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SIGNIFICANT CHANGES FOR CLASSIFICATION EXCEPTION AREAS AND DEED NOTICES

By: Edward A. Hogan
March 2003

Last month, the New Jersey Department of Environmental Protection (“NJDEP”) adopted sweeping changes to the regulations governing the remediation of contaminated sites, the Technical Requirements for Site Remediation, N.J.A.C. 7:26E. Although these revisions encompass numerous aspects of the site remediation process, perhaps the most significant involve the procedures associated with Classification Exception Areas (“CEAs”) and Deed Notices, the institutional controls which permit elevated levels of contaminants to remain at a site after active remediation has been completed. These institutional controls have been pivotal to cost-effective redevelopment of “Brownfields,” under-utilized properties for which redevelopment would be economically impractical without such regulatory relief.

CEAs temporarily condone the presence of pollutants in excess of the Ground Water Remediation Standards (“GWRS”), typically for the projected period necessary for natural attenuation and degradation processes to achieve GWRS. The obvious advantage has been that such an approach is considerably more cost-effective than attempting to reach GWRS through the application of active remedial technologies.

Deed Notices, often in conjunction with engineering controls such as pavement caps, allow elevated levels of soil contamination to remain permanently on-site. The Deed Notice binds the current property owner to certain notice requirements as well as to the obligation to inspect and maintain any engineering controls.

The changes impose a number of new procedures. While NJDEP approves CEAs only after groundwater contamination is fully delineated and the anticipated natural degradation and attenuation calculated, confirmation sampling has only been required at the end of the CEA period when the property is in a groundwater use area. Now, the original responsible party must always perform sampling at the conclusion of the CEA period to demonstrate that the GWRS have been achieved, even if the property is not in a groundwater use area. Moreover, the original responsible party must submit detailed inspection and protectiveness evaluation reports every two years throughout the entire CEA period.

These new provisions will present a number of logistical difficulties for responsible parties. Such parties must now revisit and re-evaluate the subject area every two years. In many circumstances, these investigations were triggered because the property was being sold or the business operations terminated, and thus access and cooperation from the current owners may not always be readily available. The requirement for final confirmatory ground water sampling will also pose a dilemma: the choice may be between leaving monitoring wells open for several years so that they might be utilized for confirmation sampling but recognizing that they could very well be damaged or vandalized, thereby posing an excellent conduit to introduction of new contaminants from the surface, or closing monitoring wells once the CEA is granted and later having to re-install monitoring wells in order to perform confirmatory sampling.

The new requirements for Deed Notices now clarify that the obligation for regular maintenance and biennial reporting is a joint and several obligation of the current owner and the original responsible party. The rather well-settled principle that the Deed Notices “ran with the land” and thus the obligations for inspection and maintenance were those of the current property owner only, is now disrupted by the NJDEP’s position that the original responsible party shares those obligations in perpetuity. Moreover, a subsequent non-responsible party property owner selling a Deed Noticed property must now notify NJDEP in order to extricate himself from the regulatory obligations and the attendant penalty exposure.

The NJDEP has specifically made all of these requirements retroactive to all previously approved CEAs and Deed Notices. Thus, those who completed remediations by utilizing CEAs or Deed Notices will need to revisit matters they understood to be completed when No Further Action letters were issued.