What’s Hidden Under Your Property, and What’s It Going to Cost You to Clean It Up?

In April, one of our client’s received unhappy news: the city council of his local municipality voted to pass along to our client nearly $20,000 in clean-up costs related to old fuel storage tanks on our client’s commercial property that were uncovered during road construction. The tanks had sat undetected for almost eighty years. But, once uncovered, they triggered a host of legal and environmental tests and responses.

While underground storage tanks are used for a variety of purposes, the application that most people can identify with would probably be the gas storage tanks under the corner gas station. Leaking underground storage tanks (commonly called “LUST”) contaminate the soil and groundwater to varying degrees and with varying impact on both people and the environment.

While there have been enormous strides in the technology involved in the design, construction and installation of underground storage tanks, it is estimated that Michigan currently has a backlog of 9,100 releases involving 7,100 LUST sites that are in need of clean up. The average clean-up cost is estimated at $400,000 per site, and nearly half of the sites have no identifiable party responsible to pay those costs. In addition to the environmental and human impact, the clean-up costs to Michigan taxpayers to deal with this problem is currently estimated to be $1.8 billion. As with our friends, business owners might find themselves responsible for clean-up costs on their property, even if the contamination predates their ownership of the property.

On May 1, 2012, in culmination of more than five years of work involving both industry professionals and the Michigan Department of Environmental Quality (MDEQ), a six-bill package of laws went into effect amending Michigan’s
laws on this topic.

These amendments create a more consistent process for investigating and cleaning-up LUST sites with the goal of eliminating these sources of contamination. The amendments make a number of important changes to the current regulatory scheme. Changes include: improved technology and methodology of investigations; revised standards and reporting requirements; new guidelines for how disputes between property owners and the MDEQ will be addressed; and prohibitions on the transfer of real property containing contamination unless the seller/owner provides written notice to the buyer that the property is contaminated.

Dealing with LUSTs can be a real headache. Fortunately, the process has become at least a little more manageable. Complete information concerning the MDEQ’s LUST program can be found at: http://www.michigan.gov/deq/0,1607,7-135-3311_4109_4215—,00.html. If you’re curious, the link includes a database of LUST sites throughout the state.

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