To: Michael Kerr
From: James Doty
Date: September 26, 2006
Re: Comparison of the Uniform Environmental Covenants Act (“UECA”) and Current Oregon Law.
The Oregon Department of Environmental Quality (ODEQ) uses Easement and Equitable Servitude agreements (EES) as a tool to
institute land use controls following a hazardous site cleanup and to promote the productive use of properties once contaminated by
hazardous substances. Like a UECA covenant, an EES is a real property instrument designed to place a set of institutional controls on a
particular property to prevent future avoidable exposure to and any further release of hazardous substances remaining following a
remediation action at a site. However, as is the case in many states, EES’s rely on the underlying common law of real property and thus are
subject to extinguishment under a wide variety of common law doctrines and real world situations. UECA, by contrast, creates a special
instrument defined in statute which explicitly deals with these problems. Adoption of UECA in Oregon will provide the option of a
stronger, more reliable tool for creating enforceable long-term use restriction on a particular property.
Despite the benefits of the current EES approach, it has some very substantial and important shortcomings. Oregon law does not
address how traditional property law restrictions are affected by the institutional controls. Though it appears to be a statutory goal that these
instruments apply to the property itself in perpetuity, Oregon’s scheme is completely silent as to what happens when an EES contradicts
traditional property law principles. This could occur in many situations, such as when an agreement does not have privity with respect to
subsequent purchasers, is not appurtenant to an interest in real property, has not been recognized traditionally at common law, imposes a
negative burden, or imposes an affirmative obligation on a person having an interest in the real property. Section 5(b) of UECA explicitly
addresses and answers these questions.
The Oregon law also implicitly leaves the question of whether the state’s interest in an agreement site is an interest in real property
for courts to decide. UECA addresses this important question by clearly stating that a state’s interest in an environmental covenant is not
considered an interest in real property. Other vital real property considerations not addressed by Oregon law but covered by UECA include:
whether an interest with priority under other law is affected by the environmental covenant, and whether the foreclosure of a prior interest
extinguishes the latter recorded restriction; what relationship exists between current land use law and the agreement; whether the agreement
can be extinguished by a tax lien, tax deed, or common law doctrines like adverse possession, prescription, abandonment and waiver;
whether the agreement can be extinguished by the state marketable title or dormant mineral interests statutes (both of which operate to
automatically terminate non-possessory interests which are non re-recorded within a certain period of time), and what happens to a recorded
use restriction when a property is the subject of an eminent domain proceeding.
One of the major benefit of UECA are the remedies available to the state should a breach in institutional controls occur. Under
UECA, the ODEQ or another affected party may bring an action for immediate injunctive or other equitable relief if a breach of covenant
occurs. UECA gives the ODEQ immediate recourse if a party begins to contaminate the property in violation of the agreement. This
enforcement authority is supplemental to the agencies existing regulatory authority.
Another important benefit of the UECA paradigm is its uniformity. UECA is a recent NCCUSL project, but as of this writing,
sixteen jurisdictions, including Idaho, have already enacted it; twelve additional states have introduced it for enactment; and sixteen more
states, including Washington, are likely to introduce it in 2007. This will be a boon for Oregon if the state were to uniformly adopt UECA,
as other state’s case law, forms, and experience with the act will be available as an aid in Oregon adjudications and implementation. It will
also benefit other parties to remediations and redevelopment projects, especially those operating in multiple states, by creating a common
instrument and national base of knowledge and experience. The uniformity of UECA’s definitional sections and other important provision
will make the effects of the adoption of an environmental covenant more predictable and therefore more attractive to the state of Oregon and
In sum, the adoption of UECA in Oregon would provide a more reliable means of placing long-term controls on contaminated
properties and would benefit economic development through uniformity and consistency of environmental controls and land usage. The
following chart gives a brief side-by-side comparison of the Oregon law and UECA.
ISSUE UECA STATE LAW
Does the law mandate the No. UECA only creates the means to implement No. The law states that one way in which
institutional controls to be the environmental covenant, it does NOT mandate remedial action may achieve protection of
imposed on the property? the specific institutional controls that are to be human health and the environment is through
contained in that covenant. Of course, institutional the establishment of institutional controls, such
controls will be implemented as part of the as those provided in the EES, but gives no
agreement reached between the agency and the specific mandate. § 465.315(1)(c).
parties to the agreement. Specific institutional
controls may be required by state or federal law,
but UECA only creates the means to implement
such controls, it does not mandate the institutional
controls to be adopted. The state agency has
control over what institutional controls will be
contained in the covenant.
Are there restrictions on the types Very few. UECA allows the use of environmental
of environmental response covenants in a broad range of situations. UECA Yes. In order to enter an agreement for
projects that can use defines an “environmental covenant” as “a remedial action with the ODEQ that results in
environmental covenants? servitude arising under an environmental response the implementation of institutional controls, the
project that imposes activity and use limitations.” ODEQ must believe the agreement will result in
§ 2(4). An “environmental response project” in a substantial public benefit, which includes but
turn is “a plan or work performed for is not limited to:
environmental remediation or real property and (A) The generation of substantial funding or
conducted: other resources facilitating remedial measures
(A) under a federal or state program governing at the facility in accordance with this section;
environmental remediation of real
ISSUE UECA STATE LAW
(B) incident to closure of a solid or hazardous (B) A commitment to perform substantial
waste management unit, if the closure is remedial measures at the facility in accordance
conducted with approval of an agency; or with this section;
(C) under a state voluntary clean-up program
authorized [under state law].” (C) Productive reuse of a vacant or abandoned
§ 2(5). industrial or commercial facility; or
(D) Development of a facility by a
governmental entity or nonprofit organization
to address an important public purpose.
Is the right of a state agency No, except when the agency acts as a holder. § Not addressed.
under the environmental 3(b) specifies that a “right of an agency under the
covenant or instrument an act or under an environmental covenant . . . is not
interest in real property? an interest in real property.”
Can the environmental covenant Yes. An environmental covenant may identify
or instrument be entered by more more than one “holder.” §3(a). Any person,
parties than the agency and the including an agency or unit of government, may be
current owner? a holder. The definition of “person” in UECA is
broad. See § 2(7).
How is an interest with priority Under § 3(d)(1), “an interest that has priority Not addressed.
under other law affected by the under other law is not affected by an
environmental covenant or environmental covenant unless the person that
similar instrument? owns the interest subordinates that interest to the
covenant.” Agreeing to subordinate an interest
“does not by itself impose any affirmative
obligation on the person with respect to the
ISSUE UECA STATE LAW
environmental covenant.” §3(d)(4).
Does the environmental covenant UECA itself does not address clean up liability.
or similar instrument limit Such decisions are left to existing state law. UECA
liability of the private parties does provide that a party who is able to enforce the
affected? covenant is not liable or responsible for
environmental remediation solely based that
ability. § 11(c).
Is the environmental covenant or Yes. Under § 5(b), an environmental covenant is Not addressed.
similar instrument enforceable valid and enforceable even if:
even if it contradicts common law (1) it is not appurtenant to an interest in real
restrictions on real property? property;
(2) it can be or has been assigned to a person
other than the original holder;
(3) it is not of a character that has been
recognized traditionally at common law;
(4) it imposes a negative burden;
(5) it imposes an affirmative obligation on a
person having an interest in the real
property or on the holder;
(6) the benefit or the burden does not touch or
concern real property;
(7) there is no privity of estate or contract;
(8) the holder dies, ceases to exist, resigns, or
is replaced; or
(9) the owner of an interest subject to the
environmental covenant and the holder are
the same person.
An agreement made before UECA is adopted that
contains activity and use limitations is not invalid
or unenforceable because of any of the above
ISSUE UECA STATE LAW
limitations. § 5(c).
What is the relationship between UECA does not authorize a use of real property Not addressed.
existing land use law and the otherwise prohibited by zoning, by other law
environmental covenant or regulating the use of real property, or by a
similar instrument? recorded instrument that has priority over the
environmental covenant. § 6. However, an
environmental covenant MAY prohibit or restrict
real property use that would otherwise be
authorized by zoning or other law. Id.
Is the environmental covenant or Yes. An environmental covenant must be recorded Not in all cases. ODEQ may require the
similar instrument recorded, and in every county where the real property is located. property owner to record an EES that transfers a
if so, how? Holders are treated as grantees for indexing. The property "right" (such as the right to install a
environmental covenant is subject to the state laws drinking water well, or the right to dig on a
governing recording and priority of interests in certain part of the property) to ODEQ, allowing
real estate. § 8(a), (b). it to act as a deed restriction.
UECA also includes an optional provision
establishing a registry for environmental
covenants. § 12.
What is the duration of an Under UECA § 9(a), an environmental covenant is The benefits and burdens of the Easement and
environmental covenant or perpetual, unless: Equitable Servitude run with the land and bind
similar instrument? 1. It is limited by its terms to specific all current and future owners. DEQ also has
duration or terminates when a certain event the perpetual right to enforce the conditions and
occurs; restrictions set forth in the EES.
2. terminated by consent’
3. terminated by foreclosure or an interest
that has priority over the covenant; or
4. it is terminated by an eminent domain
ISSUE UECA STATE LAW
proceeding in certain circumstances.\
Can the state agency unilaterally Yes, but only via a court order under the doctrine
terminate or modify the of changed circumstances after the state agency
environmental covenant or has determined that the intended benefits of the
similar instrument? covenant can no longer be realized. § 9(b).
Can the environmental covenant No, UECA specifically deals with these real-world Not addressed.
or similar instrument be modified problems by stating an environmental covenant
by a tax lien, tax deed, or the cannot be modified by issuance of a tax deed,
common law doctrines like foreclosure of a tax lien, or application of the
adverse possession, prescription, doctrine of adverse possession, prescription,
abandonment and waiver? abandonment, waiver, lack of enforcement, or
acquiescence, or a similar doctrine, unless
otherwise provided in § 9(a) or (b), as described in
the two immediate boxes above.
Can the environmental covenant No. § 9(d). Not addressed.
be modified by the state
marketable title or dormant
mineral interests statutes?
Can the environmental covenant Yes. Under § 10, the amendment or termination of Not addressed.
or similar instrument be the environmental covenant must be signed by:
amended or terminated by the 1. the agency;
consent of the parties? 2. the current fee simple owner unless waived
by the agency;
3. each person who signed the covenant
except in limited circumstances (e.g.
ISSUE UECA STATE LAW
inability to be found, waiver); and
4. the holder, unless the above parties agree
to remove and replace the holder.
Also, if an owner of an interest in the real property
exists, that interest is not affected by amendment
or termination unless that owner consents or has
waived the right to consent. § 10(b).
A holder may not assign the holder’s interest
without consent from the other parties unless
otherwise provided in the environmental covenant,
and the assignment of an environmental covenant
to a new holder is an amendment to the covenant.
§ 10 (c), (d).
A court may also fill the holder’s position. § 10(e).
How is an environmental A party to the covenant, the agency, a person Upon any violation of any condition or
covenant or similar instrument granted power to enforce by the covenant, a person restriction contained in this Easement and
enforced? whose interest in real property or whose collateral Equitable Servitudes, DEQ may enforce this
or liability may be affected by the violation, and Easement and Equitable Servitudes as provided
the unit of local government where the property is in the prospective purchaser agreement or may
located may bring a civil action for injunctive or seek any other available legal or equitable
other equitable relief. § 11(a). remedy to enforce this Easement and Equitable
The agency retains its ability to enforce
institutional controls under an environmental
response project instituted under other law. §