DEEP: Covenant Not to Sue Fact Sheet

Covenant Not to Sue

 
A Covenant Not to Sue is an agreement between DEEP and a prospective purchaser or owner of a polluted site that DEEP will not institute a claim against a party who has or will clean up that property.  Two types of Covenants Not to Sue are available, pursuant to CGS Section 22a-133aa and CGS Section 22a-133bb, respectively.  CGS Section 22a-133cc requires any person seeking a Covenant Not to Sue to submit sufficient information to DEEP to allow DEEP to grant the Covenant.
 
Who Is Eligible
  • A prospective purchaser of contaminated property,
  • A current owner of contaminated property,
  • A lending institution to which a prospective purchaser or owner has conveyed a security interest in the property, or
  • A successor of the holder of a Covenant issued pursuant to CGS section 22a-133aa.
  • An agreement that DEEP will not require remediation of previously unknown contamination resulting from a release that predates the effective date of the Covenant and is determined to exist after the remediation is deemed complete.
  • 22a-133aa Covenant Not to Sue Application Form must be submitted to DEEP with:
    • a Remedial Action Plan (RAP) to be incorporated into the Covenant;
    • a final Remedial Action Report (RAR) with certification no releases have occurred after the date of the RAR; or
    • a brownfield investigation plan and remediation schedule.
  • Covenant Not to Sue must be shown to be in the public interest.
  • Reports must be approved by DEEP.
 
  • An agreement with DEEP that additional remediation will not be required to address changes to the remediation standards after the Covenant is executed.
  • 22a-133bb Covenant Not to Sue Application Form must be submitted to DEEP with:
    • a Remedial Action Plan (RAP) to be incorporated into the Covenant;
    • a final Remedial Action Report (RAR) with certification that no releases have occurred after the date of the RAR; or
    • a final RAR (verification report) with LEP verification under CGS Section 22a-133x or CGS Section 22a-134a and certification that no releases have occurred after the date of the RAR.
  • Reports must be approved by either DEEP or a Licensed Environmental Professional.
 Provisions that Apply to Both CGS Section 22a-133aa and CGS Section 22a-133bb
  • A person or entity responsible for causing the contamination is not eligible for a Covenant Not to Sue nor can it be a successor to the holder of a Covenant.
  • The property must be remediated in accordance with DEEP 's Remediation Standard Regulations (RSRs) in effect on the effective date of the Covenant.
  • Any Environmental Land Use Restriction (ELUR) necessary to comply with the RSRs must be recorded on the land records and must remain in effect.
  • Property must be redeveloped for productive use or continue productive use.
  • A Covenant Not to Sue with a lending institution shall transfer to a successor lending institution.
  • Remediation is deemed complete when the Commissioner has approved the remediation or a Licensed Environmental Professionalís verification that the remediation of the property is complete and the Commissioner has either decided an audit is not warranted or the verification has survived the audit process.
 
Fees
 
CGS Section 22a-133aa requires a fee of 3% of the value of the property appraised as if it is uncontaminated.  Fees are payable to the Department of Energy & Environmental Protection by a bank check or money order due on the date Covenant Not to Sue is issued.
 
The Commissioner may approve a fee payment schedule with an approved Brownfield Investigation Plan and Remediation Schedule, which will be incorporated into the Covenant.
 
No fee is required for:
  • Covenants under CGS Section 22a-133bb;
  • Covenants issued to a successor in interest to the original Covenant;
  • Covenants issued in connection with a remediation project conducted under CGS Section 22a-133m
  • Covenants issued to municipalities, municipal economic development agencies or nonprofit economic development corporations formed to promote the common good, general welfare and economic development of a municipality that is funded, either directly or through in-kind services, in part by a municipality and such corporation's officers and directors; or

What a Covenant Does Not Do

  • It does not bar third party damage claims.
  • It does not relieve anyone from responsibility for cleaning up new releases of oil or hazardous substances that occur after the Covenant takes effect.
  • It does not prevent DEEP from requiring further remediation of the property if the information provided by the person seeking the covenant was incomplete, false, or misleading.
  • A GCS Section 22a-133bb Covenant does not prevent DEEP from requiring additional action if new information confirms the existence of previously unknown contamination that resulted from a release prior to effective date of the Covenant, or if the threat to human health or the environment is increased beyond an acceptable level due to substantial changes in exposure conditions at the property.

Content Last Updated May 1, 2017

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