Underground Oil Storage Tanks – Post-Removal Steps



Naomi R. Rozenberg
Phone:  604-685-3911
Email: nrr@lmlaw.ca



If an underground oil storage tank (“UST”) was removed from your property, there are certain steps you can take to protect yourself, your family, and your investment.

The UST may have already rusted, corroded and leaked furnace oil, causing soil and groundwater contamination. Contamination from the UST can affect the health and safety of your family. It can also affect the market value of your property.

If your property was contaminated, you may be responsible for the cost of remediation, even after you sell your property. If the contamination has migrated or spread past your property line, you may also be responsible for your neighbours’ remediation costs. To reduce these risks, consider taking the following steps:

1.     Retain an environmental consultant.

A qualified environmental consultant can determine whether your property is a contaminated site, and the extent and boundaries of the contamination. If an environmental consultant finds contamination, there are steps that should be taken to protect your rights.

In a cost recovery lawsuit brought pursuant to the BC Environmental Management Act (the “EMA”), the Court will require proof that the property was a “contaminated site”. Your consultant should collect soil samples, test for contamination and delineate the extent of the contamination, so that the area can be properly designated as a contaminated site by the Ministry of Environment or the Court. A visual inspection of the area is not enough.

The environmental consultant should prepare a report detailing the tank specifications and removal date, the amount of soil removed, and the levels of contamination before and after the remediation process. The consultant should also ensure that any contaminated soil is safely and properly transported to an approved disposal facility.

2.     Remediate the property.

If your property is contaminated, it is prudent to carry out remediation to reduce the risk of a future claim against you.

A qualified environmental consultant should ensure that good engineering and environmental practices are followed when remediating the soil.

Remediation costs vary and include fees for a work permit, an engineer or environmental consultant report, excavation and removal. Costs to remediate contaminated soil, which include transportation and disposal of dangerous goods, can be significant.

In order to seek compensation under the EMA, you must have already incurred the remediation costs. Future costs are not compensable under the EMA. See below for more information on EMA cost recovery actions.

3.     Fulfill your obligation to disclose.

If a site investigation reveals that contamination has migrated or is likely to have migrated from your property to a neighbouring site, within 15 days you must provide written notification to the owners of the neighbouring site, and deliver a copy of the notification to the Ministry of Environment.

The requirement to provide this notice is a statutory duty under section 60.1 of the Contaminated Sites Regulation. Your environmental consultant should assist you with this, but you can visit the Ministry website and download the notification form provided.  Deliver the notice in person, via registered mail, or both.

The written notice must contain your name and address, the name, address and telephone number of the person to contact regarding the investigation, and a general description of the nature of the migration or likely migration of each substance.

4.     Notify your insurer(s).

If contamination has (or may have) migrated from your property onto a neighbouring site, you may have third party liability insurance coverage for the cost to remediate the neighbouring site. As such, you should immediately notify your insurer(s), and do not take any steps or make any statements that might prejudice the insurer.

5.     Consider a cost recovery action.

If you have incurred or will incur costs to remediate a contaminated site, consider filing a lawsuit to recover some of those costs from others.

Parties to a cost recovery action should obtain independent legal advice to ensure they have explored all avenues and exhausted various options to ensure their rights are protected and obligations fulfilled.

a.     Statutory claim under the EMA

The EMA allows you to bring a lawsuit to recover your reasonably incurred costs of remediating a contaminated site. Section 47(5) of the EMA provides that any person who incurs costs in carrying out remediation of a contaminated site may commence an action to recover their reasonably incurred costs from one or more “responsible persons”.

In order to bring this statutory cause of action, you must demonstrate that:

1. the property is a contaminated site;

2. you incurred costs of remediation, and those costs were reasonable; and

3. there is another person who is responsible under the EMA for the costs of remediation.

Remediation costs are only recoverable from ‘responsible persons’, who are jointly and separately liable for these costs. The cause of action is retroactive, meaning that current and previous owners or operators of the site are responsible. In addition to owners and operators, the following categories of persons are responsible for remediation of contaminated site: persons who transported the contaminants; and in limited circumstances secured creditors and producers of the contaminants. It is important as a preliminary matter to identify all potential ‘responsible persons’ who may be sued.

Initially, all of your legal costs in advising you on your responsibilities under the EMA, helping you to interpret and guide you on advice received from your environmental consultant, communicating with the Ministry of Environment, and negotiating with persons responsible for contaminating your property may be recoverable as ‘remediation legal costs’.

b.    Common law claims

In addition to a cost recovery action under the EMA, you may also have a common law claim for breach of contract, negligence, misrepresentation, or nuisance. Plaintiffs can simultaneously pursue (a) a statutory action under the EMA and (b) common law remedies, to recover their remediation costs.

6.     Before you sell.

Property owners have a duty to disclose to purchasers if a UST has been removed or decommissioned. A vendor who fails to disclose this information can be sued by the buyer for misrepresentation and breach of contract.

Do not enter into a contract of purchase and sale if you know or suspect there is environmental contamination on the property unless and until you have sought legal advice.

Purchase and sale contracts include a standard clause that ‘time is of the essence’. Remediation often costs more and takes longer than anticipated; it is that much more stressful to deal with contamination when you are ‘under the gun’ and trying to meet the deadline to complete a sale.

If you do enter into a contract with a buyer, notwithstanding the presence of soil contamination, you should disclose that fact to the buyer, confirm in writing which party is responsible for carrying out the remediation, and adjust the purchase price accordingly to account for the remediation costs.

7.     Seek legal advice.

Deadlines to sue (known as limitations periods) may preclude you from bringing or maintaining a lawsuit to recover the cost of remediation. You may also be bound by contractual obligations set out in a lease or purchase agreement.

It is therefore important to seek independent legal advice as soon as possible if you know about or suspect any contamination on your property.


WHAT WE DO:  Lesperance Mendes has been advising property owners and others on environmental law since 1997.  If you are dealing with a contaminated site or other environmental law issue, please contact Naomi Rozenberg, Partner, at 604-685-3911 or nrr@lmlaw.ca.

THIS ARTICLE IS NOT LEGAL ADVICE:  This article provides general information and should not be relied on upon without independent legal advice.