Environmental Lien Search and Reports FAQ

An environmental lien is a legal claim or encumbrance placed on a property to secure payment or compliance with environmental cleanup and remediation costs from environmental damage caused by the current or prior owners. These liens usually are imposed by government agencies like the Environmental Protection Agency, other environmental authorities, or by individuals and private entities who have been subject to damages. This ensures that responsible parties address and pay for damages caused, including cleanup of environmental contamination or other environmental hazards.

Environmental Activity and Use Limitations (AUL) are part of the regulatory approach to managing contaminated lands. They are typically associated with the cleanup and redevelopment of brownfield sites.

Environmental liens may complicate property transactions as they usually must be addressed before a property can be sold, transferred, or further developed. Buyers and lending institutions typically conduct due diligence to identify any existing environmental liens and assess their implications. Once the required environmental cleanup or remediation activities are completed and any associated costs are paid, the environmental lien can be released or satisfied. This typically involves working with the relevant regulatory agency to demonstrate that the property is now in compliance with environmental regulations.

An environmental lien report, also known as an Environmental Lien Search, provides information about any existing environmental liens, AULs, or other environmental encumbrances found of record on a property. Depending on needs, this report may include a Chain of Title to 1940 or a Chain of Title to 1980. An environmental lien report is typically acquired during a Phase 1 Environmental Site Assessment on commercial property or large residential developments. By obtaining an environmental lien report, parties involved in a property transaction can assess the level of environmental, and thus financial, risk associated with the property, support compliance with environmental regulations, meet lending and legal requirements, and limit potential liability.

The newer ASTM E1527-21 standard includes a more detailed definition of Recognized Environmental Condition (REC), expands the scope of potential environmental hazards, adds additional requirements for significant data gaps, provides additional guidance on Environmental Liens and Activity Use Limitation (AUL) searches, and adds the requirement for title reports to search property records back to 1980. Read more about the key differences in our article, Environmental Lien Search Differences, ASTM E1527-13 vs E1527-21.

The ASTM E1527-13 lists the various document repositories that must be researched to meet those standards. These places, listed in section 4.6 of the standard, are federal, tribal, state and local government records. The specific records offices that we research to complete any given search vary based on the subject property location. This is a very important distinction. Wherever your site is located, our team will know the appropriate locations to research in order to meet this requirement. Due to decades of experience in the industry, and as the number one title search company servicing this industry, we have a proprietary and complete list of state by state specific, judicial and local records resources to search for recorded environmental encumbrances.

The chain of title report is done by researching the County records grantor and grantee index, following the ownership transfer back to a specified time. Our clients typically request that we research back to 1940 to meet the requirements described in section 8.3.2 of the ASTM E1527-13. For the latest E1527-21 standard, we research back to 1980.

While neither are common, AULs are more prevalent and when found often exist within deeds. Despite being uncommon, the financial risks associated with environmental liens can be extremely large.