Terradex’s DigClean map focuses on Tacoma, Washington. Spill sites with associated institutional controls (ICs) are blue, and the underlying parcels encumbered by ICs are green. However, when a recent sale or change occurs on a property, the parcel is highlighted in red to flag the change in ownership. Flagging and then alerting the new owner help assure the IC’s integrity.State environmental agencies have the challenging task of managing large portfolios of contaminated sites, including remediated properties with institutional controls (ICs). ICs limit future uses at properties where residual contamination, such as invisible soil or groundwater pollution, remains in place even after a final cleanup has occurred. Proper management and enforcement of ICs protect both the environment and surrounding communities.
State environmental agencies find themselves responsible for assuring IC compliance at hundreds or even thousands of ICs at hundreds of thousands of individually owned properties. A key process for executing an IC compliance strategy involves tracking property ownership changes.
While Terradex DigClean was initially developed as a best practice approach for excavation monitoring, a growing use case for DigClean’s technology is tracking and mapping property transfers at IC sites and sending notices to new property owners about existing property restrictions. This newer DigClean functionality provides an important tool that many state agencies increasingly rely on.
DigClean Provides an Implementation Tool for UECA, Environmental Covenant Compliance
Although various types of ICs exist, the most common type involves the use of environmental covenants at individual properties. The Uniform Environmental Covenant Act (UECA), drafted in 2003, provides the legal framework to ensure that environmental covenants describe property-specific limitations (e.g., excavation limits, water use limits, residential/school limits, etc.), are officially recorded in land records, remain legally valid as property is bought and sold (“run with the land”), and, importantly, grant enforcement rights to the state environmental agency. The benefits of UECA legislation led to its adoption by dozens of states. Even non-UECA states rely on similar legislation or strategies to ensure that environmental covenants and similar ICs run with the land and can be enforced by state environmental agencies.
The legal framework, while important, needs a corresponding state agency-led compliance assurance process. Agencies find it crucial to confirm that new owners remain aware of environmental covenants. Lack of awareness makes failure significantly more likely. Also, property transfers can often lead to land use changes or new construction, which can also put the property use restriction at risk. Finally, as a practical matter, agencies need to know who to contact with relevant correspondence. Because of this, state agencies need to keep track of hundreds or thousands of environmental covenants conveyed across thousands of complex property changes. This can be particularly challenging for state environmental agencies because their core competency covers environmental compliance, not property transfer management.
With input from state agencies, Terradex’s DigClean was further developed to follow an environmental covenant from owner to owner, even as a parcel is subdivided or its identification numbers change. In fact, during informal discussions, key UECA stakeholders acknowledged that Terradex stewardship technology complements UECA and strengthens the effectiveness and impact of environmental covenants.
The DigClean Approach for Tracking Property Ownership
DigClean uses county property records, state property tax records, and geographic data to determine a parcel’s address, its boundaries and shape, and the current owner. DigClean monitors these records for changes, such as new ownership, a newly assigned parcel number, or if the parcel is split. DigClean then automatically generates a letter about the relevant environmental covenants for new property owners of encumbered parcels.
When a parcel has a minor change in ownership, such as a transfer to a different person within a trust or an owner’s name correction, DigClean can determine that the owner has effectively remained the same and does not generate a new notice. If a parcel is merged or separated, and its identification numbers change, DigClean notes the changes and maintains a current list of parcels and their corresponding numbers.
Common Transactions Involving Environmental Covenant Properties
The figure below represents three hypothetical yet typical property transactions involving a property where a covenant was recorded to ensure the integrity of an engineered control (an asphalt “cap”). In this example, Acme Plating recorded an environmental covenant. Over time, numerous property transactions made identifying the current owner and the associated parcel difficult.
The first transaction (1) demonstrates the situation where an Assessor Parcel Number (APN) changes. A change in APN can confusingly suggest a change in ownership while also making future property searches more convoluted. Here, even though the APN changed, DigClean would nonetheless recognize a non-change in ownership, and, in turn, the state agency (via DigClean) would not send a notice to the owner. Even with the change in APN, based on the actual boundaries and ownership records for the property, DigClean would continue to identify the property as owned by Acme Plating until, in the second transaction (2), the ownership does change. In this instance, DigClean would detect the change, and the state agency (via DigClean) would send a notice to the new owner informing them of the covenant. In the third transaction (3), the parcel is subdivided to support development by separating the portion of the parcel with an engineered control from the part not impacted by the engineering control. In this case, the agency would send a letter to both owners.
A Closer Look at the DigClean Process
Terradex uses automation as much as possible to directly access multiple county-based property, tax, and geographical information system (GIS) records. This process often combines and synthesizes government data with third-party commercial property data (which varies in freshness depending on various factors) to provide the most up-to-date ownership information possible to ensure compliance with IC obligations. The figure below overviews the process.
DigClean’s technical workflow connects multiple property and tax data repositories to a state’s IC registry to maintain a current ownership inventory of encumbered parcels. It sends mail notifications to new owners of properties encumbered with an IC.
As one of its primary ownership transfer detection methods, DigClean reviews property tax data, which identifies ownership and other info, and associated property boundary GIS data, which are often maintained by completely different arms of the local agencies. Using a reliable indicator, such as the APN, to “join” these datasets, DigClean builds a comprehensive geospatial parcel database (see above figure), constructed and evaluated monthly, to identify ownership or other significant changes. These changes trigger sending a letter to a new property owner on behalf of the agency.
In addition to tracking the property changes, as shown in the figure above, Terradex also tracks the additions and changes to the environmental covenants held by the state. The state routinely adds, modifies, and deletes sites that apply environmental covenants as part of the remedy. Through the DigClean process, for example, Terradex maintains a listing of environmental covenants and their associated current parcel information on any encumbered parcel for the state agency.
DigClean Helps Washington Manage Complex Portfolios of Environmental Covenants
Like most state environmental agencies, the Washington Department of Ecology (ECY) manages an extensive portfolio of contaminated sites. Although Washington has adopted UECA and maintains a public-facing inventory of properties with environmental covenants, managing the process under the state’s Model Toxics Control Act is complicated and resource-intensive, according to Mary Monahan, the statewide UECA coordinator for ECY’s Toxics Cleanup Program (Central Regional Office). Limited resources, along with a wave of retirements and new staff arrivals, have exacerbated this challenge, creating a knowledge gap in environmental covenant management at the agency. Monahan explained that while the agency strives to create a more efficient approach that harmonizes community protection and developer needs, it remains an ongoing and evolving effort.
As noted above, owners and even parcel identifiers change while the original covenants stay the same (and lack maps), making it difficult for state agencies to track and inform new property owners and other stakeholders of potential risks at these properties. To help address these challenges, Terradex works with Monahan and other ECY regulators to mold DigClean’s capabilities to meet the agency’s specific needs, managing 660 spill sites that contain about 900 covenants that encumber approximately 1,400 parcels. Terradex generates about five letters each month to notify new property owners of environmental covenants affecting their property.
Continuous Innovation with Terradex Customers
The Washington Department of Ecology is an innovative organization that, like many other Terradex customers, aims to inform its citizens about residual environmental risks. To this end, ECY collaborated with Terradex to create a state-wide parcel tracking and notification system for impacted citizens.
Our partnership with ECY demonstrates Terradex’s commitment to protecting stakeholders at potential risk, including new property owners. With ECY having enacted UECA, it also exemplifies how UECA and DigClean work together in a “Trust But Verify” model: UECA instills the “Trust” while DigClean, powered by Terradex technology and expertise, provides the “Verify.”
Terradex is actively collaborating with other states, applying this model, and we invite others to join us in this endeavor.
In Memoriam
Jeff Newschwander, who passed away June 2, 2023, collaborated with Mike Sowinski of Terradex to realize an approach to maintain the enforceability of environmental covenants. We worked together on an Interstate Technology and Regulatory Council team to establish a practice of Long Term Contaminant Management Using Institutional Controls. Our community of practitioners for long-term stewardship has always been tight and small. Losing Jeff was felt by all. Jeff navigated administrative challenges to bring forward the first deployment of this innovation. We miss Jeff, and along with Mary Monahan at ECY and her colleagues, we continue to honor his legacy. At Terradex, we extend condolences to Jeff’s family, heightened by his untimely departure from us all.