Union Leader: KNOW THE LAW: Past, Present & Future Violations as New Owners of Gasoline Station – 01/2010

January 25, 2010

This question was answered by Jarrett Duncan of the McLane Law Firm

Q: I intend to lease and operate with the option to purchase an existing gasoline re-filling station containing aboveground and underground storage tank systems and an automotive service garage.  By simply operating the facility, am I at risk of incurring liability for any past, existing or future violations of state environmental laws? 

A: Absolutely.  These operations require strict compliance with numerous state environmental laws.  Any violations, as either owner or operator of the facility may result in significant administrative fines, civil penalties or criminal actions. 

Prior to commencing operations, you must understand that once you become an operator of the facility, you will be at the risk of incurring liability for any violations of state or federal regulations.  While you cannot eliminate this potential liability with the state, you can allocate your liability separately through a written agreement with the property owner containing specific provisions establishing which party is responsible for past, present and future violations at the facility.  Next, you should retain an environmental consultant to assess the nature of any non-compliance or contamination issues. 

Once you become the owner and operator of the facility you are at risk of becoming liable for any past, present or future violations and/or resulting contamination.  Therefore, it is imperative that the purchase agreement provide specific provisions allocating responsibility among the parties for past and future violations.

Operating aboveground and underground storage tank (“AST” and “UST”) systems requires strict compliance with state regulations.  Relative to ASTs, proper registration, secondary containment, overfill protection, labeling, inspections, and recordkeeping is required.  Additionally, if any AST contains more than 660 gallons of storage capacity or if there is 1320 gallons of storage capacity cumulatively, a spill prevention plan must be prepared and made available at the site.  Relative to USTs, proper registrations, double-wall containment, overfill protection, vapor recovery, monitoring, inspections and recordkeeping is required.  By registering the tanks and maintaining compliance with all regulatory requirements, you may be eligible for financial assistance through a State fund for expenses relating to spills and leaks from the tanks and into the environment.

Further, operating an automotive service garage will likely involve the use and/or storage of hazardous and solid waste materials requiring strict compliance with state regulations.  The facility will need a generator number to allow for the proper disposal of hazardous wastes including, used wipes, solvents, used oil and used oil filters and parts washers.  Likewise, storage of scrap metal, used parts or waste tires may require a solid waste permit.  You must also comply with all requirements for proper handling and storage of universal wastes including, batteries, used antifreeze and mercury switches.  Also be sure that any discharges of fluids through floor drains or into storm drains are properly permitted. 

Remember, the state can inspect your facility at any time making compliance a first priority.

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