Rhode Island Property Law

Rhode Island Property Law

Commentaries on Real Estate and Environmental Law

Zoning the Oceans

Posted in Coastal Permitting, Coastal Resources Management Council, Environmental Permitting, Environmental Regulation, Marine Spatial Planning, Ocean Regulation, Ocean Zoning, Waterfront Property Rights

I am pleased and proud that the American Bar Association has just published my book, “Zoning the Oceans The Next Big Step in Coastal Zone Management”.

And at approximately 300 pages and 800 footnotes, and two years of work,  I am relieved to have the process behind me!

This book comes to market just as the Obama Administration is initiating its new National Ocean Policy, and coastal states are considering ways to strengthen coastal programs.

Zoning the oceans is a new and emerging area of law, and this is the first book to focus on the legal aspects of ocean zoning.

Importantly, it alerts coastal states, including states bordering on the Great Lakes, how existing provisions of laws and regulations can be used creatively to provide states with significant environmental protection as well as with significant economic development benefits.

More specifically, already existing provisions of the Coastal Zone Management Act and its extensive regulations can be exploited by states to protect their coastal environments and to foster very specific end results, such as increasing offshore alternative energy development.

Ocean zoning is in many ways similar to land based zoning, with which we are all familiar. In land based zoning, designated areas may be restricted to certain uses, such as industrial, commercial or residential, and these restrictions may, and usually do, come with numerous qualifications. The density, area, specific type of uses, even designs, setbacks, height, location and other components of facilities are often regulated. Land based zoning may also have floating zone or overlay districts, as well as provisions for special exceptions or variances to allow certain types of uses in certain areas only upon meeting certain qualifications.

Similar requirements can be established for coastal regions. That process usually starts with something called “marine spatial planning”, which sounds arcane but really means nothing more than gathering detailed information about the ecosystems in the study area, the uses that now occur in the study area, and making recommendations based on the ecology and ecosystems and current and proposed uses.

But this is far more difficult than it sounds, given we are dealing with coastal areas and open oceans, and with uses, not to mention fish and marine life, which may move through various areas at different times of the year. Often the study efforts can be extensive, expensive, and time consuming.

Additionally, the uses of the study area can at times be conflicting, which may pit interest groups against interest groups, for example, fishermen against offshore energy developers or environmentalists against oil and gas extraction industries.

Once the marine spatial planning efforts are done, the end result can be just a plan, a plan describing current conditions and uses, identifying conflicting uses or perceived harmful uses, and leaving it at that—presentation of an informed plan.

But today marine spatial planning, rightly or wrongly, is more often equated with ocean zoning, meaning the information gathered is utilized to inform and implement a regulatory structure of some sort.

That structure could look like requirements that limit or restrict certain types of uses in environmentally sensitive areas, perhaps encourage certain uses to locate in specified areas to avoid user conflicts, and perhaps designate areas which may be used for desired ends, such as offshore wind energy production.

That is precisely what happened in Rhode Island, which implemented the first federally-approved ocean zoning plan, known as the Ocean Special Area Management Plan, or Ocean SAMP. Its primary purpose was to foster offshore alternative energy development, in this case wind energy.

The Ocean SAMP designated certain areas as protected areas based on ecological and other considerations, and it sought to limit user conflicts, as for example ensuring that wind energy development would not interfere with fishing interests. An important part of the two year process involved a large stakeholders group which met regularly to be informed of the process as it was developing and to have input into the regulatory product. An indication of its success is that the fishery interests entered the process skeptical, if not opposed, and came out supportive of the Ocean SAMP.

Importantly, the Ocean SAMP study area included not just Rhode Island state waters but federal waters as well. Of course, Rhode Island could enact enforceable regulations only in its state waters. However, after the study was complete, Rhode Island utilized a special procedure under the Coastal Zone Management Act to seek to have many activities proposed in federal waters to be consistent with the enforceable policies of Rhode Island’s coastal zone management plan in order for federal permits allowing those activities to issue. Rhode Island used data gathered in the Ocean SAMP marine spatial planning process to support this successful effort.

The net result is the Rhode Island experience shows how states can use marine spatial planning and ocean zoning efforts to extend their influence over federal waters as well as the waters of other states. It is possible to design state coastal programs which will effectively provide veto authority over the issuance of federal permits to private parties seeking to conduct certain activities in federal waters or the waters of other states, if those activities are inconsistent with a state’s enforceable policies of its own coastal management program.

This is one of the key benefits of carefully and strategically using marine spatial planning and ocean zoning initiatives, and it is all fully explained and discussed in my book.

In addition, the book provides an overview and introduction to coastal zone management, including its history from colonial to modern times, a detailed discussion of coastal regulation under the Coastal Zone Management Act, and the new era of coastal zone management, involving ocean zoning efforts at the state level, as well as recent federal initiatives for a National Ocean Policy.

And there is a detailed discussion of Rhode Island’s Ocean Zoning Program, as many states, and some foreign countries, are looking at this as a possible blueprint for their own ocean zoning efforts. The book describes what Rhode Island did and how it did it, for the benefit of states which may be considering similar programs. The complete Rhode Island Ocean Special Area Management Plan Regulations are also included in the book as a CD in a pocket part.

Given the book is approximately 300 pages, these few hundred words can only summarize the material there, which incidentally also includes discussions of marine spatial planning and ocean zoning in other states as well as in Europe, which is well ahead of efforts in America, given Europe’s long interest in fostering alternative energy development both inland and offshore.

To those of you who have an interest in coastal zone management, I hope you will consider the book. Below I have attached a link to the American Bar Association Book Store where it is available.

And to those of you who suspect that book is why I have not been blogging as regularly as in the past, please go to the head of the class!

ABA Bookstore

When Buying Real Estate in Rhode Island, Absolutely Beware of Wetlands

Posted in Environmental Due Diligence, Environmental Permitting, Environmental Protection Agency, Environmental Regulation, Property Rights, Real Estate Due Diligence, Wetlands

Many property owners can innocently violate wetlands laws without even knowing they are doing it, and the penalties for doing so can be more than the cost of the property involved, far more than the cost of the property.   And this is not just the case in Rhode Island; it is true throughout the country.          

Consider this recent case from Idaho, which went all the way to the United States Supreme Court. Sackett v. Environmental Protection Agency, 132 S. Ct. 1367(2012).                                                                               

The Sackett’s Saga

Michael and Chantell Sackett bought a house lot near Priest Lake, Utah, intending to build their family home. In doing so, they did due diligence inspections to ensure the lot was buildable. They saw no red flags.

What they did not do was engage a wetlands biologist to examine the lot to determine if it was a wetland. Perhaps it never occurred to them, as the lot was dry. Yes, dry, as in no visible water.

The Sacketts applied for and received local permits and began their building process by bringing in dirt and stone to level the lot and prepare it for construction. That was when they received a Compliance Order from the Environmental Protection Agency, in essence telling them they had just “filled”  “waters of the United States”. The EPA ordered them to cease construction activity, to remove the dirt and fill material, to plant vegetation, and to monitor the property for three years, during which the property could not be used. Of course, by implication there were being forbidden to ever build a house on the land they purchased for the purpose of building a house, in a neighborhood with other houses .

And the order had teeth. The Sacketts could be subject to substantial fines as well as possible jail time for failure to comply. For example, fines of $37,500 per day of violation of the Clean Water Act were possible, and these could be doubled to $75,000 per day for failure to comply with the Compliance Order. One month’s fines, at just $25,000 per day would be $750,000 and a year’s fines at that level would be $9,000,000.

Unfortunately for the Sacketts, wetlands are determined on the basis of a number of factors, including subsurface hydrology and vegetation, and what looks dry may actually be wetlands. In fact, wetlands may be characterized by certain types of vegetation, and by subsurface water near the surface for only a couple of weeks of the growing season, and not visible on the surface.

Identifying a swamp is easy, but identifying a “dry” wetland takes professional help. I am told by an old environmental hand, Dave Westcott, of Mason & Associates in North Scituate, Rhode Island, that young biologists are sometimes  taught a rhyme to help them determine what is wetlands vegetation:

Sedges have edges
and rushes are round
and grasses have joints
where they grow from the ground.

When the Sacketts tried to convince the EPA that in fact their land was not a wetland, the EPA wasn’t particularly interested. From its perspective, its Compliance Order was in effect, and the Sacketts had no ability to even question EPA jurisdiction.

Now, how many average property owners could effectively cope with this, and defend themselves against the overwhelming weight of the United States Government?   Not many, of course.

“The EPA used bullying and threats of terrifying fines, and has made our life hell for the past five years”, Sackett was quoted in the Los Angeles Times as saying. Well, that is not exactly a glowing citizen tribute of a federal agency. 

Fortunately for the Sacketts, their case was handled "pro bono” by the Pacific Legal Foundation, which took the matter to Federal District Court, where they lost, to the Ninth Circuit Court of Appeals, where they lost, and to the United States Supreme Court, where they won (9-0).

That was not a victory on the merits, however. It was simply, but importantly, a victory which allowed the Sacketts to question in a court of law the jurisdiction of the EPA to regulate their land—in this case for the Sacketts to argue, inter alia, that their land was not in fact “wetlands” and therefore not “waters of the United States”, implicating jurisdiction under the Clean Water Act.

This is important,  because the EPA issues between 1,500 and 3,000 Compliance Orders in a year, and now the recipients of those orders have the ability to challenge the EPA’s jurisdiction before being crushed by the weight of the potential fines.

So the Sacketts are back in Court. Thankfully, they are still represented by their pro bono lawyers, the Pacific Legal Foundation.

A Wetlands Story From  Rhode Island

Here is yet another example, this time closer to home, of the disastrous consequences of unknowingly buying property with wetlands.

A couple was interested in purchasing a lot in Little Compton, Rhode Island to build a house. They bought the property only after being assured permits would issue for construction, including a permit from the Department of Environmental Management for installation of an individual sewage disposal system (“ISDS”). They bought the lot and installed a foundation and part of the ISDS system pursuant to their local building permit and the permit issued by the Department of Environmental Management.

Incredibly, the Department of Environmental Management then issued them a violation for constructing their foundation and ISDS system in wetlands. Yes, the same Department that issued them the ISDS permit in the first place, allowing them to construct. 

It gets worse; DEM then ordered them to remove the foundation and the rest of their construction, which they eventually did after an unsuccessful court battle. 

Some years later, after they had spent tens of thousands of dollars and over a decade trying unsuccessfully to build on their property, my former firm undertook representation of them and was able to procure permits to develop the property, but this also involved another trip to court. Williams  v. Coastal Resources Management Council, C.A. No. 08-2188 (Super. Ct.)(RI July 30, 2009).

Lessons Learned

What are the lessons of this for those seeking to purchase property?

1) If you intend to do any construction work, even just construction of a new house, or building an additional structure on already developed property, it would be prudent to have a wetlands biologist visit the site before you buy to make sure you are not buying wetlands, or if you are, that you can nevertheless proceed with your construction plans.

2) Do not assume that because a building official will issue a permit for construction, there are no wetlands on the property. There may well be. Just ask the Sacketts!

3) And do not assume that because the property looks dry, it is not wetlands. It may well be.

Finally, not to be outdone by Mr. Westcott, I submit my own rhyme.                                                 

I Got Those EPA Black and Blues

Off I went to buy some property
To raise my family properly.
All of my money I would use,
For on a house, who could lose?

I looked at land that to my eye
Could only be considered dry,
So I signed on the bottom line
In order to build that house of mine.

That’s when I got a note in the mail
From the EPA, threatening jail.
Stop building on wetlands, they said.
That land’s for critters, not a homestead.

It’s a mistake I said, a teenie weenie,
Why, this land’s dry as a martini.
There is no water to be found,
Not enough for a flea to drown.

You may think so, they replied
But underground water we spied.
That means it’s wet, even if dry,
So pay your fines or you will fry.

It was quite some time ago,
When all the Courts told me “No”!
But the EPA has since become my friend,
Letting me visit my land on the weekend.

Marine Spatial Planning, Ocean Zoning, and the Oceans’ 12 Conference

Posted in Marine Spatial Planning, Ocean Zoning


I recently had the opportunity to address the Oceans’ 12 Conference meeting in Virginia, having been asked to serve on a panel to discuss the new phenomenon of  “ocean zoning”, which I see as the next big step in  coastal zone management.

The panel itself was focusing on “coastal and marine spatial planning”, or MSP, as it is often referred to in shorthand.  MSP is a comprehensive and integrated ecosystem-based spatial planning process, relying on sound science, to gather information and data about conditions of the ocean, the seabed, and the marine life that inhabit the study area.  MSP can also analyze current and anticipated uses of ocean and coastal areas, and in this country, the Great Lakes as well.

The MSP process can identify areas most suitable for specified activities, whether fisheries, mineral extraction, ship transport, etc.  When this information is translated into a regulatory framework, which is often referred to as "ocean zoning",  it can reduce user conflicts and environmental impacts and preserve critical habitats and ecosystems while fostering specified uses to meet specific objectives. 

For example, marine spatial planning and ocean zoning has been seen as important to fostering alternative energy development.  Witness Rhode Island’s Ocean Special Area Management Plan, also known as the Ocean SAMP, a new regulatory ocean zoning program which was the first of its kind in the nation approved by federal regulators as part of a state coastal management plan.  Rhode Island’s Ocean SAMP  was in large part designed to foster utility scale offshore wind energy development by using marine spatial planning to identify the areas best suited to such development in a cost-effective manner while protecting sensitive habitat and marine life and avoiding user conflicts.

Massachusetts adopted a similar ocean zoning plan, the Massachusetts Ocean Plan, which received federal approval as part of Massachusetts’ coastal program shortly after Rhode Island.

While Rhode Island and Massachusetts have clearly taken the lead in MSP, other states are not idle, and programs are being pursed in Oregon, Washington and California, for instance.  In fact, Oregon just held a workshop this month on the possible amendment of its “Territorial Sea Plan”  in order to “create guidelines for the siting of marine renewable energy development projects” within the three nautical miles off Oregon’s coast covered by the Territorial Sea Plan. This amendment would effectively integrate marine spatial planning into Oregon’s Territorial Sea Plan.

While Rhode Island and Massachusetts can be proud of their pioneering efforts, soon to be joined by other states, the fact is that Europe is far ahead of the United States in pursuing marine spatial planning.

That was driven home at the Oceans’ 12 Conference when two members of our panel, a British Captain in the Royal Navy, and an English consultant widely experienced in MSP, described the programs completed in the United Kingdom and elsewhere in Europe.  These programs are so advanced that in a recent English MSP regimen, inland infrastructure, such as bus terminals and other inland transportation facilities, were directly involved in the planning for use of offshore and coastal waters.

While MSP does not have to lead to a regulatory structure, such as ocean zoning, that certainly appears to be the trend, as the planning information gathered in the MSP process is often used to inform decisions as to what uses to allow, where to allow those uses and subject to what conditions, and what uses to foster, limit, or restrict. 

The potential regulatory effect of marine spatial planning can, of course, give rise to controversy, as it has in this country with President Obama’s recently proposed National Ocean Policy, which has as one of its central elements coastal and marine spatial planning.

A U.S. House of Representatives Committee has held hearings and expressed serious concerns about the potential of “ocean zoning” arising from the MSP process, although Administration officials argue that the National Ocean Policy  will have no direct regulatory effect. 

That is a dispute that will likely play out over the coming years, given President Obama’s reelection.

What there can be no dispute about is that  marine spatial planning has a life of its own at the state level, and it is likely that other states will join Rhode Island, Massachusetts and soon Oregon with ocean zoning plans of their own.



Land Use Tax Policy — How Unfair is Fair?

Posted in Land Use Regulation, Real Estate Law

“This is a case of fundamental unfairness masquerading as rational tax policy”

“This is a case which plumbs the depths of how unfair a government can be to taxpayers and still be constitutional”.

That’s how I introduced to a regional conference of land use planners my discussion of a recent decision of the United States Supreme Court.

I was speaking in Hartford to a full house of land use planners, both those in the public sector and those in the private sector, with a panel of distinguished real estate, land use and environmental attorneys from throughout Southern New England. While we discussed many recent court decisions, including eminent domain (i.e. takings) cases, equal protection cases and First Amendment cases, this one was my pick for the best of the worst. Armour v. Indianapolis, 132 S.Ct. 2073 (2012).

The case arose out of payments required to be made by property owners to connect to a municipal sewer system. The City of Indianapolis had for years funded sewer projects by assessing property owners equally per lot, and allowing them to pay the full amount upfront, or finance it over a number of years with interest.

This system was applied to a 180 unit subdivision, where 38 paid the total assessment of $9,278 in advance  and the remainder paid in installments of 10, 20 or 30 years.

However, one year later this financing scheme was abandoned and the City decided that all those opting to pay in installments would be forgiven their unmade future installments, but those who paid the entire fee in advance  would not be given a refund, even a prorated refund.

The homeowners who paid in advance asked for a partial refund, in an amount equal to the smallest forgiven installment debt (i.e. $8,062). The City refused the request for refunds.

Homeowners who paid in advance sued, saying they were denied equal protection of the law. In essence, they argued that they were treated differently and unfairly from all those other lot owners who opted to pay in installments.

The state trial and appellate court found for the homeowners, but the Indiana Supreme Court found for the City, saying the City’s decision was rationally related to its legitimate interests in reducing its administrative costs.

The United States Supreme Court reviewed this as a traditional equal protection case. Since there was no suspect classification and no fundamental right at issue, a city’s distinction among taxpayers does not violate the Equal Protection Clause if there is a rational basis for the distinction–if there is any reasonably conceivable state of facts that could provide a rational basis for the classification.

And the Court found it, in a 6 to 3 majority decision.

And what is that rational reason for the difference in treatment?  It is avoiding an administrative burden.  And what is that burden?  Well, for goodness sakes, don’t be so insensitive; the city would have to determine who is owed what and figure out how to refund the money.

Given there were only 38 homeowners involved, one might think a municipality as sophisticated as Indianapolis would somehow be able to meet that crushing administrative burden.

The Court did not appear troubled by the disparity, where some homeowners paid $9,278 for their sewer connections and many other paid far less, some as little $309, or about 30 times less.

At oral argument it was clear that some of the Justices were concerned that this could result in taxpayer claims for refunds under all sorts of public works or amnesty programs.

The dissent clearly appears to have the better of the argument.

First, it noted that the statutory scheme at issue expressly required that the sewer costs are to be “primarily apportioned equally among all abutting lands or lots”. Thirty to one is far from equal.

Secondly, the dissent noted that in 1989 the Court had struck down a local property tax assessment scheme which determined the valuation of homes for tax purposes based on their date of sale, with the result that some homes which sold recently were taxed far more than comparable homes that may have been last sold 20 years before, given the inflation in housing prices over the ensuing decades.

And the dissent noted that the majority’s argument that this is very similar to an amnesty program missed the point, since amnesty programs are directed toward enticing those who may never pay what they owe to come forward and pay, and is not justified by administrative convenience.

As the dissent observed: the desire to avoid administrative hassle and fiscal challenges (i.e. repaying money it already spent) does not justify gross disparity in tax treatment, and such gross disparity is irrational, triggering an Equal Protection violation.

Unfortunately, the lesson drawn from this case may be that if it is only money at issue, it may be hard for a government to be found to be so irrational as to be unconstitutional under the Equal Protection Clause. That may be welcome news to governments, but it is decidedly not welcome news to taxpayers.


So When Is An Abandoned Road Abandoned Anyway?

Posted in Real Estate Law

That was the question facing the Rhode Island Supreme Court when neighbors sued to claim title to a former road that clearly had not been used, maintained or repaired by the City of Newport for decades, and was in fact no longer functional as a road.

And it is the question many residents in many Rhode Island cities and towns confront when they seek to use former dedicated streets or roadways which either have never been put into actual use or actual use of which has been dormant for years and years.

The Rhode Island Supreme Court answered this question definitively in a recent decision. Shannon Reagan et al v. The City of Newport et al, No. 2010-428-Appeal (April 17, 2012).

The street at issue was the Washington Street Extension running northerly from the northerly end of Washington Street to the south side of Cypress Street, being approximately 50 feet wide. Established in 1915, it was used as a public highway until the late 1960s, when the construction of the Newport Bridge effectively made it dysfunctional, being a dead end.

Accordingly to neighbors, the street became “an eyesore”, falling into disrepair, littered with trash, overgrown with weeds, marred by potholes, etc. Neighbors also claimed the former street was used for teenage drinking and “sex parties”, although at least one resident refuted that.

Neighbors also asserted that the street had not been maintained by the City since the Newport Bridge was constructed, and plaintiffs stated they took over maintenance responsibilities.

The abutting property owners sought formal abandonment by the City and sought to purchaser the former street, without success. However, the abutting property owners entered into a Memorandum of Understanding (“MOU”) with the City, whereby they were given “non-exclusive access” to the property to maintain and improve it, but were precluded from excluding other members of the public from the street.

The abutters then spent approximately $27,000 improving the street by removing the asphalt, planting grass and installing curbs. When the City Council terminated the MOU, the abutters filed suit, seeking title to the street by virtue of “the city’s de facto abandonment of such property”.

In essence, the abutters were asserting that the town’s evident, obvious, and factual “abandonment” of the former street constituted an effective legal abandonment. Unfortunately, for them, and their $27,000 investment, the trial court and the Supreme Court disagreed.

The Court unequivocally held that the only way to abandon a street was under the statutorily established procedure, requiring formal town council abandonment, posting of “Not a public highway” signs, advertisement in a general circulation newspaper for three weeks, and a formal notice served on abutters. See R.I.Gen. Laws Section 24-6-1(a).

In other words, intent to abandon, nonuse, and “external acts to put that intention into effect” simply are not enough.

So, if you have designs on that “abandoned” roadway in your neighborhood, you may want to abandon them!


Protecting a “Million Dollar Water View” with Restrictive Covenants

Posted in Property Rights, Real Estate Law, Restrictive Covenants, Waterfront Property Rights

While a picture may be worth a thousand words, a Rhode Island ocean view may be worth millions, if not in fact be priceless, if a little-noted Rhode Island Supreme Court decision is any indication.

In Cullen v. Tarini, 15 A. 3d 968(RI 2011), the Rhode Island Supreme Court upheld a plaintiff’s efforts to enforce a restrictive covenant plaintiff placed on property before selling it in order to limit the location, size, and height  of any structure that could be built on the land being sold.

The reason?  The property plaintiff retained and did not sell “is very nearly the highest point on Aquidneck Island” with “a grand vista that looks out to the south and the southeast that has direct ocean views that are spectacular”.  Construction on the property plaintiff was selling had to be limited in order to prevent it from blocking the ocean views of the property plaintiff was retaining.

When the first purchaser found that plaintiff would not modify its restrictions, it sold the lot without constructing a residence.  The new buyer was less reserved.

The new buyer engaged a designer/builder to construct a significant residence, but according to trial testimony did not advise the designer of the restrictive covenants of record limiting construction, such as size and height, and only advised him that the house should be built in a designated area, but that these were “general guidelines only”.

The buyer did have discussions with the plaintiff and even showed him plans for the new residence, but the plaintiff said the plans were insufficient for him to understand that they violated the restrictions and the buyer did not tell the plaintiff that his plans violated the restrictions.  In the words of the Supreme Court,  the defendant buyer “ testified that he knew about at least two of the violations at the time of the October 2007 meeting between the parties, before beginning construction, and that he chose to ‘subtly ‘wait for the plaintiff to discover the violations rather than directly notify the plaintiff of them.”

Construction proceeded pursuant to plans that exceeded the height limitation, square foot limitation, and location limitation of the restrictive covenant.  When plaintiff became aware of the violations, plaintiff sued for an injunction, which was granted.  At that point, the new buyer had spent $1,250,000 on construction of the partially completed residence.

The trial court found for the plaintiff and ordered the offending construction removed.  The Supreme Court upheld that decision, rejecting a number of challenges.

Significantly, the Court found that the in order to enforce restrictive covenants it was not necessary to make a separate finding of irreparable harm to the plaintiff.  Quoting from the Restatement (Third) of Property Law, the court said “[t]he value of a restrictive covenant often is subjective and difficult to evaluate in monetary terms.  For this reason, injunctive relief is an appropriate remedy so long as the purpose for which the restrictive covenant was created continues to exist”. 

The Court also found that it was not necessary to balance the equities between plaintiff and defendant in a restrictive covenant case, as “proof of a violation of a restrictive covenant was sufficient for a court to grant injunctive relief”.

So it was a good day in court for restrictive covenants, not to mention ocean views.

And regarding the cost of that ocean view, in addition to the $1,250,000 the buyer spent on partial construction of its residence, some of which had to be redone and removed, the buyer was also ordered to pay plaintiff’s legal fees and other expenses in enforcing its rights under its restrictive covenants.

So by all means, use restrictive covenants when appropriate to protect water view property or other important view corridors and property interests.  And if you acquire real estate subject to restrictive covenants, for goodness sake, be careful!




Are Property Owners Liable for an Oil Release on Their Property Even if it Occurred Before They Owned the Property?

Posted in CERCLA, Environmental Due Diligence, Environmental Regulation

Rhode Island’s penchant for strict liability for releases of environmental contaminants appears to be getting even stricter.

A recent Superior Court decision just held that a property owner who owned property contaminated prior to its ownership was liable for remediation under the Oil Pollution Control Act, R.I. Gen. Laws 46-12.5-1 et seq. (the  “Act”), since continued leaching of oil beneath the surface constituted a discharge under the Act. Power Test Realty Company Limited Partnership v. Sullivan, 2011 R.I. Super. LEXIS 118.

The Act defines “discharge” as “any spilling, leaking, pumping, pouring, emitting, emptying, releasing, injecting, escaping, leaching, dumping or disposing into the environment”. R.I. Gen. Laws 46-12.5-1(i). All those words seem pretty active, like you have to do something, except that pesky work “leaching”. That was the word relied on by the Department of Environmental Management (DEM) hearing officer in finding the property owner liable for the clean-up, not to mention a hefty $50,000 penalty.

The hearing officer’s decision was upheld by the Superior Court.

But did the General Assembly, in passing the Act, and using all those active-sounding words, like spilling, pumping, pouring, emptying, etc., really mean by including the word “leaching” to turn the Act into a strict liability statute? Under that reading, a property owner is liable for remediation simply by virtue of owning property contaminated by someone else before they owned it.

Of course, we have one of those strict liability statutes in Rhode Island, the Industrial Property Remediation and Reuse Act, R.I. Gen. Laws 23-19.14-1 et seq., which applies strict liability to property contamination, meaning that if you purchase property later found to have been contaminated before your period of ownership, you nevertheless are still obligated to clean it up, with few and narrow exceptions, by virtue of your status as the property owner.

That statute, however, excludes petroleum, based as it is on the federal Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., which also has a petroleum exclusion.

Even the Oil Pollution Control Regulations, written by DEM, do not sound like they are targeting passive activity. Oil Pollution Control Regulation Rule 6(a) provides that “[n]o person shall place oil or pollutants into the waters or land of the State or in a location where they are likely to enter the waters of the State…”.

Conventional wisdom, I believe, was that oil contamination under the Oil Pollution Control Act did not carry with it the same strict liability as would be found under the Industrial Property Remediation and Reuse Act for non-petroleum contaminants.

As of this writing, the order has not issued in this case, so the appeal period has not begun to run and we do not know if this decision is going to be appealed.

But what we do know is that there is enough potential environmental risk in the ownership of real estate that you can’t afford to be too careful in doing due diligence before you buy property.

If you haven’t done so already, you may want to check out the two White Papers available on this website. One focuses on environmental due diligence in Rhode Island and the other addresses a comprehensive checklist for environmental and real estate issues in a real estate purchase transaction.

And let’s keep an eye on whether or not this particular decision is going to be appealed to the Rhode Island Supreme Court.


Rhode Island and Massachusetts Issues on the Siting of Potentially Hazardous Facilities Will Get National Attention

Posted in Coastal Permitting, Coastal Resources Management Council, Development Permitting, Environmental Permitting, Ocean Regulation, Waterfront Property Rights

An American Bar Association Webinar will bring to a national audience Rhode Island’s and Massachusetts’ experience with the proposed development of a LNG facility as part of a discussion of issues facing states in the siting of potentially hazardous facilities in their communities.

Recall the political furor that developed when Weaver’s Cove Energy LLC proposed constructing a LNG (i.e. liquefied natural gas) facility in Fall River, Massachusetts, which would bring LNG  through Rhode Island and Massachusetts coastal waters in ships similar to the one pictured here.

I would be the first to argue that all of that furor was not justified, but by way of disclosure I should also note that I represented Weaver’s Cove Energy in its federal consistency review filing with the Rhode Island Coastal Resources Management Council.

I will moderate the panel discussion and will be joined by veteran litigator Terrence Tierney, Esq., now with the University Of Massachusetts School Of Law and formerly with the Rhode Island Attorney General’s Office, where he was involved in litigation opposing siting of the LNG facility.

Also on the panel is an experienced planner, David Westcott, AICP, the chief planner and environmental scientist with Mason & Associates, Inc. in North Scituate, Rhode Island, who will be discussing the siting of locally unwanted land uses, also known as LULUs.

For my part, I will be discussing how the 34 coastal and Great Lakes states can use the Coastal Zone Management Act’s federal consistency program to protect its communities in the siting of potentially hazardous facilities.

And relying on Rhode Island’s first in the nation ocean zoning program, I will also be discussing how other states can follow Rhode Island’s lead and actually strengthen the protections available under the federal consistency review program.

So all and all Little Rhody is going to have the opportunity to showcase lessons learned here and how this may help other states.

The Webinar airs October 19th at 1:00 pm – 2:30 pm Eastern, 12:00 pm – 1:30 pm Central, 11:00 am – 12:30 pm Mountain, and 10:00 am – 11:30 am Pacific.

Registration information is available here.


Title Problems May Occur Where You Least Expect to Find Them

Posted in Real Estate Due Diligence, Real Estate Title



Recently a  buyer who was purchasing waterfront property in Rhode Island said when we were discussing what due  diligence should be conducted: I am sure the title must be fine; the property has been in the same family for years.

My response: “Well, let’s see; they are often the properties with the most title problems."

And so it turned out.

There were two significant title issues, one of which required an easement from an abutter and another of which required an exchange of corrective deeds between the new purchasers and another abutter.

The second title issue was sufficiently involved that it could not be straightened out until after the closing. The closing only occurred on schedule because we were able to procure affirmative title insurance coverage to provide protection to the buyers and their lender.

Where Title Problems Often Lurk

In additional to infrequently conveyed properties, another warning sign is when abutting properties are held by related family members. That was the case in the waterfront transaction I just mentioned.

It was also the case in another waterfront property situation where the owners wanted to confirm the existence of an easement they expected to be on title. Again, one of the owners said the title should be fine– it had been in the family for several generations and relatives owned abutting property.

Again, I was skeptical, and with good reason. That property, which had not changed hands in years, also had title problems.

And this was the common thread: no sales transfers in years, and family as abutters.

The simple fact is that properties which infrequently change hands are more likely to have title issues than properties with a number of recent sales. Reason: the problems are more likely to be flushed out and resolved in the prior transactions.

The reason that family members as abutters often give rise to title problems is that  “friendly transactions" between these abutting property owners are often not handled with the same scrutiny or diligence that accompanies an arms-length transaction between strangers, or at least unrelated parties.

For example, parents may transfer an easement or certain property to a grown child without using any lawyer or without using an experienced real estate attorney. The legal description may be in error, or the manner or method of grant may be defective. Without experienced eyes looking at it on the other side of the transaction, mistakes may, and often do, slip by.

Waterfront Regulatory Issues and Title Issues

While I am often consulted on waterfront property transactions because of the regulatory issues affecting waterfront property, which is some of the most highly regulated property in Rhode Island, I will also pay particular attention to title issues when I see that the property has been held in one ownership for a protracted period of time, and particularly where I am told family members are abutters or this is a family compound or something similar.

And sometimes the regulatory issues can also become title issues, as where uncured regulatory violations are recorded in the land evidence records.

Identifying and Correcting Title Problems

In such cases, if there are plans to sell or finance the property in the future, I will suggest the owners engage a title attorney or title company to run title and issue a title report. This can provide significant benefit.

First, it allows the owners to determine if their title is problem free, and if not, it lets them know what is wrong and what must be done to cure it.

Secondly it eliminates the danger of losing a future sale because the buyer does not want to wait while the title problem is cleared up, and it eliminates the danger of having a favorable mortgage interest rate lock expire in a financing because the closing is delayed by a title problem.

Title problems can often be fixed. But the hardest to fix are the ones you don’t know you have.


What’s The Buzz in Real Estate and Environmental Law

Posted in Environmental Regulation, Real Estate Law


 Getting the Right Information.

I was recently reminded—more about that later—of questions I have received from younger lawyers about the best way to stay current on developments, legal and business, in real estate and environmental law.

More specifically, is setting Google Alerts on specific topic areas the best way to keep up on new developments.

That question could be directed to other legal practice areas as well, or to other areas of interest, and my answer would be the same.

My answer is yes and no.

Yes, because letting one or more of the many fine reporting services work for you 24/7 on a complementary basis to bring customized and tailored information to you is an excellent idea.

No, because in this information age, the challenge is not to get the most recent information; the challenge is to get the best, most incisive, most trust-worthy information.

So, setting topic alerts will certainly generate a lot of information, but the quality of that information will vary widely, from brilliantly incisive to dangerously inaccurate.

My suggestion is to set alerts but to include in those alerts sources of information. When you find a reliable, thoughtful, thorough, accurate source of information, pursue the source.

Some examples from inside, and outside, real estate and environmental law.

Look for the Experts.

For investment information, one of my alerts is Jim Rogers, the iconic American billionaire investor. I don’t care what it is he is talking about, I want to read it! He is that good! If you heeded his call on commodities several years ago, your biggest problem today would be managing your huge fortune.

He not only thinks outside of the box, he lives outside of the box. He moved his family to Singapore because he is convinced that the future belongs to Asia, and one of the greatest gifts he could give his two young daughters was learning Mandarin. Check him out on Amazon if you are not familiar with his work or check out his blog.

If there is something more confusing that investments for which you may need advice, it may be the health care debate.   Because I had met Joseph Rago a couple years back when we participated in a VIP tour of a military base down south, I would pay attention whenever I saw his byline in the Wall Street Journal or saw him on the Wall Street Journal Editorial Report television program. Yet, I never connected him to the extraordinary editorials in the Wall Street Journal on healthcare. Never, that is, until he was recently awarded the Pulitzer Prize for those editorials!

So if you are interested in health care, one of your alerts should be Joseph Rago, even if that does not turn up his editorials, which are unsigned.

Great Reporting!

Perhaps because I was trained as a journalist, I have a high regard for truly good reporting and writing, which necessarily involves excellent analysis, even if not labeled an analytical piece.

Closer to home, and closer to the subject of this blog, is the fine work of Peter Lord, the veteran environmental reporter for the Providence Journal. Peter has been covering the environment for the Providence Journal for as long as I can remember, and that covers some ground. He has the rare ability to thoroughly understand something complex with a lot of moving parts (which certainly includes environmental law) and explain it not only in an understandable manner but in a highly readable manner.

Great Writing!

Similarly, if I want a highly entertaining but extremely knowledgeable take on land use law, I look for anything my pal Dwight Merriam has written. Dwight is a land use attorney based in Hartford with a national practice, whose numerous books and articles have destroyed more trees than I like to think about, and who routinely speaks throughout the country.

Check out Dwight’s blog here. There is only one improvement I think Dwight could make—posting more frequently!  I’ve threatened to kill him if he doesn’t blog more frequently, but then it occurred to me that would be counterproductive!

And if you need a comprehensive survey of what is going on in land use law across the country, Dean Patty Salkin’s Law of the Land is a must. I have previously referred to her incisive work, see my July 24, 2010 post; and like Dwight’s blog, it has a link on my website.

New Sources.

And as for the reason all of this occurred to me?  I encountered what for me were two new writers who seemed to offer a similar ability to cogently analyze and clearly convey complex material.

The first, an attorney named Ashley Lyon, I found at an unlikely place, the National Cattlemen’s Beef Association, where she is Deputy Environmental Counsel. I was not in fact looking for anything to do with cattle or beef but rather researching the EPA’s response to recent court decisions addressing the limitations on the ability of the EPA to regulate wetlands.

In a recent posting, she tackled the EPA’s response to the complicated issue of what constitutes “waters of the United States” for purposes of regulation of wetlands by the EPA.

In my own view, it seemed the EPA’s answer to that question in the past was effectively “anything wet”.  Ms. Lyon has a similarly critical but much more articulate response to that question, having analyzed the EPA’s recent “Guidance Document” written for the benefit of EPA staff in addressing, and in her view, expanding the EPA’s jurisdiction.

I look forward to reading further analysis from her.

Another source of information I have recently followed and found very useful and reliable is Offshorewind.biz, a blog on the offshore wind industry. It covers the industry worldwide, and of course much of that news is from Europe, where the wind industry is far more developed than in the United States.

And as is often the case, that reliable source of information led me to another new source of information that, like Ms. Lyon, appears to be worth following.

In a recent posting in Offshorewind.biz, Chip Young, a senior editor at Golocalprov.com, did an absolutely excellent piece on the plans of Deepwater Wind to expand its proposed Rhode Island offshore wind farm, and the controversy this created with fishermen. His reporting involved the wind industry, the Rhode Island Ocean Special Area Management Plan, the first marine spatial management plan adopted in this country, and information and facts about the implementation of that plan.

These are all things I know something about, and I could not find a false note or misstep in his report—just good solid reporting and excellent, thorough factual background.

I will be following him.

And that is my suggestion to attorneys who want to keep up on the business and legal changes in real estate and environmental law, or in whatever is their area of focus—follow the reliable sources not necessarily the informational topics.