This past year, the Ohio
General Assembly passed Am. Sub. H.B. 516 which "codified" intoOhio's
real estate laws the term "environmental covenant" which operates
as a deed restriction on real property.
This term has been previously known as a "restrictive covenant
that runs with the land" and had before only been recognized by common
law. The bill defined an
"environmental covenant" as a "servitude arising under an
environmental response project that imposes activity and use
limitations." The bill
defined an "environmental response project" as "a plan or work
performed for environmental remediation for protection of ecological
features. Examples include: (1) 'corrective action' or
'post-closure care' pursuant to the Resource Conservation and Recovery Act of
1976, under Ohio's Underground Storage Tank Regulations or under Ohio's solid
or hazardous waste laws; (2) a 'removal' or 'remedial action' pursuant to the
Comprehensive Environmental Response Compensation & Liability Act of
1980; (3) a 'no further action letter' associated with a covenant not to sue
pursuant to Ohio's Voluntary Action Program; (4) a mitigation requirement
associated with Ohio's Water Quality Certification Program pursuant to
Section 401 of the Clean Water Act; or (5) pursuant to a grant commitment,
loan agreement, or supplemental environmental project as part of any orders
issued pursuant to Ohio's Clean Water Act.
The law provides that once the environmental covenant is
executed and recorded with the County Recorder's office, the grantee of an
environmental covenant (usually the Ohio EPA) is a "holder" of an
interest in the real property. In
order to be valid, the covenant must contain: (1) language that the instrument is an
"environmental covenant executed pursuant to R.C.
5301.80 to 5301.92 of the Revised Code;"(2) a legally sufficient
description of the real property; (3) a description of the activity and use
limitations on the property; (4) the specific notice requirements before
implementing (a) changes in the use of the property, (b) application for
building permits, or (c) proposals for any site work affecting the
environmental contamination on the property; (5) the name or identity of
every holder of the property; (6) rights of access to the property in
connection with implementation or enforcement of the covenant; (7) the
signature of the applicable agency, every holder, and every owner of the fee
simple that is subject to the environmental covenant; and (8) an
identification of the name and location of any administration record for the
environmental response project.
In addition, the covenant may include: (1) a requirement for period reporting
describing the compliance with the environmental covenant; (2) a brief
narrative description of the contamination on the property, its remedy, the
contaminants of concern, the pathways of exposure, the limits of exposure,
and the location and extent of contamination; (3) terms which define the
limits or termination of the covenant; or (4) rights of the holder (in
addition to the right to enforce the covenant on all subsequent owners).
Environmental Covenants must be provided to (1) each person that
signed the covenant; (2) each person holding a recorded interest in the
covenant; (3) each person that is subject to the covenant; (4) each unit of
local government that is subject to the covenant; and (5) any other person
that the agency requires. The
environmental covenant "runs with the land," applies to any
subsequent owner of the land, and is valid and enforceable even if (1) it is
not appurtenant to an interest in real property; (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 by common law; (4) it
imposes a high negative burden; (5) it imposes an affirmative obligation on a
person having an interest in the real property; (6) the benefit or burden
does not touch or concern real property; (7) there is no privities of estate
or contract; (8) the holder dies, ceases to exist, resigns, or is replaced;
or (9) the owner of an interest and the holder are the same person.
The law provides that although nothing in R.C.
5301.80 to 5301.92 shall be construed to restrict, affect, or impair the
rights of any person under the Revised Code or common law to enter into or
record a restrictive covenant, institutional control, easement, servitude or
other restriction on the use of property that does not meet the requirements
or R.C. 5301.82(A), any such restriction entered
into or recorded without the permission, approval or consent of an agency,
political subdivision, regulatory body, or other unit of government is not an
"environmental covenant" and is not binding on the unit of
government.
The "environmental covenant" must be filed in the same
manner as a deed in the county recorders' office of the county in which the
real property is located. A
"holder" is treated as a "grantee." An Environmental Covenant is perpetual
unless it is (1) limited by its terms to a specific duration or by the
occurrence of a specific event; (2) terminated by consent; (3) terminated by
foreclosure of an interest that has priority over the covenant; (4)
terminated or modified in an eminent domain proceeding and (a) the
agency that signed the covenant is a party to the eminent domain proceeding,
(b) all persons identified in R.C. 5301.90(A) and
(B) are given notice of the eminent domain proceeding, and (c) the court
determines after a hearing that the termination or modification will not
adversely affect human health or safety or the environment; or (5) if the
agency that signed the covenant has determined that the intended benefits of
the covenant can no longer be realized, and a court, under the doctrine of
"changed circumstances" may terminate the covenant or
"reduce" its burden on the real property.
Environmental Covenants can only be amended or terminated by
consent if the termination or amendment is signed by all of the
following: the applicable agency,
the current owner of the fee simple of the real property, each person that
originally signed the covenant (unless the person executed a written waiver
of the right to consent or a court find that the person no longer exists or
cannot be located or identified with the exercise of reasonable diligence).
The law grants the following individuals the ability to maintain
a civil action for injunctive or other equitable relief for violation of an
environmental covenant: (1) a
party to the covenant; (2) the environmental protection agency; (3) the
applicable agency to whom is granted an interest as a holder of the covenant;
(4) any person whom the covenant grants the authority to maintain an action,
(5) any person whose interest in the real property or collateral liability
may be affected by the alleged violation of the covenant; (6) any unit of
government in which the real property is located. However, the law makes clear that a
person is not responsible for or subject to liability for environmental
remediation solely because it has the right to enforce an environmental
covenant.