Environmental and Regulatory Update Impacting Commercial Real Estate

EPA Designates PFAS as Hazardous Substances

On April 19, 2024, the U.S. Environmental Protection Agency (EPA) designated two per- and polyfluoroalkyl substances (PFAS)—perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS)—as hazardous substances under the Superfund Law. This reclassification marks a pivotal shift from their prior status as emerging contaminants, carrying significant implications for commercial real estate transactions.

Connecticut’s Transition to a Release-Based Remediation Program

Connecticut is undergoing significant changes in its environmental regulations that will affect commercial real estate. The state is transitioning from the Property Transfer Act to a new release-based remediation program. Key details include:

• Legislative Change: In 2020, the Connecticut General Assembly enacted Public Act 20-9, replacing the Property Transfer Act with a release-based cleanup system. This new approach ties remediation requirements to the discovery of contamination rather than property transfers, simplifying the process.
• Key Features:
  • Reporting and Remediation: Both new and historical contaminations must be reported to the Department of Energy and Environmental Protection (DEEP) and remediated under the new rules.
  • Environmental Professionals: The introduction of “permitted environmental professionals” (PEPs) will certify release records, complementing existing “licensed environmental professionals.”
  • Tiered Remediation: Contaminations will be categorized into tiers, each with specific remediation requirements and oversight fees ranging from $500 to $3,000.

Implementation Timeline

The draft regulations are currently under review, with final adoption expected by the end of 2024 and full implementation anticipated in 2025. This transition aims to reduce transaction delays and costs, fostering redevelopment, particularly in post-industrial areas such as Waterbury and Hartford.