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By: Mark A. Chertok and Elizabeth Knauer
This article discusses considerations for developers contemplating the purchase or development of real property that contains or is likely to contain regulated wetlands. The presence of regulated wetlands on a site proposed for development can often present complications in terms of time and expense in securing permits as well as restrictions on the type or magnitude of development that regulators will approve. In some circumstances, permits may be denied altogether. Wetlands can be regulated at the federal, state, and municipal levels. This article focuses on the federal regulatory regime.
Substantial declines in wetland acreage in the United States have been documented over the past 50 years, as the result of filling for agriculture and other development. 1 Beginning in the 1970s, recognition arose that wetlands—both freshwater and tidal—perform essential functions in preventing flooding through the retention and slow release of excess water. Wetlands purify storm water runoff by filtering out nutrients, sediments, and pollutants, thereby protecting both surface and ground water. They also provide nesting, wintering, resting, and feeding grounds for numerous species of migratory waterfowl. Estuaries provide critical food sources, spawning grounds, and nurseries for coastal fish and shellfish on both coasts. 2 Therefore, they have become the subject of regulatory efforts to protect them, primarily through permitting standards that are designed to require developers to avoid or minimize incursions on wetlands, and to mitigate any loss of wetlands through replacement or restoration projects.
Waters of the United States
The primary basis for the federal regulation of wetlands derives from Section 404 of the Federal Water Pollution Control Act (Section 404), commonly known as the Clean Water Act (CWA). 3 CWA Section 404 grants the U.S. Army Corps of Engineers (Corps) the authority to issue permits for discharges of dredged or fill material into “navigable waters,” which the Act defines as “waters of the United States.” 4 This term includes not only traditional navigable waters but also tributaries thereto, interstate waters and wetlands, and wetlands adjacent to any of these waters. 5 (Traditionally navigable waters are those that “are currently used, were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide.” 6 )
To read the full practice note in Lexis Practice Advisor, follow this link.
Mark A. Chertok is a principal of Sive, Paget & Riesel P.C. He has been active in environmental and land use counseling, permitting, enforcement, and litigation, with an emphasis on waterfront projects, for more than 35 years. His experience spans a broad spectrum of substantive areas, including environmental impact statement counseling and litigation under the NEPA, the New York State Environmental Quality Review Act and City Environmental Quality Review, wetlands and water quality permitting under the Clean Water Act and state counterparts, coastal zone management, land use and zoning, and historic preservation, major transportation projects, air quality and climate change issues under the Clean Air Act, hazardous substances remediation and litigation under the Comprehensive Environmental Response, Compensation and Liability Act, remediation under the New York State Brownfield Cleanup Program, oil spill remediation under the New York State Navigation Law, and compliance review of Phase I and Phase II environmental assessments. Elizabeth Knauer is a principal of Sive, Paget & Riesel P.C. Elizabeth’s practice includes a variety of permitting, environmental review, and enforcement matters as well as environmental litigation. She advises clients and negotiates with agencies with respect to environmental impact assessment and litigation under the State Environmental Quality Review Act and the National Environmental Policy Act, permitting under the Clean Water Act and Rivers and Harbors Act and state counterparts for work in wetlands and surface waters, and environmental remediation. She frequently defends land use and other determinations made by municipal and state agencies when legal challenges are filed on environmental grounds. Elizabeth’s broad litigation experience also includes matters relating to environmental permitting standards, wetlands jurisdiction, environmental contamination, administrative law, and contractual provisions related to environmental conditions.
For a summary of state laws and regulations governing wetlands protection, see
> WETLANDS PROTECTION STATE LAWS SURVEY
> Real Estate > Commercial Purchase and Sales > Due Diligence > Practice Notes
For a discussion on the assessment of known, potential, and contingent environmental liabilities and obligations associated with a parcel of property, see
> ENVIRONMENTAL DUE DILIGENCE IN REAL ESTATE TRANSACTIONS
For a review on the environmental risks that real estate lenders and secured creditors should be aware of, see
> LENDER LIABILITY UNDER ENVIRONMENTAL LAWS IN REAL ESTATE TRANSACTIONS
> Real Estate > Acquisition Financing > Due Diligence > Practice Notes
For information on the environmental risks that can occur in corporate mergers and acquisitions, see
> ENVIRONMENTAL DUE DILIGENCE IN M&A TRANSACTIONS
> Real Estate > Corporate Transactions > Due Diligence > Practice Notes
For an overview on environmental impact reviews that may be required for real estate developments, see
> ENVIRONMENTAL IMPACT REVIEW IN REAL ESTATE TRANSACTIONS
For guidance on federal regulation of stormwater discharges and permitting, as well enforcement actions, see
> STORMWATER PERMITTING AND MANAGEMENT REQUIREMENTS
1. Dahl, T.E., U.S. Dep’t of the Interior, Fish and Wildlife Service, Status and Trends of Wetlands in the Conterminous United States 2004 to 2009 (2011). 2.See M. Holloway, High and Dry: New Wetlands Policy Is a Political Quagmire, Scientific American, Dec. 1991, at 20. 3. 33 U.S.C.S. § 1251 et seq. 4. 33 U.S.C.S. § 1344(a); 33 U.S.C.S. § 1362(7). See also 33 C.F.R. § 323.1. 5. 33 C.F.R. § 328.3(a). 6. 33 C.F.R. § 328.3(a)(1).