Client Alert
The Connecticut Property Transfer Act (CPTA) is set to sunset on March 1, 2026. It will be replaced by Release-Based Cleanup Regulations (RBCRs). This means that filings pursuant to the CPTA will no longer be required for transactions closing on or before March 1st. Compliance obligations, however, will continue for establishments already in the CPTA program.
The CPTA
The CPTA has been one of the most onerous environmental property transfer laws in the United States for nearly forty years. The CPTA requires the disclosure, investigation and remediation of environmental conditions when certain properties or businesses, defined as “establishments,” within the state are transferred. An “establishment” is broadly defined to include any real property or business that generated, recycled or treated more than one hundred kilograms of hazardous waste in a single month since November 1980 and possibly even before. The CPTA is triggered by the sale or transfer of an establishment through a change in ownership. Once the CPTA is triggered, the seller must file forms with the Connecticut Department of Energy and Environmental Protection (DEEP) disclosing the environmental condition of the property and certifying that the seller (or another designated certifying party) will investigate and remediate any contamination. All subsequent remediation must be approved by the DEEP and, once completed, the Department will verify its completion. Penalties for noncompliance with the CPTA can be severe.
What to Expect with the RBCRs
After March 1, 2026, the transfer of an “establishment” will no longer trigger environmental remediation obligations in Connecticut. Instead, the state’s new RBCRs will require reporting and remediation of contamination upon its discovery. The RBCRs cover newly discovered historic releases, existing releases that pose an imminent risk to human health or the environment, and new spills or releases. Reporting timelines and remediation requirements under the RBCRs vary depending on the type and severity of the release. Notably, the RBCRs apply to all properties, including residential, and a review of historic records indicating that a release occurred on a property does not necessarily constitute discovery of a release for purposes of the RBCRs. Further, remediation standards for covered releases, which were originally set in 1996, remain generally the same but have been modified to allow for risk-based cleanup standards, permits-by-rule to manage certain conditions in place, and special standards for managed multi-family residences.
The sunset of the CPTA and implementation of the new RBCRs put Connecticut’s environmental remediation requirements more in line with those of many other states. That said, the RBCR program is complex and contains a number of state-specific requirements that may affect diligence in transactions and should be understood by any responsible party or stakeholder with an interest in Connecticut real estate.
