Jane Warren discusses with the Hartford Business Journal the Connecticut’s Department of Energy and Environmental Protection’s (DEEP) issuance of its final version of new “release-based” cleanup regulations to replace the roughly 40-year-old Transfer Act. The regulations were drafted with an eye toward reducing roadblocks to redevelopment of industrial sites, and to allow property owners to address newly discovered releases rather than requiring environmental review of any sale or transfer of establishments, even ones with no issues.
“It was very expensive to prove the negative, and the idea behind this (regulatory change) is (that) you don’t have to go looking under every stone; you don’t have to go looking for trouble,” Jane says. She noted that under the Transfer Act a a property owner might have to spend approximately $50,000 for a complete environmental review, and on top of that, there was a roughly 50% chance of being audited by the DEEP, adding further cost and delay. Under the new system, property owners will have to clean up releases either as they happen, or as they are discovered. Jane says that lenders and purchasers may still request environmental testing of certain properties, so property owners will need to consult with their attorneys to determine when and whether to investigate, and how to potentially keep that investigation confidential.
The regulations, which require review and approval from the legislature’s Regulation Review Committee and could see some language refinements from that process, are set to take effect March 1, 2026. Jane says properties that sell before the new regulations go into effect will still be subject to a Transfer Act review, meaning there will be a dual system of environmental regulation in place for years while those reviews play out. Consequently, she says, “Transactions right before the effective date are not going to happen because everybody is going to wait ( in order to avoid having to comply with the Transfer Act).”