In a move much anticipated by the real estate, environmental, financial, and business communities, the Connecticut Department of Energy and Environmental Protection (CT DEEP) released this week its Release-Based Cleanup Regulations (PR2024-025) to replace the much maligned Connecticut Transfer Act governing the remediation and transfer of property within the state. The new regulations, which are set to go into effect March 1, 2026 (pending approval by the state legislature’s Regulation Review Committee) were designed to address some of the criticism lobbed at the Transfer Act—namely that the Act created excess regulatory burden that discouraged some owners from trying to sell properties and ignoring the need to clean up contamination.
CT DEEP sought participation from leaders in the environmental legal and consulting community in the rulemaking process, and the regulations were negotiated and laboriously drafted over the last four years. The new regulations call for addressing contamination based on when property owners discover new or historic releases, independent of any potential property transfer. Property owners will be incentivized to investigate and remediate releases quickly to avoid having their sites getting placed in tiers that will require annual fees to be paid and more professional oversight based on risk if the site does not comply with current standards within a year of discovery. Importantly, property owners may wish to prevent potential purchasers from sharing the results of their environmental due diligence with them to avoid obtaining knowledge of a release that would then require remediation, even if the property were not conveyed, leaving the owners with no funds from a sale to perform the cleanup.
With the current draft likely undergoing some revisions during the regulatory review process, current property owners and those considering buying or selling property should carefully monitor future developments.
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