Environmental Covenant
An environmental covenant is a legal instrument recorded on real property and governed by the Uniform Environmental Covenants Act (Idaho Code §55-30). An environmental covenant is commonly used as a component of a risk-based cleanup to control the potential risks posed by residual contamination, protect the integrity of the cleanup action, and ensure continued protection of human health and the environment.
Environmental covenants can only be used on properties that are the subject of an environmental response project under the oversight of DEQ. An environmental covenant is created by a written agreement in which the parties bind themselves, and their successors in interest to the land, specific conditions, and obligations and/or restrictions of land use, also called activity and use limitations. Activity and use limitations run with the land. They are often used to prevent exposure to contaminants by limiting their pathways, such as extraction of ground water, excavation of soil, or the exposure to vapors in a structure. The type of land use may also be restricted to nonresidential uses only. The activity and use limitations may also be written to only apply to specific portions of properties, the restricted areas, and may also be removed if certain conditions specified in the environmental covenant are fulfilled.
DEQ has created an environmental covenant template. When it has been determined that an environmental covenant may be an acceptable part of a cleanup plan, a party should use the standard template as the basis for the environmental covenant and work with DEQ staff to ensure the environmental covenant is complete. To complete an environmental covenant, a legal description, map, and a copy of a current deed identifying the owner of the property are needed. DEQ recommends the property owner consult with an attorney experienced in Idaho environmental law and/or property law for drafting and implementing an environmental covenant. It is imperative that the parties understand the terms of the environmental covenant, including under what conditions it can be removed.
When the proposed environmental covenant is submitted with the legal description, map, and copy of the current deed, to DEQ for review, DEQ will advise the parties whether it is acceptable. If so, DEQ and the parties to the environmental covenant will execute and return the environmental covenant to the property owner for filing with the recorder’s office in the county in which the property is located. Once the environmental covenant is recorded, the property owner should provide a copy of the recorded covenant to DEQ. DEQ maintains an environmental covenant registry of recorded documents.
The terms of the environmental covenant specify certain reporting obligations on the part of the owner. These include notification of the transfer of the property to a new owner and annual compliance reporting. The compliance reporting requires written documentation verifying that the activity and use limitations remain in place and their compliance with the activity and use limitations. This compliance report must be submitted to DEQ on an annual basis.
DEQ has developed a Notice of Annual Compliance Reporting for Environmental Covenant form to assist property owners with this compliance reporting provision. Owners may use this form to satisfy the compliance reporting requirement. This annual report requirement runs from the effective date of the environmental covenant, which is when the environmental covenant is filed with the deed at the county recorder’s office.