How and When to Use a Restrictive Covenant

Sometimes it is not possible to completely remove a contaminant or remediate a site. In these situations, a restrictive covenant might be used to limit the land’s use and minimize or eliminate exposure to the remaining contaminants. The covenant clearly spells out the conditions and acceptable uses of the property, so that future buyers and residents understand the severity of the contamination and the environmental efforts that have been used in the cleanup process. However, it is important to learn how and when to use a restrictive covenant so that you can do so correctly and effectively.

How and When to Use a Restrictive Covenant

Although restrictive covenants are most known for the role they play in real estate (especially homeowner and condominium associations), they are also very valuable in the context of environmental law and land use. After all, they allow developers to productively use contaminated property. Without a covenant, the land would be highly restricted until thorough remediation was possible.

A restrictive covenant may be recommended as part of a remedial or corrective action plan to the applicable state or federal overseeing agency. This agency must approve the use of the covenant as an appropriate means for avoiding risks to future exposure pathways.

COST

If no current risks are presented by the contaminants on a site, a restrictive covenant may be cheaper than remediation. Although restrictive covenants can negatively impact the resale value of a property, it is important to remember that some remediation projects can cost over a million dollars. In the end, a covenant may still be the most cost-effective option.

TYPES

The type of restrictive covenant used will depend on the severity of the remaining contaminant and the site’s condition. Common restrictive covenants include the following:

• No drinking water wells on-site
• Restrictions on where a building can be erected
• Restrictions on future land use prohibiting residential use, day care facilities, schools, or senior centers

HOW 

A consultant can help determine whether a covenant is a good option for your site in order to get to a No Further Action (NFA) status as soon as possible. Although draft templates are available (view an example here), be sure to have an attorney finalize the covenant to look out for your best interests. Your consultant should draft the portion of the covenant that describes the actual restriction(s) to be implemented on the property. In addition, be sure to file the covenant with the property deed to ensure long-term implementation.

A complete and final version of your restrictive covenant must be submitted to the applicable state or federal regulatory agency for approval before you file the covenant with the county.

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Are you looking for a consultant who can help you determine whether or not a restrictive covenant makes sense for your site? If so, check out Environmental Works, Inc. With our many years of experience, we can help you manage all of your site’s environmental issues with confidence. To learn more about our environmental consulting services, please give us a call at 417-890-9500. Or if you need an emergency response, call 877-827-9500 straightaway.