Environmental issues continue to be of paramount importance in many commercial lease settings, and the trucking industry is no exception.

Trucking companies and logistics services providers should consider the following four environmental tips before entering into their next lease agreement:

Establishing the baseline

At the commencement of the lease term, tenants should consider whether a Phase I and/or Phase II environmental assessment has been completed for the leased property. If the landlord has not completed a recent assessment, trucking tenants should consider investing the additional funds up front to have these reports completed.

This will serve as a “baseline” should any dispute arise at the end of the term regarding the presence of any contamination and who is responsible. If a landlord already has a Phase I or Phase II completed, tenants should ensure the report is recent, sufficient in scope and consider if they are legally permitted to rely on it, including whether a “reliance letter” is required.

Review your covenants

Environmental warranties and covenants often include an agreement that the tenant will not bring any contaminants onto the leased premises.

However, trucking or transportation companies cannot always predict or know for certain what will be contained in customer packages, shipping containers, etc. In some cases, companies may transport or store dangerous goods, or have fuel tanks on site.

These provisions should be read and considered carefully so tenants are not agreeing to obligations which they will be unable to meet or will be held responsible for. Exceptions, knowledge qualifiers and other revisions to these types of warranties and covenants may be appropriate.  

Use of certain substances

If a trucking company intends to clean its fleet on-site, consider negotiating for the right to use certain substances in the leased premises.

This includes insolvents and other cleaners, as well as propane tanks to operate equipment. If you intend to install and use a fueling, washing or servicing station, ensure this has been made clear and is permitted under the terms of the lease.

Tenants servicing trucks on the leased premises should also account for the presence and storage of motor oils and other substances that may otherwise be prohibited under the terms of the lease.

Regulatory compliance and drainage

Stormwater management and drainage is always a topic of major concern for the Ministry of the Environment, Conservation and Parks as stormwater runoff goes directly to our natural watercourses.

Tenants should assess the grading of any paved outdoor component of their leased premises to understand where runoff will go, particularly where vehicles are being stored onsite, including  to ensure that any spills do not enter catch basins.

It may be worthwhile to consider using oil/water separators and ensure that all trucks are equipped with small spills kits.

Tenants should be aware of municipal bylaw enforcement practices for sanitary sewers and Ministry requirements, including reporting spills to the Spills Action Centre. Trucking companies should also ensure all employees and other personnel onsite are aware of their reporting obligations. It is also a good idea to post contact information for the applicable reporting bodies in a prominent location.

The above are just some of the environmental matters to be considered in entering a new lease agreement and different circumstances may warrant different considerations.

This piece was co-authored by Julia Cicconi, Miller Thomson LLP.