Chapter 6. Environmental Hazards in Real Estate.

Mold Remediation

there is little benefit in testing mold because it should be removed regardless of whether it is releasing toxins. Sellers should be cautioned to not simply paint over a moldy surface. Even if your seller plans to use a mold-killing primer, the surface should be cleaned of mold and dried thoroughly before the primer is applied.

Underground Storage Tanks (USTs)

underground storage tank (UST) is a storage tank buried underground that is used to store substances such as petroleum, heating oil, gasoline, chemicals, pesticides, solvents, and hazardous waste. These tanks can present an environmental hazard because they are subject to corrosion, spills, leaks, and overfills. Furthermore, a leaking storage tank on one property could contaminate a neighboring property, soil, and groundwater. North Carolina Leaking Petroleum Underground Storage Tank Cleanup Act provides for a trust fund that helps owners of problem tanks pay for cleanup costs. The Act also regulates UST installation.

Asbestos Disclosure

For agents buying and selling homes made in the 1970s or before, it's best to have a good understanding of where potential dangers lie and whether asbestos is present in a home. Sellers in North Carolina must disclose known asbestos materials in a home, although there is no federal requirement for disclosure.

Formaldehyde

Formaldehyde (methanal) is a colorless, flammable gas at room temperature and has a strong odor. Urea-formaldehyde is a clear chemical produced from urea and formaldehyde that is used in manufacturing.

Mold-Related Litigation and Insurance

Regardless of whether there is a proven connection between exposure to mold and serious health problems, lawsuits are rising. In some cases, millions of dollars have been awarded even without scientific proof that mold was the cause of the health problems. Initially, these lawsuits were against construction companies and insurance companies. However, lawsuits have included builders, architects, contractors, sellers, landlords, property management companies, brokers, and real estate salespeople. Some insurance companies include mold exclusion clauses in home insurance policies.

Asbestos Remediation

Removal of asbestos-containing materials is the only permanent solution to an asbestos problem. It is, however, an expensive process. Since asbestos is thought to be a problem only when it becomes airborne, some believe it is best to simply monitor its condition if it is in good condition and not likely to be disturbed. Asbestos inspections and the removal of regulated asbestos-containing materials in North Carolina must be done by state-accredited asbestos professionals, such as asbestos contractors and inspectors.

Radon

is a naturally occurring radioactive gas that emanates from rocks, soil, and water caused by the decay of uranium. It is the densest gas known and is odorless, colorless, and tasteless, meaning it cannot be detected by sight or smell. Indoors, it can present a problem because it can build up to a dangerous level, especially in air-tight homes. This means that radon can be more of a problem in newer homes, which are built to be more airtight. usually through cracks or holes in the foundation, but it can also seep in from crawl spaces and uncovered sump pumps. Some deaths each year are also attributed to radon from household water. For example, private wells can be contaminated in areas with high radon levels in groundwater.

Toxic Mold Health Risks

mold can produce allergens, which can trigger reactions such as wheezing, eye and skin irritation, and a stuffy nose. For some people, mold can cause asthma attacks, chronic fatigue, digestive problems, and even neurological problems. - molds that don't produce toxins - molds that produce toxins

UFFI Health Risks

The short-term effects from high levels of formaldehyde in the air can cause: Aggravated asthma, breathing difficulties, wheezing, and coughing Burning sensations of the eyes, nose, and throat Watery eyes Skin irritation or rashes Nausea Some studies suggest that formaldehyde may cause cancer

Mold Disclosure

There is no federal requirement for mold disclosure and no federal standards have been set to measure contamination. Nevertheless, more and more states are implementing laws regarding mold disclosure. In North Carolina, mold is not listed as one of the hazardous substances on the Residential Property and Owners' Association Disclosure Statement. This means that mold is not considered a material fact unless there is a large amount of mold in unusual places in North Carolina.

UFFI Remediation

Typically, UFFI ceases to release formaldehyde after it cures, which can take a few months, meaning that insulation that was installed years ago wouldn't pose any health risk now.

Lead Disclosure Key Points

Under Title X, sellers, landlords, and real estate agents share responsibility for ensuring compliance with lead-based paint disclosure rules. According to HUD, real estate agents must comply with the law if the seller or landlord fails to do so. However, the agent is not responsible or liable if the owner conceals information, as long as the real estate agent does not know about the issue and the agent has informed the sellers or lessors of their obligations to disclose. There is no requirement that sellers test for or mitigate (remove or repair) lead hazards, although a seller must complete a series of steps before a buyer executes a binding purchase contract. The written disclosure and EPA pamphlet must be given prior to a seller accepting a buyer's written offer to purchase or prior to a landlord accepting a tenant's offer to rent. Remodelers must also give the pamphlet but not the form.

Asbestos Bans

While there has been no sweeping ban of all uses of asbestos in the US, asbestos use is carefully regulated by the EPA, and most uses in residential construction were effectively banned by 1978 when EPA banned spray-applied surfacing materials for purposes not already banned. Because asbestos can still be found in some products in homes, keep these points in mind: If you are working with a buyer or seller of an older home, encourage your client to contact an asbestos professional to address any questions or concerns. As asbestos is microscopic and odorless, the only way to know for certain whether a specific building material contains it is to have a sample of the material analyzed by a lab. Many sources of asbestos can quickly become hazards for do-it-yourselfers or contractors due to the damage that removal and remodeling cause to the materials containing asbestos. Flooring, roofing, and siding materials (which are commonly disturbed in renovation and/or demolition activities) are typically considered non-friable in that the material is not crumbly and generally the fibers are not made airborne. If handled properly (i.e. thoroughly wetted), these are less of a concern than friable materials. Most products made today do not contain asbestos; however those that do contain asbestos must be labeled.

Environmental Hazards

are situations where there is potential for harm to come to persons or property from conditions that exist either outside or within a property. These hazards are important to real estate brokers because they can involve an individual's home and may cause a risk to someone's health or life.

Lead-Based Paint

including contaminated dust or soil from lead-based paint that is chipping or peeling is one of the most common causes of lead poisoning and elevated blood lead levels in children because the particles can be easily inhaled or ingested. Most lead poisoning occurs via the nose and mouth, with ingestion as the primary cause of poisoning in small children.

Lead

is a bluish-white metal that, when exposed to air, becomes a dull gray. Lead occurs naturally, but how it has been manipulated and used is what has made it hazardous as a poison. The two main sources of lead poisoning are: Lead-based paint Water contamination

Asbestos

is a fibrous material derived from a naturally occurring group of minerals. In the past, asbestos was commonly used in many building materials because of its insulating, heat-, and fire-resistant properties. It was also embedded in various construction materials, such as cement and plastic, and was used in ceiling tiles and as insulation for pipes and ductwork. Asbestos shingles were also popular as siding on homes. Until the 1970s, many types of building products and insulation materials used in homes contained asbestos.

Toxic Mold

is a fungus that can grow anywhere and on any organic material. In order to grow, mold requires moisture, oxygen, and a food source. There are over 100,000 known species of mold and mold can grow any place that meets these requirements.

Lead and Water Contamination

Lead was frequently used in plumbing systems in homes and businesses prior to the 1930s. Lead in water can occur in a variety of ways: Lead pipes Lead solder Well-water contamination Lead present in water is colorless, odorless, and tasteless.

Signs indicating a presence of moisture

Visible mold growth Leaks in plumbing, roofs, or windows Strong, "musty" or "mildewy" odors Water stains on ceilings, walls, or floors Warped wood Cracked or peeling paint Peeling dry-wall tape Clogged gutters

Agents' Responsibilities

Agents share the responsibility with sellers and landlords for complying with the law. Agents must comply with the law, even if the seller or landlord fails to do so. For instance, if an agent knows of lead-based paint within a property and does not disclose it, he could be held liable. Agents must ensure the written disclosure and EPA pamphlet are given to the buyer prior to a seller accepting a buyer's written offer to purchase or prior to a landlord accepting a tenant's offer to rent. Agents must initial and sign applicable sections of the Lead-Based Paint Hazard Addendum.

Lead-Based Paint or Lead-Based Paint Hazard Addendum

As permitted by federal law, North Carolina has its own disclosure form that meets the federal disclosure requirements, the Lead-Based Paint or Lead-Based Paint Hazard Addendum (Please download or print for your reference). The addendum must be given to a prospective buyer before he or she makes an offer and it should be included when the purchase offer is given to the seller.As you look over the Lead-Based Paint or Lead-Based Paint Hazard Addendum, you will see that the form includes the following sections: Property address and the names of the seller and buyer. Statement indicating that the addendum is to be attached to and made part of the purchase offer and contract. Provision for a Due Diligence Period during which the buyer may obtain a risk assessment or inspectionfor lead-based paint at the buyer's expense.The buyer may waive this right.The contract may extend the buyer's time beyond the 10-days required by federal law. A statement that lead-based paint is not necessarily a hazard if it's in good condition and mention of the EPA pamphlet.All buyers and renters of dwellings built prior to 1978 must be given this pamphlet. Lead Warning Statement, which includes a summary of health risks, notifying buyers that any residence built prior to 1978 may contain lead-based paint. Seller's Disclosure where sellers are to disclose known lead-based paint issues and indicate if they have records or reports available. Buyer's Acknowledgement section for purchasers to acknowledge if they have received any reports or the EPA pamphlet and their right to an assessment period. Agent's Acknowledgment section for agents to acknowledge their role in compliance and to affirm that the agents informed the sellers of their obligation. Certification of Accuracy section with sections to be filled out and signed by the buyer, seller, and agents. The addendum must be given to a prospective buyer before she makes an offer.

The federal government banned consumer uses of lead-based paint in _____. Lead-based paint disclosures are now required for any house that was built prior to that year.

A. 1968 B. 1978 C. 1987 D. 1992 E. 1998 In 1978, the federal government banned consumer uses of lead-based paint and lead hazards must be disclosed.

Radon Disclosure

Be aware that EPA testing in recent years has indicated that much of North Carolina has higher levels of radon than previously thought. The presence of radon over EPA's recommended maximum level of 4.0 picocuries is considered a material fact in North Carolina, meaning it must be disclosed.

Radon Health Risks

Because it is radioactive, radon has been identified as a cancer-causing agent. Lung cancer is the primary health concern with extended exposure to radon. The World Health Organization (WHO) estimates that radon causes up to 15% of lung cancer worldwide. There is also the possibility that radon could contribute to health issues such as allergies, asthma, hypertension, diabetes, high cholesterol, skin and colon cancers, and birth defects.

UFFI Disclosure

Despite the controversy over formaldehyde risks, like asbestos, radon, and lead-based paint, remember that the State of North Carolina Residential Property and Owners' Association Disclosure Statement specifically lists certain hazards. Let's look at that item on the form again: Are there any hazardous or toxic substances, materials, or products (such as asbestos, formaldehyde, radon gas, methane gas, lead-based paint) which exceed government safety standards, any debris (whether buried or covered) or underground storage tanks, or any environmentally hazardous conditions (such as contaminated soil or water, or other environmental contamination) which affect the property? This means the known presence of formaldehyde "which affects the property" must be disclosed to potential buyers.

Formaldehyde in old insulation presents a severe health risk. T OR F

FALSE Over time, the fumes and release of formaldehyde from a product dissipate, so insulation that was installed decades ago shouldn't pose a health risk now.

Violations

Failure to abide by the Residential Lead-Based Paint Hazard Reduction Act or the new RRP regulations may result in both civil and criminal penalties. The Act also allows a court to award treble damages (tripled compensatory damages) against violators. Fines under North Carolina law may be $750 per day. Under the EPA sanctions, fines may be up to $32,500 per day.

Title X

In 1978, the federal government bannedconsumer uses of lead-based paint, although some states banned it even earlier. In 1992, the federal government passed the Residential Lead-Based Paint Hazard Reduction Act, also referred to as Title X. The goal of Title X was to protect families from exposure to lead from paint, dust, and soil because of the dangers presented by lead-based paint remaining in older homes. Section 1018 of this law directed HUD and EPA to require the disclosure of known information on lead-based paint and lead-based paint hazards before the sale or lease of most housing built before 1978.

Mold Toxins

It's important to understand, however, that the color of a mold is not an indicator of whether it produces toxins. To put it simply, molds that produce toxins can be any color, and not all black molds produce toxins.

The Superfund Act (CERCLA and SARA)

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) was passed in 1980 to address hazardous waste sites. It was amended in 1986 by the Superfund Amendments and Reauthorization Act (SARA).

Radon Remediation

The EPA recommends that owners test before placing a home on the market and that buyers ask about the results of tests. If the homeowner has not performed tests, it is recommended that the buyer have the home tested for radon by a qualified tester. The cost of remedying a house with high levels of radon gas is relatively inexpensive compared to the remediation of many other hazards. With low levels of radon, simply sealing cracks may be enough; with higher levels, a system to draw radon out of the house may be necessary. If radon levels are in excess of 4 pCi/L (picocuries per liter of air), an active system should be installed, or an existing passive system should be activated by having a qualified mitigator install a vent fan.

North Carolina Lead-Based Hazard Management Programs

The North Carolina Health Hazards Control Unit (HHCU) under the DHHS administers two lead-based paint programs in the state of North Carolina. These programs are: Lead-Based Paint Hazard Management Program (LHMP) for abatement activities Lead-Based Paint Hazard Management Program for Renovation, Repair and Painting (LHMP-RRP) The LHMP Requires a person who (or firm that) performs an inspection, risk assessment, abatement or abatement design work in a child-occupied facility (including, but not limited to, daycare centers, preschools, and kindergarten classrooms) or for target housing (those built before 1978 with some specific exceptions) to be certified by the HHCU. Establishes the necessary training for certification. To become a certified renovator, an individual must successfully complete an eight-hour course from a North Carolina approved training provider. The HHCU also issues permits for and inspects lead-based paint abatement projects. Owner-occupied do-it-yourself renovations are not required to be done by certified firms or certified renovators.

Superfund Liability

The Superfund imposes liability on parties responsible for, in whole or in part, the presence of hazardous substances at a site. Note the following provisions: Parties may be held liable for acts that happened before Superfund's enactment in 1980. A potentially responsible party (PRP) may be held liable for the entire cleanup of the site when the harm caused by multiple parties cannot be separated. If any amount of hazardous waste is found at the site, the PRP may be liable.

Lead Disclosure

The federal government disclosure requirements specify that real estate licensees, property management companies, sellers, and landlords must disclose known lead paint hazards for homes built prior to 1978. A summary of EPA and HUD regulations follows: Sellers and landlords must:Disclose any known lead-based paint hazards along with information such as the location of the hazards and the condition of painted surfaces.Give buyers and tenants any reports available from prior lead tests.Give buyers and renters the EPA-approved information pamphlet titled Protect Your Family from Lead in Your Home.Include certain language in sales contracts and leasing agreements to ensure that disclosure and notification actually take place. This language must include a Lead Warning Statement and confirm that the seller or landlord has complied with all notification requirements. This is included in most standard real estate contracts. Homebuyers have a 10-day period (or other mutually agreed on time) to conduct a lead paint inspection or risk assessment at their own expense.Parties may mutually agree in writing to lengthen or shorten the inspection period.Buyers may waive this inspection opportunity. The EPA is responsible for enforcement of the disclosure rule.Violations are prohibited acts under federal law.Any person who is in violation will be liable subject to a civil penalty.

Estelle is buying a home that was built before 1978. Federal law requires that agent Brian ensure she is given what? Select all correct responses. A. written disclosure of any known lead-based paint hazard B. a due diligence period to obtain a risk assessment or inspection C. the EPA pamphlet, Protect Your Family From Lead in Your Home D. a risk assessment at the seller's expense if the house was built prior to 1978

The first three, A, B, C

Asbestos Health Risks

The risk of mesothelioma (an aggressive form of cancer), asbestosis (permanent scarring in the lungs), or lung cancer increases in direct proportion to the number of fibers inhaled, with symptoms typically not appearing until 20-30 years after first exposure. Worsening cough, shortness of breath or wheezing Coughing up blood Swelling of the neck or face Chest pain or tightening sensation in the chest Weight loss or loss of appetite Difficulty swallowing Fatigue and/or anemia

Lead Dust Standards from EPA and HUD

on June 21, 2019, EPA announced new, tighter standards for lead in dust on floors and windowsillsto protect children from the harmful effects of lead exposure. The rule went into effect on January 6, 2020. To protect children's health and to continue making progress on this important issue, EPA is lowering the dust-lead hazard standards from: 40 µg/ft2 (micrograms of lead per square foot) to 10 µg/ft2 on floors. 250 µg/ft2 to 100 µg/ft2 on windowsills. The more protective dust-lead hazard standards will apply to inspections, risk assessments, and abatementactivities across the country in: Pre-1978 housing Certain schools, childcare facilities, and hospitals

real estate licensees in North Carolina are (regarding the environmental factors)

required by statute to disclose material facts to everyone in a transaction and may be subject to disciplinary action for either misrepresenting or failing to disclose a material fact. Recall that a material fact is an important fact that may affect someone's decision about a property. Sellers, also, must disclose environmental hazards with the Residential Property and Owners' Association Disclosure Statement—which must be provided to prospective buyers and tenants—through the following question: Are there any hazardous or toxic substances, materials, or products (such as asbestos, formaldehyde, radon gas, methane gas, lead-based paint) which exceed government safety standards, any debris (whether buried or covered) or underground storage tanks, or any environmentally hazardous conditions (such as contaminated soil or water, or other environmental contamination) which affect the property? Brokers should always refer clients to professionals for more information about these hazards, but brokers need to know enough about these hazards to alert clients to the potential for danger.

Lead Health Risks

the greatest risk is to children and unborn babies. Infants and children are especially vulnerable to lead paint exposure because: Their growing bodies absorb more lead than adults do Their brains and nervous systems are more sensitive to the damaging effects of lead They may experience irreversible and life-long health effects. Pregnant women and their unborn babies are also at great risk because lead can pass from a mother to her unborn baby. Risks to the baby include: Miscarriage Being born prematurely or underweight Damage the brain, kidneys, and nervous system Learning or behavior problems.

Asbestos: Friable vs. Nonfriable

the mere presence of asbestos does not present a hazard; however, asbestos materials become dangerous when damaged and the fibers are released. The fibers are easily crumbled and can become powdery when handled, known as friable, and can then become airborne. As asbestos particles are inhaled, they can become trapped in lung tissue or the digestive tract. Over time, the accumulation causes inflammation and scarring. This, in turn, can lead to a variety of breathing problems and an increased risk for developing many different illnesses, including cancer. Nonfriable means that if normal contact is made with products containing asbestos, the asbestos will not become airborne. However, if repairs are being done, the asbestos in these products could become friable. For this reason, products containing asbestos are often left undisturbed.

Property Owner Liability for USTs

the statutory tank owner is responsible for any required cleanup of contamination. Who the "statutory tank owner" is depends upon when the tank was last used. If it was last used before November 8, 1984, then the last party who used that UST is considered the tank owner (even if that party no longer owns the property.) However, if that tank was used on or after November 8, 1984, anyone that owned the tank would be considered the tank owner even if that person never used it.