Articles

Practical Problems with Notices of Activity and Use Limitations

By Christopher B. Myhrum (Originally published in the MCLE's New England Environmental Conference.)

I. SCOPE NOTE

Activity and use limitations (AUL's) are the Massachusetts Contingency Plan's (MCP) sanctioned means to establish once disfavored "institutional controls" on contaminated real estate. AULs restrict conduct indefinitely, allowing risk assessors to incorporate assumptions about limitations on exposure pathways to oil or hazardous materials released into the environment. An appropriately prepared AUL can be the essential element of a disposal site cleanup alternative that eliminates or minimizes removal, treatment or other management of contaminated media, with potentially very substantial cost savings. This article briefly presents a historical context surrounding AUL development, then identifies and addresses practical problems that arise in connection with preparing and implementing Notices of Activity and Use Limitations, by far the most frequently used of the three forms of AULs set forth in the MCP.

II. A PAGE OF HISTORY AND CONTEXT

When the effort to identify and remedy uncontrolled releases of oil and hazardous materials in Massachusetts accelerated after the 1983 enactment of M.G.L. c. 21E (Chapter 21E), responsible parties and regulators inevitably confronted the same question nagging the federal Superfund program: How clean is clean? Private parties paying for cleanups protested that no practical purpose was served by requiring reduction of contaminant levels at, say, a chemical processing facility to such levels as would adequately protect human health were the exposures to occur at a family residence. The evolving federal Superfund and state Chapter 21E programs viewed offers to restrict access to contaminants through fencing, paving or similar barriers as unsuitable long term solutions to address risks presented by released chemicals. While engineered barriers and so-called "institutional controls," including deed restrictions limiting access to and uses of property, might be employed to reduce risk temporarily, they were generally not acceptable as permanent solutions, especially where removal or treatment to reduce or eliminate contamination could be feasibly accomplished.

Debate about the suitability, as a policy matter, of using deed restrictions to control real estate uses and activities continues to this day. However, during the 1980s, the consequences of the Superfund and Chapter 21E liability schemes and the amount of response costs being incurred at even relatively routine release sites became ever more apparent in the abandonment or mothballing of locations where release had occurred or were suspected to have occurred. Abandoned or under utilized sites, generally described as Brownfields, squarely presented the issue of how to contain cleanup costs to levels that could be financed through mortgage or other equity interests in the contaminated property. Across the board cleanup to levels deemed safe for residential exposures just cost too much in many circumstances.

In 1992, the Massachusetts Great and General Court expressly authorized restrictions on the uses of property as means to "carry out the purposes" of Chapter 21E, amending Section 6 of Chapter 21E with what now appear as the second through fourth paragraphs. St. 1992, c. 133, § 301. The statutory underpinnings for AULs were part and parcel of the 1992 overhaul of Chapter 21E and the creation of the privatized cleanup system featuring the prominent and essential role of Licensed Site Professionals (LSPs). The revisions to the MCP necessary to implement the 1992 statutory changes were promulgated effective October 3, 1993, and introduced Subpart J of the MCP, 310 CMR 40.1000 et seq., Response Action Outcomes, and the regulations and forms governing AULs.

III. IMPLEMENTING AULS

Experienced environmental practitioners and savvy newly anointed LSPs immediately recognized the savings in cleanup costs that AULs could offer. However, AULs needed to be accepted in the real estate and mortgage lending arenas, where Chapter 21E problems had cratered so many promising transactions. Traditionally conservative, the lending community did not rush to embrace a new statutory creation encumbering title that had to be based upon the opinion of member of a just recently created profession charged with privately accomplishing the objectives of an overhauled and jargon filled regulatory program. Given the anticipated sequence of Response Action Outcome submittal (when AULs would be first used), DEP random or targeted audit, DEP identification of deficiencies or violations and a submitting party's further response actions to correct deficiencies or violations, it seemed plain that a "common law," so to speak, of AUL requirements to fill in the interstices of the regulations would be a long time in coming.

Compounding this uncertainty was the new forum in which AUL regulatory requirements forced those desiring to use AULs to function. Many lawyers with extensive experience in particular fields know only enough about Registries of Deeds and Land Court to feel certain they are minefields of technical issues, practical problems and traps for the unwary. While some LSPs in their pre-LSP consulting lives might have had occasion to review title in a general way for a disposal site or neighboring properties from time to time, registries and Land Court were not familiar fields of play. Of course, registry and Land Court personnel needed to become familiar with AULs and how to handle them as well.

Although the MCP provided for three different kinds of AULs, from the outset it was obvious that Notices of Activity and Use Limitations provided for in MCP 40.1074 and Form 1075 would be the AUL used in almost all cases. Nobody has or likely ever will describe the AUL regulations, forms or implementation process as elegant. However, the 1993 MCP may be said to have presented AULs in a manner that was deceptively simple when viewed in isolation and without at least some experience with title, signatory authority and agency issues and law. Some number of persons submitting Response Action Outcomes dependent on AULs relied upon LSPs to accomplish the particulars of MCP compliance for AULs without consulting legal counsel about the scope, form or substance of AULs or the potential implications of AUL implementation on existing agreements affecting interests in the real estate subjected to the AUL.

Beyond paperwork compliance and legal implications of AULs were basic MCP compliance issues that AUL implementation triggered, details of which escaped the notice of many well intentioned responsible parties and their LSPs. First and foremost, the MCP requires AULs "when Exposure Point Concentrations.exceed the S-1 standards." MCP 40.1012(2)(a)1. See also MCP 40.1012(4). (An AUL may be voluntarily implemented for other purposes such as merely giving notice when Method 1 is used, MCP 40.1012(3)(a)-(h)). Second, AULs initially could not help achieve a permanent solution Response Action Outcome at any site where contaminant levels exceeded Upper Concentration Limits (UCLs), the levels at which the MCP presumes unacceptable risk to public welfare. Currently, an AUL can be used for a permanent solution at a site where UCL exceedances are located greater than fifteen feet below ground surface. MCP 40.1012(2)(a)3. Third, any reliance in a Method 3 risk assessment upon reduced exposure due to limited site use requires an AUL to support the Response Action Outcome. Fourth, AULs cannot be used to limit exposures to drinking water except for very limited circumstances requiring use of a Grant of Environmental Restriction. In short, while AULs can support outcomes that leave soil contamination in place, an attendant cost is usually more detailed study at the risk assessment stage.

IV. GUIDANCE TO THE “RESCUE”

DEP personnel became aware of confusion and misunderstandings about where, how and when AULs could and should be used rather soon after in the regulated community the 1993 MCP was promulgated. Training programs for LSPs and participation by DEP lawyers in Licensed Site Professional Association and Massachusetts Continuing Legal Education seminars reflected DEP’s efforts to promote appropriate AUL implementation. Even with clarifications and revised forms promulgated with the 1995 revisions to the MCP, as late as July and September 1997 DEP was advising LSPs in the DEP Bureau of Waste Site Cleanup (BWSC) Audit Program “Helpful Hints” that screening of AULs indicated “that several LSPs may be interpreting the public involvement requirements for notification to local officials incorrectly” and Response Action Outcomes relying on reduced exposure potentials and limited future site uses and activities must be supported by AULs. DEP BWSC Audit Program—Helpful Hints, http://www.state. ma.us/dep/bwsc/files/audits/ hints1.htm.

Problematically, with each inadequate or inappropriate AUL recorded or registered came the potential consequence that audit would reopen sites for which permanent solution Response Action Outcomes had been submitted to DEP, such that predictability and finality—goals of the MCP revisions and the privatized system—could be perceived as still eluding the disposal site cleanup process in Massachusetts. The continuing effort to enact a Massachusetts Brownfields Act through the mid-1990s heightened legislative and public awareness of AULs and increased the level of attention paid to how AULs were being used to accomplish outcomes at disposal sites.

AULs were a subject of discussion in the Draft and Final Generic Environmental Impact Reports on the redesigned Waste Site Cleanup Program, with recommendations to seek streamlining opportunities as further regulations were developed. While DEP would eventually develop separate audit checklist forms for discrete periods of time when different MCP provisions governing AULs were in effect, comprehensive guidance on AULs did not become available until May 1999, when Interim Final Policy #WSC 99-300 was distributed at the direction of Deidre Menoyo, DEP Assistant Commissioner for BWSC. Drafts of the guidance had been circulated as early as February 1997, with a second Draft offered for review in January 1998. Review of the drafts alerted many professionals that previously prepared and recorded or registered AULs fell short of the expectations DEP expressed in guidance. Discouragement was not assuaged by DEP’s development of its AUL AUDIT CHECKLIST for Notices of Activity and Use Limitations implemented from May 30, 1997 through October 29, 1999 (DEP Form AUL-1997)—a ten page document listing 114 separate compliance items.

The Interim Final Guidance is a daunting document, not only thick, but also predictive of its inevitable demise due to the then anticipated statutorily mandated regulatory changes. Especially when compared to some other DEP documents, however, the Interim Final Guidance is well organized and highly readable as a useful reference on specific issues. A series of appendices labeled A-J offer concise “how to” instructions with illustrating examples and check lists. No practitioner involved in preparing and implementing AULs should even consider working without the Interim Final Guidance as a reference, especially since it may so readily be obtained from DEP’s BWSC.

In her May 18, 1999 cover letter distributing the Interim Final Guidance, Assistant Commissioner Menoyo stated: “We hope that this guidance will help people to develop better AULs and to understand what DEP’s auditors will be looking for when they review these documents....In addition, we are now developing proposals for revising the MCP sections that govern AULs…We expect to issue final rules in August 1999. We are planning to review this document in 2000, and update it as necessary at that time.”

V. THE BROWNFIELDS ANGLE

Enactment of the Massachusetts Brownfields Act in August 1998 came in the middle of DEP’s AUL guidance development efforts and was the culmination of a hardball playing political process worthy of the celebrated traditions of Massachusetts law making. Reportedly, passage of the legislation came down to make or break provisions designed to assuage concerns of environmental interests about misuse or overuse of AULs under the MCP. Attached as the final provision of the Brownfields Act was a requirement that DEP target audit every disposal site for which an AUL had been used to reach a Response Action Outcome—not just prospectively, but rather from the time AULs first became a viable Chapter 21E component under the 1992 amendments to the statute and October 1993 MCP. Suspicions about or disinclinations toward AULs are also reflected in the Brownfields Act’s tax credit provisions, where tax credits are reduced from fifty percent to twenty-five percent of response costs at otherwise qualifying sites where AULs are employed to achieve a Response Action Outcome.

An ironic consequence of the mandatory audit for AULs is that parties can now achieve what DEP once maintained would subvert the integrity of the privatized MCP program—forced auditing by persons performing response actions. When the 1993 MCP was being drafted, certain interests in the regulated community asked DEP to include provisions whereby a party could request DEP audit of response actions at a disposal site—perhaps even at the party’s own expense—as a means to promote certainty and finality and facilitate financing for transactions involving contaminated properties. DEP demurred, maintaining that “sought or bought” audits would jeopardize the integrity of the privatized system. Now, post Brownfields legislation, the MCP’s provisions allowing for AULs even when not required enable a party to prompt targeted audit by implementing an AUL whether or not it is necessary for a temporary or permanent Response Action Outcome.

In August 1999, DEP promulgated MCP revisions designed, among other things, to implement Brownfields Act requirements and to incorporate changes recommended through the Generic EIR process. The AUL revisions became effective October 30, 1999, a date which became by a sort of default the divide between perhaps gentle and not so gentle auditing standards for AULs. Terms like amnesty and post amnesty have been used to describe the differences between DEP auditing for pre and post October 30, 1999 AULs, but one probably would be well advised not to become too invested in the concept of amnesty. The AUL auditing burden imposed by the Brownfields Act diverted DEP resources from other auditing issues, especially programmatic problems that merited the full attention and efforts of DEP personnel. Even with the funding legislatively earmarked to finance the AUL auditing effort, DEP nonetheless was compelled to move back and forth between past compliance problems enforcement and future compliance assistance and AUL improvements.

VI. WHAT FELL IN THE CRACKS

There must have been at least some frustration for those who worked hard to accomplish issuance of the Interim Final Guidance while full well knowing that regulations inconsistent with guidance would be soon be finalized and promulgated. When the October 1999 regulations went into effect, essentially five items affecting Notices of Activity and Use Limitations and falling outside the Guidance came into play. A summary of each follows.

A. Use the right form

The October 1999 MCP amendments revised Form 1075, the basic Notice of Activity and Use Limitation Form, and Form 1082B, used to amend Form 1075. Form 1083B was added, designed to simplify the process of terminating a portion of a Notice of Activity and Use Limitation. (Among the revisions identified in the Redline/Strikeout Version of the Fall 1999 Revisions circulated under cover of DEP Commissioner Lauren Liss’s August 31, 1999 correspondence was the addition of a vertical line for “Property Street Address:” in the right hand margin of the first page of the forms, but this change does not appear in the forms as published in the Code of Massachusetts Regulations.) DEP auditors report that review of AUL dependent Response Action Outcomes submitted after October 1999 has shown that at least some parties are unaware of the differences between the pre-and post October 1999 forms and the appropriate usage of the new Form 1083B. AUL audit requires that the form in effect be used when an AUL is recorded or registered. In conjunction with other MCP AUL changes, this can upset arrangements made where Response Action Outcome and AUL documentation was being held in escrow pending the occurrence of particular events. Since escrowed documents are outmoded and unsuitable for submittal to DEP, they need to be redrafted and reexecuted on the current forms and in accordance with the newer AUL requirements.

B. Notice to record interest holders

MCP 40.1074(1)(e) now requires persons recording or registering Notices of Activity and Use Limitations to provided least forty-five days advance notice by certified mail, return receipt requested, to “current holders of any record interest(s) in the area subject to the proposed Notice (including without limitation, owners, lessees, tenants, mortgagees, and holders of easements or licenses)” of the existence and location of oil or hazardous material within the AUL area and the terms of the proposed Notice.

C. Certification Statement

MCP 40.1074(1)(e) is backed up by MCP 40.1074(1)(f), which requires persons signing a Notice of Activity and Use Limitation to submit a statement on a DEP form certifying: 1. that the person(s) or entity identified as the property owner on the Notice owned the property at the time the Notice was recorded or registered; and 2. record-interest holders were notified of the proposed Notice in accordance with MCP 40.1074(1)(e). The regulation calls for the 40.1074(f) statement to be submitted on a form prescribed by the DEP, but DEP to date has not developed a form.

D. Signatory Authority

The October 1999 MCP revisions added a new provision set forth n MCP 40.1074(4)(c):

“if a person(s) signing the Notice of Activity and Use Limitation is not an individual signing on his/her own behalf, but rather on behalf of an entity (LLC, LLP, limited partnership, etc.), or as trustee, executor or attorney in fact, documentation of the persons(s)’ [sic] signatory authority as described in 310 CMR 40.1071(2)(c), [shall be] attached as an Exhibit to the Notice of Activity and Use Limitation.”

The addition of this provision reflected the discovery in AUL audits of many Notices of Activity and Use Limitations that had been improperly executed by persons acting in representative capacities, which was likely an elusive concept for many persons preparing and submitting AULs without consulting a lawyer. The new section’s express language highlighting the importance and significance of authorized signatories no doubt will eliminate any slack DEP auditors had been cutting parties around the issue of appropriate execution of AULs. Of course, execution of an AUL by an unauthorized person or by less than all necessary signatories raises questions about the effectiveness of the terms of the AUL itself, and may cast doubt upon whether or not one could violate such an AUL’s terms. Absent an effective AUL, the Response Action Outcome dependent upon the AUL would not pass muster on risk assessment grounds, unless the AUL was voluntarily employed solely for general notice or other similar purposes.

E. Submittals to DEP

To eliminate confusion about what documents are to be submitted to DEP in connection with use of a Notice of Activity and Use Limitation, the October 1999 revisions set forth an itemized listing in a new MCP 40.1074(4):

“(4) Filing with the Department: Within 30 days of recording and/or registering any Notice of Activity and Use Limitation, the property owner shall submit the following to the Department:

(a) a certified Registry copy of the Notice bearing the book and page/instrument number and/or document number;

(b) a Registry copy of the required survey plan(s) referenced in the Notice, bearing plan book/plan number(s);

(c) if the property subject to the Activity and Use Limitation is unregistered land, registry copy of the deed into the owner of the property, bearing the marginal reference required by 310 CMR 40.1074(3).”

MCP 40.1074(3) provides that “the property owner shall record and/or register any Notice of Activity and Use Limitation in the appropriate Registry of Deeds and/or Land Registration Office. If the property subject to the Notice of Activity and Use Limitation is unregistered land, such Notice of Activity and Use Limitation shall be marginally referenced on the deed into the owner of the subject property.” In sum, DEP now requires submittal of documents confirming the effective attachment of the Notice of Activity and Use Limitation into the chain of title of the affected property. While burdening the AUL process as a matter of submittals to DEP, the documentation required consists of those documents a prudent real estate practitioner would probably want to have in her file to evidence the completion of recording or registering a new interest in real estate. Necessarily, compliance with DEP deadlines requires completion of some tasks at the registry or land registration office that may be beyond the control of those submitting the AUL, and it is good practice to alert DEP in writing about any delays anticipated due to the inability to obtain documents in the regulatorily required format.

VII. WHEN AND WHY THINGS FALL APART

The practitioner ought to be able to expect that a capable LSP will have raised the prospect of implementing an AUL to achieve a temporary or permanent solution Response Action Outcome as early in the MCP process as facts become available to suggest that an AUL is a viable alternative to or a necessary element to be used in conjunction with other cleanup strategies. Some clients may reject an AUL out of hand as inconsistent with a desire to get rid of an environmental problem once and for all through proactive remediation (and irrespective of liabilities that can accompany the dispatch of remediation waste for off site treatment or disposal). Others may react negatively to the certainty of targeted audit that now attends AUL implementation. Some cynical observers might suggest there have been circumstances where consultants have encouraged cleanups over AUL implementation because of the greater rewards cleanup consultants and contractors may reap from excavation, system installation and operation or other remedy. Where an AUL is an option worth considering, an LSP should inform a client about it.

A. AULs are not Remedial Actions

Undoubtedly, a party seeking to recover Response Costs against a party identified in Chapter 21E, §5(a)(1)-(5) would want to include the costs, fees and expenses incurred for preparing and implementing an Activity and Use Limitation. After all, where an AUL has been employed, it is likely the Response Costs plaintiff has relieved the targeted defendant of exposure to much greater costs for a proactive cleanup. While AUL expenses may be viewed as Response Costs for purposes of implementing a remedy to achieve a Response Action Outcome, MCP 40.1046 (4) expressly states that AUL filing, recording or registration shall not be deemed to be a remedial action “[f]or the purposes of 310 CMR 40.1000 only…”

To the casual MCP reader, this provision may seem incongruous. However, the exclusion of AUL implementation from remedial actions is necessary to take advantage of the quirk in Chapter 21E and the MCP about when one must analyze the feasibility of achieving background, a sometimes burdensome and not inexpensive process. Chapter 21E, §3A(g), requires that permanent solutions include measures designed to reduce the levels of contaminants at a site, where feasible, to levels that would exist in the absence of the site of concern—that is, background levels. By excluding AUL implementation from the scope of remedial action, the MCP relieves parties employing AULs from the obligation to study the feasibility of achieving background conditions, provided no other remedial actions have been performed at the site.

The importance of evaluating the AUL alternative early in the MCP process is highlighted by this provision. If a remedial action is performed, say, removal of a small amount of soil or pilot application of an oxidizing compound, a party may later be precluded from the alternative of using an AUL if analysis indicates that background levels can be approached or achieved feasibly through continued remedial actions. DEP’s July 1997 Public Comment Draft “Guidance on Evaluating the Feasibility of Approaching or Achieving Background” offered some insight into DEP’s views and questions at that time, but the scope and parameters of feasibility analysis can be said to remain, at best, rather vaguely defined currently.

For the practitioner, the important point to remember is that undertaking even minor remedial action at a site may compel subsequent performance of feasibility analysis and result in lost opportunity to avoid cleanup to background levels through AUL implementation. The practical implications can be seen at sites where tank removal contractors, intending to be helpful, might excavate and remove a small amount of soil, and thereby commit a party to an extensive cleanup that might otherwise have been avoided.

B. Time Crunch

Even before the October 1999 MCP amendments added forty-five day advance notification to the list of Notice of Activity and Use Limitation requirements, AUL preparation and submittal seemed to occur regularly in a pressure cooker of too tight deadlines and unreasonable turnaround times for completion of supporting documentation. The atmosphere shared by the client and participating professionals was not enhanced by the fact that AULs ordinarily arise at the end of the MCP process. With the end in sight, clients who have suffered what they perceive as the indignity of compulsory participation in an expensive, time consuming and paper work compounding process based on an unfair liability scheme are quite understandably less than patient about unanticipated delays or other problems. Frequently, the AUL implementation process is a lawyer’s first active involvement in the client’s disposal site problem. Legal counsel’s entirely appropriate efforts to protect a client’s interests through careful attention to the language of the AUL (revisions to which need to be coordinated with the LSP’s AUL opinion) as an instrument affecting real estate value may encounter a “don’t bother me, just get it done” response from the frustrated client.

The DEP fee system can contribute substantially to AUL time pressures. If submittal of a Response Action Outcome is held up beyond an MCP anniversary date due to problems completing an AUL, the opportunity to avoid Response Action Outcome filing fees may be lost, Phase I submittal and tier classification may become due, or an additional year’s compliance fee may be incurred. Clients can find themselves nicked with yet more expense just when they thought the financial bleeding was about to stop.

The practitioner should be most wary about promising to undertake completion of an AUL within a confined period of time. Certainly, the status of record title, the quality and completeness of record plans and the competence and capability of the LSP involved are all significant factors to consider when trying to anticipate the time necessary to prepare an AUL for execution, recording or registration, and submittal to DEP, including accomplishing the follow up submittals now called for in MCP 40.1074(3) and (4). If there is a question about meeting deadlines occasioned by anniversary dates, legal counsel must be sure that the client understands the risk that the AUL will not be completed seasonably and the nature of the consequences if an anniversary date deadline is not met.

DEP has indicated that post October 1999 AUL submissions will not get the benefit of the doubt during audit review. Concise DEP audit results, especially combined with the updated AUL Guidance when issued, should help streamline the AUL process by establishing well understood and consistent standards for the AUL documentation to be prepared by non-lawyer professionals that need to be involved in AUL implementation. Still, it is doubtful that the time pressures occasioned by approaching deadlines will evanesce, and clients will almost certainly continue to find any AUL caused delay to completion of the MCP process an MCP end game exasperation.

DEP personnel advise that the forty-five day advance notification to record interest-holders can be waived if evidenced by a writing signed by the interest-holder agreeing to the AUL. This may accelerate AUL implementation in some circumstances, especially where record interest-holders are friendly to the transaction. However, mortgagees, tenants with recorded leases, and other record interest-holders may have no particular motivation to cooperate. Similarly, utilities may have easements recorded within AUL areas, and promptly locating an authorized utility representative willing to sign off on a waiver of notice concerning a matter that may have health and safety implications for utility employees or contractors could well prove to be a challenging, if not impossible, task.

C. AUL Expense

Client comfort about perceived reasonableness of fees promotes good client relations, and the experienced lawyer knows that good practice includes advance preparation of clients for what they should expect to pay for a particular service. AULs have proved to be something of an anathema in this regard, and the problems of projecting the time and effort involved in AUL implementation have arisen in situations where clients are not only flustered with the time pressures discussed above, but also with the charges they have been paying for LSP and other services and deliverables in the site assessment leading up to the decision to employ an AUL. The unpredictability inherent in subsurface investigation makes it likely that a client has suffered at least one episode of “sticker shock” during site evaluation. The practitioner should approach calculating and communicating fee estimates to clients for AUL implementation with this reality in mind.

The 1999 DEP AUL in Appendix B does a good job of presenting an overview of what documentation is necessary for a Notice of Activity and Use Limitation, though the items discussed in Section VI., above, need to be added to the listing. See also Appendix A, Table of Requirements for AUL Submittals, and Appendix C, Step by Step through Form 1075 (but remember to use the October 1999 version of Form 1075). Based on this overview, legal counsel can gain some sense of the tasks to be performed, most of which can be handled by paraprofessionals. Probably most important to anticipating the complexity of actually accomplishing the steps required is an understanding of the status of record title and what use can be made of plans already recorded or prepared. One should alert the client to the necessary components of the AUL that cannot be prepared by counsel and make sure there is a clear shared understanding about each task to be performed and who is accountable for ensuring the task is timely accomplished.

Anecdotal accounts indicate that AUL preparation has proved to be quite the loss leader for a number of lawyers, with limited opportunity to make up for the loss with a subsequent volume of AUL cases. To keep AULs within manageable bounds, the practitioner must separate and delegate all suitable tasks to paralegals and attempt to focus legal analysis on AUL restrictions on real estate and on the obligations identified in the AUL as necessary steps to maintain acceptable risk conditions. Experience teaches that the contents of documents and counsel’s admonitions can be quickly forgotten once an AUL and Response Action Outcome are submitted to DEP. As permanent prohibitions on full enjoyment of real estate that can only be altered through MCP sanctioned steps, AULs necessarily present the same challenges in drafting as any document intended to control conduct indefinitely into the future. It is critical that clients understand what property rights are being affected by an AUL. By focusing attention on AUL substantive language, client communication, appropriate AUL execution and final review of AUL documentation for completeness, the practitioner may be able to keep legal fees for AUL implementation with bounds acceptable to clients.

D. AULs on the Real Estate of Others

A disposal site is defined by the horizontal and vertical extent of contamination, and releases of oil and hazardous materials are no respecters of property boundaries. There is not much in the way of public information about negotiation of agreements allowing a party to accomplish a Response Action Outcome for a disposal site by extending an AUL area from the party’s property onto the property of another. Plainly, multiple issues are implicated. In some circumstances, a friendly neighbor eager to accommodate a responsible party may be willing to agree to the imposition of an AUL on title without charge. In other cases, an adjacent owner may consider the value of an AUL that spares a responsible party substantial cleanup costs to be some percentage of the cleanup savings realized. Chapter 21E, §6, authorizes DEP to “cause, allow or require the owner of the property” that is or was a site or vessel to record notice of the restrictions on the use of such property that DEP determines necessary to carry out the purposes of Chapter 21E. Notwithstanding this authority, it is unlikely DEP will force a neighbor of a source site to record an AUL any time soon (if ever) in anything other than an extreme case presenting dire health, safety or environmental risks, especially given the constitutional takings issues attendant to such a step.

Adjacent property where one might want to impose an AUL will have already been part of site investigation to define the extent of contamination (or levels of contamination on such property will have been inferred from assessment on another property further downgradient). Initial requests for site access to perform assessment work is likely not the appropriate occasion to raise the prospect of a neighbor granting permission to record an AUL, but any realistic chance of accomplishing a Response Action Outcome dependent on an AUL on property of another person will almost certainly involve an extended period of negotiation. It is unlikely that arguments about the burdens of background feasibility analysis will sway a neighbor if only a limited amount of contamination is on the neighbor’s property. Instead, a neighbor would more likely maintain that the responsible party should cleanup the contamination beyond the responsible party’s boundaries, and then implement an AUL on the owned source property.

E. Avoiding AUL violations

When initially promulgated, the 1993 version of the MCP kept within the loop of persons responsible for MCP violations a former owner who had imposed an AUL on real estate and then sold it to another even if the violation of an AUL term or condition occurred after the AUL filer had any ongoing connection to the property. MCP 40.0020(2), by referencing DEP discretion factors described in MCP 40.0019(2), has relaxed tensions about the exposure of AUL filers for violations committed by subsequent owners or operators of properties subject to AULs. For the practitioner, however, the problem may be rather more basic than the attenuated liability thread to the former owner of an AUL controlled property. Specifically, legal counsel should consider what means are available to ensure current owners and operators of real estate subject to an AUL remember that an AUL is in place and abide by its terms.

The question is particularly germane in the institutional setting, where there may be a wide gap between management familiarity with legal documents and staff needs to accomplish particular tasks. The problem of violating AUL terms is especially significant during the period of time before target audit of an AUL occurs, since DEP personnel may arrive for site inspection as part of the audit process and discover violations of an AUL—conditions likely to affect auditors’ views about the sufficiency of a Response Action Outcome and the finality of the AUL supported wrap up of the disposal site’s involvement in the MCP process.

Effective AUL implementation must include effective communication of the limits an AUL imposes on what can and cannot be done in the AUL area. A memorandum to senior management is, of course, appropriate to remind responsible individuals that the AUL must be incorporated in full or by reference in any deed, mortgage, lease, or other instrument of transfer conveying an interest in the property subject to the AUL, and recommending that the appropriate facilities personnel be advised of and reminded on a regular basis about the terms and conditions of the AUL. If a client’s operations include a health and safety plan for the facility where the AUL is in effect, it makes sense to include the AUL in such plan.

Murphy’s law being what it is, however, reliance on file copies and intra-organization communications is likely to prove less than entirely effective. While well counseled clients will seek to avoid including detailed requirements within an AUL itself—if only to keep from increasing the odds of a subsequent AUL violation—clients may use placards or other signage right at the AUL location to advise persons in the vicinity of the existence of the AUL and where or from whom a copy may be obtained. In situations where the scope and extent of an AUL is anticipated to be changed or where work requiring LSP oversight under the terms of the AUL is likely to occur, counsel should advise clients to maintain such contacts with the LSP of record for the site as will facilitate prompt client service when LSP services are needed.

While it is a dicey proposition to predict with any certainty DEP enforcement priorities under the MCP, one can logically infer that a high profile case with a stiff sanction involving violation of AUL terms and conditions would serve as a powerful message to the regulated community that the advantages that come with using AULs are accompanied by responsibilities that DEP takes very seriously. Given the apparent discomfort of some sectors with the notion of institutional controls as a risk reducing mechanism—as reflected in the Brownfields Act’s audit requirement and tax credit limitation—DEP scrutiny of AUL implementation as practiced in the field over time should be expected by clients owning or operating properties subject to AULs.

VIII. CONCLUSION

AULs are a critically important component of the MCP’s implementation of Chapter 21E’s risk based system for identifying, assessing and cleaning up disposal sites in Massachusetts. While the practice of leaving contamination in place while eliminating risk through control of future conduct has less than universal support as appropriate public policy, Chapter 21E and the MCP have since 1993 afforded responsible parties the means to avoid very substantial cleanup costs in certain circumstances by using AULs to accomplish temporary or permanent solution Response Action Outcomes. Confusion and misunderstandings about how to prepare, record or register and submit AULs affected the quality and consistency of AULs during the 1990s, and DEP auditors report that AUL drafting and procedural compliance problems continue to be discovered in connection with the mandatory targeted audits of AULs called for in the Brownfields Act. DEP’s May 1999 Guidance on Implementing AULs needs to be updated to incorporate the October 1999 changes to the MCP, and such update is anticipated during 2001. The AUL Guidance, together with DEP sponsored training and publicly available DEP commentary such as “Helpful Hints,” offer the regulated community the detailed instructions and information necessary to prepare and submit effective AULs to DEP to support Response Action Outcomes at disposal sites. Practical problems remain for the practitioner, ranging from meeting client scheduling and fee expectations to advising clients how to ensure AUL requirements are met on a consistent and continuing basis. Clients should expect more strident DEP auditing of AULs submitted after October 1999 and aggressive DEP enforcement actions for violations of AULs.

The author thanks the many DEP personnel who provided background information helpful in the preparation of this article, and especially Loretta Howes, Esquire, of the Western Regional Office for advice and information regarding particular AUL compliance problems related to the October 1999 MCP revisions.

Chris Myhrum is Chairman of the firm’s Environmental Law Practice Group. He can be contacted at 413-272-6281 or by e-mail at cmyhrum@bulkley.com