On August 31, the Massachusetts Supreme Judicial Court (the highest court in the Commonwealth) decided that the local conservation commission (and presumably the state) can sue a new owner of real estate to require restoration of wetlands filled by a prior owner decades earlier, and that the ability to sue a new owner renews for three years after each property transfer forever. Conservation Comm’n of Norton v. Pesa, SJC-13058 (Mass. Aug. 31, 2021). That holding not only enlarges liability, but perhaps complicates the diligence that prudent buyers will undertake.

Massachusetts adopted the first wetlands protection laws in the country in the 1960s. Municipal conservation commissions generally regulate work in wetlands under the Massachusetts Wetlands Protection Act, Mass. Gen. Laws chap. 131, § 40. One can fill or otherwise alter a wetland under the Act pursuant to an approval granted by a conservation commission known as an “order of conditions.” A property owner must restore a wetland altered without that authorization, and that obligation continues to a subsequent owner.

The Act includes a three-year statute of repose for that new owner, running from the recording of the deed or the death that transferred title to the new owner. In Pesa, a prior owner, John Texeira, had filled wetlands in an area larger than what was approved in his order of conditions. The last filling occurred in 1984. He never received a certificate of compliance from the Conservation Commission, which would have indicated that the work was properly performed. In 1996, he transferred the property to himself and his wife, Ann. The Conservation Commission did not seek enforcement, which is not unusual, since conservation commissions do not routinely review old “open” orders of condition unless a problem has arisen or a property buyer has asked for its involvement. John died in 2006, and Ann, then the sole owner, sold the property to Pesas in 2014. Before the transfer, the Conservation Commission noted the violation, and requested restoration. The transaction closed nonetheless.

The Superior Court decided that the statute of repose had run as to Ann Texeira, and therefore as to all subsequent owners.

The SJC decided to the contrary. The Court held that the statute of repose is personal to each owner. Each new owner is exposed to enforcement for a prior owner’s wetlands violations, for three years after the transfer. Here, the illegal filling occurred 30 years before the Pesas purchased the property.

The SJC observed that new owners would be on notice of a possible violation if, as here, the conservation commission issued an order of conditions, which would be recorded, but never granted a certificate of compliance, which would also be recorded. But not all historical wetlands violations merely exceed the limits of an order of conditions; some violations may have resulted from work that required no approval at all. Stay tuned on how sellers and buyers will address this ongoing liability and on how transactional diligence will proceed going forward.