Published 12 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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Get My Free Estimate →Buying a fuel site and continuing to run it as a fuel site does not, by itself, require a Record of Site Condition. The trigger in Environmental Protection Act s. 168.3.1(1) is a change of use: changing a property from industrial or commercial use to residential or parkland use, changing it in a manner prescribed by the regulations, or constructing a building for such a change. Rezoning alone is not enough, because O. Reg. 153/04 s. 11(2) says a reference to a change in the use of a property does not include a reference to a change in the zoning. So the buyer who keeps pumping fuel has no RSC obligation, and no RSC shield. The buyer who builds townhouses has both.
The order can be addressed to you for something you did not do
Start here, because everything else follows from it. Environmental Protection Act s. 18(1) allows the Director, by written order, to require a person who owns or owned or who has or had management or control of an undertaking or property to install equipment, implement procedures, monitor, study, report, and develop and implement plans. There is no requirement that the person caused the discharge. Ownership alone is a sufficient hook.
Section 17 reaches anyone who causes or permits the discharge of a contaminant so that land, water, property or human health or safety is injured, damaged or endangered, or is likely to be. And s. 19(1) makes a certificate of property use, an order or an approval binding on any other successor or assignee of the person to whom it was directed.
Put those three together and the exposure is plain. You can inherit an order made against the vendor, and you can be made the subject of a new one simply because you now own the land. Nothing in the purchase agreement changes that, because the agreement binds the vendor, not the Ministry.
What a Phase One environmental site assessment actually is
A Phase One is a records and observation exercise, not a drilling exercise. O. Reg. 153/04 s. 24 sets its objectives: a preliminary determination of the likelihood that one or more contaminants have affected any land or water on, in or under the property, a determination of the need for a Phase Two, a basis for any Phase Two required, and preliminary information for a risk assessment.
Section 25 lists its mandatory components, and they are worth knowing because a thin report is easy to spot. A records review. Interviews. Site reconnaissance. An evaluation of the information gathered from all three. A report. Submission of that report to the owner.
Two details buyers miss. First, the study area is bigger than the lot. The regulation defines the phase one study area as the property plus any other property located wholly or partly within 250 metres from the nearest point on a boundary of the phase one property. Your neighbour’s history is in your report. Second, the work must be done or supervised by a qualified person, which under s. 5(2) means a licence under the Professional Engineers Act or a certificate of registration under the Professional Geoscientists Act, 2000. Not any consultant. That one.
On a fuel site, a Phase Two is mandatory. It is not the consultant’s judgment call
This is the single most useful thing a fuel buyer can know about the regulation, and sellers routinely present it backwards.
O. Reg. 153/04 s. 32(1) says that for the purpose of filing a Record of Site Condition, a Phase Two is required if a potentially contaminating activity is identified on, in or under the property during the Phase One, or if the property is used, or has ever been used, in whole or in part, for an industrial use or for any of three named commercial uses: as a garage, as a bulk liquid dispensing facility including a gasoline outlet, or for the operation of dry cleaning equipment.
A retail fuel site is both a gasoline outlet and a bulk liquid dispensing facility as s. 1(1) defines them. A gasoline outlet is any premises to which the public is invited, at which gasoline or an associated product is sold and put into the fuel tanks of motor vehicles. A bulk liquid dispensing facility is premises at which solvents, gasoline or associated products are stored in storage tanks and dispensed for sale. So the mandatory limb bites on the site’s history, regardless of how clean the Phase One reads. Petroleum also has its own compliance rule, at s. 49 of the regulation.
When a Record of Site Condition is legally required, and when it is not
An RSC is not a certificate of cleanliness you buy for comfort. It is a filing in the Environmental Site Registry certified by a qualified person, and the law requires it only in defined circumstances. Section 168.3.1(2) disapplies the prohibition only where an RSC has been filed and the use it specifies is the use the property is being changed to.
| What you are doing | RSC required? | Authority |
|---|---|---|
| Buying the station and continuing to sell fuel | No. There is no change of use | EPA s. 168.3.1(1) |
| Rezoning the land and nothing else | No. Rezoning is not a change of use | O. Reg. 153/04 s. 11(2) |
| Redeveloping to residential or parkland use | Yes | EPA s. 168.3.1(1)(a) |
| Changing from commercial to institutional, or to agricultural or other use | Yes | O. Reg. 153/04 s. 14 |
| Constructing a building to be used in connection with a prohibited change of use | Yes | EPA s. 168.3.1(1)(c) |
| Filing voluntarily on a Phase One alone, where none was required | Prohibited without a written voluntary-filing declaration | O. Reg. 153/04 s. 11.1 |
The shield, and the four holes in it
EPA s. 168.7(1) is the only statutory protection in the Act. Once an RSC is filed in accordance with s. 168.4, no order shall be issued under ss. 7, 8, 12, 17, 18, 97, 157 or 157.1 in respect of a contaminant that was discharged into the natural environment before the certification date and was on, in or under the property as of that date. The protected group includes the filer and a subsequent owner of the property, occupants after filing, and persons with charge, management or control after filing. O. Reg. 153/04 s. 20 sets the conditions a pre-certification owner must meet to qualify.
Now the holes. The shield does not apply where the RSC contains false or misleading information or certifications (s. 168.7(2)). It does not apply to contamination that moved off-site after the certification date (s. 168.7(3)). It is lost where the actual use differs from the use specified in the RSC (s. 168.7(4)). And orders can still issue under s. 157 for contravening a certificate of property use or the soil-management rules (ss. 168.7(5) and (6)).
Reports listed in an RSC must be retained for seven years after filing, under s. 18(1) of the regulation. If the site already has an RSC, ask for those reports. A shield built on documents nobody can produce is not much of a shield.
The tank file, and what TSSA will ask for at the next inspection
The tanks are where the environmental risk and the regulatory risk meet. TSSA’s Liquid Fuels Compliance Standard, effective 14 April 2025, lists the items inspectors order on, each tied to a clause of the Liquid Fuels Handling Code. Several are documents, and documents are what a buyer should be asking for now.
Copies of the current precision leak tests must be available. Current corrosion protection reports for the underground storage tank system must be available, and the cathodic protection test report must indicate a passing result. The sump leak detection system must be interlocked to shut off product flow, and dispenser sumps must be leak-tight. Any loss of liquid or gain of water in the tanks not attributed to condensation must be investigated. Copies of inventory control must be available, employees must be trained in emergency procedures, and applicable stage 1 vapour recovery equipment must be installed, operated and maintained.
TSSA’s published enforcement window is short: compliance orders run to immediate resolution, meaning zero days, to possible shutdown, or to 14 days. If the vendor cannot produce a current passing cathodic protection report during your condition period, that is not a paperwork problem. It is a number.
The short version
Continuing to operate a fuel site triggers no Record of Site Condition, and gives you no shield either. If you ever intend to redevelop to residential or parkland, the RSC obligation arrives with that decision, and a Phase Two is mandatory on a fuel site’s history regardless of what the Phase One says. Meanwhile EPA s. 18(1) lets the Ministry order you as owner without proving fault, and s. 19(1) hands you any order already made against the vendor. The leak tests and cathodic protection reports are the cheapest early read on the file. Ask for them first.
The two-year clock, and when an Environmental Assessment Report is required
TSSA states the removal rule in terms: an underground storage tank must be removed within two years of disuse under the Liquid Fuels Handling Code, and within three years of disuse under the Fuel Oil Code. The Fuels Safety Program may consider deviations, but you have to apply for a variance on the TSSA Client Portal and provide an Environmental Assessment Report. Guidance is in TSSA Advisory FS-175-10 R1, and TSSA’s own FAQ says abandonment in place is only available by variance.
An out-of-service tank comes with a running clock, and the clock does not reset on closing. I have written separately about how fuel tank adjustments get handled in the agreement; the removal obligation is a different animal from the inventory adjustment and needs its own treatment.
An Environmental Assessment Report is required where there is a fuel spill or leak, on the discovery of petroleum-related impacts, on the removal of a tank or site closure, or on a TSSA inspection order for one. It must be completed by a qualified person as defined in O. Reg. 153/04, under the Environmental Management Protocol for Fuel Handling Sites in Ontario. If you replace tanks after closing, TSSA Advisory FS-267-23 requires notice to fuelsinspection@tssa.org at least 10 business days before backfilling and again at least 10 business days before final inspection.
Spill containment, drainage, and Toronto’s sewer rules
The soil is the headline risk. The drain is the one that generates the order.
Toronto Municipal Code § 681-14 C(1) requires every owner or operator of a motor vehicle service station, repair shop or garage whose sanitary discharge connects directly or indirectly to a sewer to install and maintain an oil interceptor designed to prevent motor oil and lubricating grease from passing into the drainage piping. Subsection C(2) requires it to be installed in compliance with the most current requirements of the Ontario Building Code.
The City’s Best Management Practices for Automotive Service Facilities gets more specific. Oil interceptors need a minimum retention time of two hours based on the maximum expected flow. Inspect quarterly, clean when sludge exceeds 15 cm or floating material exceeds 5 cm, and clean at least annually. Sand and grit interceptors are required for wash areas, with all wash water from the washing area flowing into them. Secondary spill containment must be sized to 110 percent of the largest volume of free liquid for used batteries, spent solvents, used antifreeze, used oils, used oil filters and aboveground fuel storage tanks. And never drain shop wastes into a stormwater drain, a septic tank, onto the ground or into surface water.
What you may discharge is in § 681-2 Table 1: oil and grease of mineral or synthetic origin at 15 mg/L, benzene at 0.01 mg/L, suspended solids at 350 mg/L, pH above 6.0 and below 11.5. Where a discharge would otherwise be prohibited, § 681-6 provides the consent mechanism, being an industrial waste surcharge agreement, a sanitary discharge agreement or a hauled sewage discharge agreement on terms set by the General Manager, with § 681-7 allowing an approved compliance program while treatment works are installed.
The pollution prevention obligation you take on with the keys
Gasoline stations are named subject sectors in Appendix 1 to Chapter 681, under NAICS 447110 and 447190. That engages § 681-5: a first pollution prevention plan must go to the General Manager for the premises from which the discharge occurs within one year of commencing operations, a new plan every six years, and an update by the end of the third year.
There is a lighter path. Section 681-5B(2)(a) removes the requirement for a subsequent new plan where the discharger continually participates in and fully complies with a Best Management Practices Plan approved by Council or the General Manager, and the City confirms that for automotive service facilities, gas stations included, the obligation is met by a one-time declaration form. Find out which path the vendor is on, and get the filing.
Write the condition around the assessment calendar, not the other way round
On a fuel site the environmental condition has to be built out of the consultant’s actual schedule, because the sequence is fixed: engage the qualified person, complete the Phase One including records review, interviews and site reconnaissance across a 250-metre study area, then plan and execute a Phase Two site investigation, then review, evaluate and report.
No primary source publishes typical durations or costs for Ontario Phase One or Phase Two assessments, and I will not invent them. What I do instead is simple. Before the offer goes out, I ask the qualified person for a written schedule on that specific property with the lab turnaround built in, and the condition date gets set from that, with room to spare. Not from the vendor’s preferred closing. A condition that expires while the borehole results are still at the lab is worse than no condition, because it looks like protection and is not. That is the drafting logic behind a proper environmental clause in an Ontario agreement, and it is where your lawyer, not your broker, holds the pen.
What has to be searched, and what must never be assumed
Every one of these is site-specific. The Environmental Site Registry for any RSC. The Ministry’s registry of environmental approvals for an ECA, a certificate of property use or an order. TSSA’s regulatory document search for the licence and compliance history. The City for sewer discharge agreements, the P2 filing and licence status.
None can be assumed clean, and a vendor’s assurance that there was never an issue is not a search result. If you are planning a change of use, add the zoning layer, because redevelopment is what converts a quiet site into an RSC obligation. I have written about how to structure a zoning condition, and about what your real estate lawyer is responsible for once the reports land.
Do I need a Record of Site Condition just to buy a gas station?
No, not if you are continuing the same use. The prohibition in EPA s. 168.3.1(1) is aimed at changing the use of a property from industrial or commercial use to residential or parkland use, at changes prescribed by the regulations, and at constructing a building for such a change. Buying and continuing to operate is none of those. The flip side is that with no RSC you also have no s. 168.7 shield, so the risk sits with you as owner under s. 18(1).
My Phase One came back clean. Can I skip the Phase Two?
Not if you need an RSC. O. Reg. 153/04 s. 32(1)(b) requires a Phase Two where the property is used, or has ever been used, in whole or in part, as a garage or as a bulk liquid dispensing facility including a gasoline outlet, independently of what the Phase One found. A retail fuel site meets both definitions in s. 1(1). If no RSC is needed because you are not changing the use, a Phase Two is a commercial decision rather than a legal requirement, and on a fuel site I would still want one.
Does buying the shares instead of the assets protect me?
No. The corporation was the owner before the sale and remains the owner after it. EPA s. 18(1) reaches a person who owns or owned or who has or had management or control of an undertaking or property, with no fault requirement, and s. 19(1) binds successors and assignees to existing orders and approvals. Changing which structure you use changes your tax and your contract inheritance. It does not change who the Ministry can write to.
What does the 250 metres in a Phase One mean for me?
O. Reg. 153/04 defines the phase one study area as the property plus any other property located wholly or partly within 250 metres from the nearest point on a boundary of the phase one property. Practically, the qualified person is reviewing records and observing conditions beyond your lot line, because contamination migrates. A neighbouring former garage or dry cleaner will show up in your report, and it can drive the Phase Two scope even where your own site history looks unremarkable.
There is an out-of-service tank in the ground. How long do I have?
TSSA states that an underground storage tank must be removed within two years of disuse under the Liquid Fuels Handling Code, and within three years of disuse under the Fuel Oil Code. The Fuels Safety Program may consider deviations, but a variance must be applied for on the TSSA Client Portal with an Environmental Assessment Report provided. Abandonment in place is only available by variance. Establish the date of disuse during diligence, because the clock runs from that date, not from your closing.
What documents should I ask the vendor for first?
The ones TSSA’s Liquid Fuels Compliance Standard says must be available at inspection: current precision leak tests, current corrosion protection reports for the underground storage tank system, and a cathodic protection test report indicating a passing result. Then inventory control records, evidence that the sump leak detection system is interlocked to shut off product flow, and the investigation records for any loss of liquid or gain of water in the tanks. Then the environmental reports, any RSC and its underlying reports, and the City’s P2 filing.
What can I actually put down the drain?
Toronto’s Sewers By-law § 681-2 Table 1 sets the sanitary and combined sewer limits, including oil and grease of mineral or synthetic origin at 15 mg/L, benzene at 0.01 mg/L, ethyl benzene at 0.16 mg/L, phenolics at 1.0 mg/L, suspended solids at 350 mg/L, and pH above 6.0 and below 11.5. If the site’s discharge would otherwise be prohibited, § 681-6 allows an industrial waste surcharge agreement, a sanitary discharge agreement or a hauled sewage discharge agreement on terms set by the General Manager.
How much will remediation cost and how long will the assessments take?
I do not know, and neither does anyone quoting you a range from memory. No Ontario primary source publishes remediation cost ranges, assessment cost ranges, or typical Phase One and Phase Two durations, so any figure in circulation is somebody’s average from their own files. The honest approach is to engage the qualified person early, get a written scope and schedule for that specific property, and set the condition date from it. That is also the only way to keep the condition period from expiring mid-investigation.
Sources
- Ontario e-Laws — Environmental Protection Act, R.S.O. 1990, c. E.19
- Ontario e-Laws — O. Reg. 153/04, Records of Site Condition
- Ministry of the Environment, Conservation and Parks — Guide for completing phase one environmental site assessments
- Ministry of the Environment, Conservation and Parks — Guide for completing phase two environmental site assessments
- TSSA — Environmental Review and Environmental Assessment Reports
- TSSA — Liquid Fuels Compliance Standard
- City of Toronto — Municipal Code Chapter 681, Sewers
- City of Toronto — Best Management Practices for Automotive Service Facilities
DO THE ENVIRONMENTAL WORK BEFORE THE CONDITION DATE, NOT AFTER IT
On a fuel site the assessment schedule should set the condition period, not the other way round. If you are looking at a station or a former station anywhere in the GTA, I can help you sequence the searches, the qualified person and the offer so the calendar works in your favour instead of against it.
Book a 15-minute call or call or text 833-330-1925.
I am a broker. I do not carry out environmental assessments and I will not tell you a site is clean. What I can do is make sure the people who can tell you are engaged in time to matter.
More in this series
Jatin Dua is Broker of Record and co-founder of RE/MAX Quantum Realty, Brokerage, Unit 101, 799 The Queensway, Etobicoke. Four-plus years in the GTA and more than $100M in sales volume. He works on commercial and business purchases across Toronto and the west GTA.
This is general professional commentary from a Broker of Record on commercial and business acquisitions in Ontario. It is not legal, tax or accounting advice, and it does not create any professional relationship. Whether a licence transfers, how a purchase should be structured, what tax applies and what a regulator will require on your particular file are questions for your lawyer, your accountant and the regulator itself. Rules, fees and published requirements change — verify anything you intend to rely on against the primary source on the day you rely on it.