are necessary for contaminated sites where contaminants will remain after the implementation of the remedial action in concentrations above the unrestricted (residential) use criteria. The most common institutional control is a deed notice. A deed notice provides notice about the conditions of real property to which it is attached. Historically since at least 1991, the Site Remediation Program has used deed notices on a case-by-case basis where soil contaminants remain onsite at concentrations that exceed the residential cleanup criteria. The use of these institutional controls, however, has raised certain issues that warrant further policy development.

Departmental Concerns

After several years of the Department's use of institutional controls as part of remedial actions for contaminated sites, the Legislature in 1993 required the use of notices as part of certain remedial actions. N.J.S.A. 58:10B-13a(2). This year, the Legislature amended that statute, requiring that the notice be filed in the same manner as deeds and other interests in real property. There are also other statutory responsibilities related to engineering and institutional controls.

These responsibilities begin with the selection and implementation of a remedial action consistent with, among other things, the Brownfield and Contaminated Site Remediation Act. The person responsible for conducting the remediation has the burden to demonstrate that the remedial action is protective of public health, safety and the environment. N.J.S.A. 58:10B-12g. One of the specific factors that the person responsible for conducting the remediation must demonstrate is the technical performance, effectiveness and reliability of the proposed remedial action. For a remedial action that includes leaving soil contamination behind above the cleanup criteria that would allow for restricted use of the site, a deed notice is required in order to put people on notice of the environmental conditions of the property. Thus, the person must demonstrate that a deed notice will continue to provide the appropriate notice for as long as the contamination remains at the site above residential cleanup criteria.

The Department has recently become more concerned with the effectiveness of institutional controls as part of the remedial action for a contaminated site. Research has shown that institutional controls "are prone to failure due to changes in priorities, funding, the governmental system, or other conditions" and that "the institutions responsible for spreading the word do not do so." Environmental Law Institute, "Institutional Controls In Use," Research Report, September 1995.

In addition, the Department is seeing a growing number of requests for engineering and institutional controls as part of remedial actions at industrial sites that are undergoing redevelopment for residential use. Increasingly, the parties are raising the issue as to who is responsible for the inspection and maintenance of the engineering and institutional controls.

Who Has the Obligation?

There are three classes of persons who may have the responsibility to maintain any engineering and institutional controls that are part of the remedial action at a contaminated site: The person responsible for conducting the remediation, a person in any way responsible for the hazardous substances causing the contamination, and subsequent owners and operators of the site.

The person responsible for conducting the remediation of a contaminated site, who may or may not be a responsible party under the Spill Compensation and Control Act (Spill Act), has certain responsibilities concerning the engineering and institutional controls.

Another class of persons with this responsibility are the persons who are legally responsible for the contamination. Under the Spill Act, N.J.S.A. 58:10-23.11, this includes any person who is in any way responsible for the hazardous substance which is discharged. N.J.S.A. 58:10-23.11g. This liability exists whether or not the responsible party is actually involved with the remediation.

There is another class of persons who also have this concurrent responsibility. Beginning in 1993, each subsequent owner and operator of any real property for which a remedial action has been implemented that includes engineering or institutional controls is also obligated to maintain those controls as the Department requires. N.J.S.A. 58:10B-13c. This responsibility is further emphasized in the language in the No Further Action/Covenant Not to Sue (NFA/CNS) letter as required by the Brownfield and Contaminated Site Remediation Act. Persons conducting the remediation are required to provide notice to the Department upon address change and only subsequent purchasers who comply with the provisions for the engineering/institutional controls receive the protections offered by the NFA/CNS.

The responsible party and the person responsible for conducting the remediation, when different from the responsible party, argue that their obligation should end when the property is transferred, consistent with their reading of the Brownfield Contaminated Site Remediation Act. Few "subsequent" owners and operators have participated in this debate. Shifting this obligation solely to the subsequent owners and operators becomes more complicated when there are multiple concurrent subsequent owners and operators. This may be the case in transfers to multiple residential owners of condominiums and townhouses. In these scenarios there may be owner associations responsible for the upkeep and maintenance of common areas that could assume these obligations. In other situations an appropriate mechanism is not as clear.

In situations where single family dwellings are constructed upon properties with engineering and institutional controls, not all homeowners can be expected to have the wherewithal to comply with these obligations. The Department is concerned in this situation that the homeowner who has been made fully aware of the engineering and institutional controls at the time of purchase may forget the inspection and maintenance requirements that need to be conducted and reported to the Department.

Under the proposed amendments to the Technical Requirements for the Remediation of Contaminated Sites, the Department has clarified that the person responsible for conducting the remediation has the responsibility of maintaining and inspecting all engineering and institutional controls. See proposed amendment N.J.A.C. 7:26E-6.4(g) at 30 NJR 2393. The extent to which that person retains this responsibility after transfer of the property, or upon implementation of the remedial action when that person is not the owner of the property, is the area in which the Department specifically solicits additional discussion.

The Department presents the following examples to facilitate the discussion of these issues.

1. A responsible party implements a remedial action at:
   
   
   1. Property it does not own or lease, such as a landfill
      
      
   2. Its own property and then sells the property for industrial/commercial use:
      
      
      1. To a single owner
      2. To multiple owners
         
         
   3. Its own property and then sells the property for mixed industrial/commercial and residential use:
      
      
      1. To a single owner
      2. To multiple owners
         
         
   4. Its own property and then sells the property for residential use:
      
      
      1. To a single homeowner
      2. To multiple homeowners
         
         
   5. Its own property and then the property goes through multiple residential transfers, with the property ending up in the hands of a church or other nonprofit group
      
      
   6. An ISRA-subject owner implements a remedial action at its property
      
      
      1. After triggering ISRA itself
      2. After a tenant triggers ISRA
         
         
   7. An ISRA-subject tenant implements a remedial action at
      
      
      1. Its leasehold after triggering ISRA
         
         
2. A non-responsible party developer implements a remedial action at:
   
   
   1. Its own property, then retains title, but leases the property
      
      
   2. Its own property and then sells the property for industrial/commercial use:

      To a single owner
      To multiple owners
      
      

   3. Its own property and then sells the property for mixed industrial/commercial and residential use:

      To a single owner
      To multiple owners
      
      

   4. Its own property and then sells the property for residential use:

      To a single owner
      To multiple owners
      
      

   5. Property it does not own or lease

Further Comments and Discussions

The Department welcomes all written comments that any of the stakeholders wish to make to enhance the discussions on this issue. Written comments may be forwarded to:

Assistant Commissioner Richard Gimello
Site Remediation Program
P.O. Box 028
401 East State Street
Trenton, New Jersey 08625-0028