Why Buyers and Sellers Benefit From Ordering an Environmental Hazard Disclosure Report

Houses flooded.
Houses flooded. | Source

Disclaimer

The author is a California state REALTOR®. All information contained in this publication is deemed reliable for the state of California. Please verify with your state or region for accuracy and applicability.

Sellers Must Disclose Known Hazards

Sellers, you may have lived in your neighborhood for decades and never experienced a flood, yet three months after you sell your house, the first winter of the season produces a storm so massive that the house floods. The buyers, standing in a foot of water are enraged. They have become disillusioned and feel like you lied to them, or at the very least, withheld information from them regarding the fact that the house is in a flood zone area.

The buyers are now calling an attorney and naming the real estate agents and you in a lawsuit for not disclosing that the house is in a flood zone area. Are you, the seller, at fault?

In California, sellers are required to disclose the presence of any known environmental hazard. But, sometimes the seller may be unaware of such hazards and when asked about hazards, can simply state, “Unknown.” Buyers are then left vulnerable to conditions that may be harmful to their health or safety.

Sellers, you may not be held entirely at fault if you are truly unaware of hazards in and around your property, but if you suspect anything at all, it is critical to inform buyers of potentially harmful conditions. It is best to order a Natural Hazard Disclosure Report to protect yourself from the effects of future accusations of a disgruntled buyer.

For example, let’s say that in Contra Costa County, the seller generally pays for the report. And, in Alameda County, the buyer generally pays for the report. Who actually pays, of course can be negotiated.

Buyers Must Be Prudent About Potential Hazards

Buyers, it is critical to know if the property you want to buy is in a natural hazard area. The report is called the Natural Hazard Disclosure Report. Who pays for this report? Either the buyer or seller can pay for the report. However, when negotiating the purchase agreement, the party who pays for the report is usually determined by general practices for the property’s county or region.

The Natural Hazard Disclosure Report

The Natural Hazard Disclosure Report is a professionally prepared report that itemizes specific hazards and notes whether or not the property is affected by the hazard.

Here are the most common environmental hazards and what you should know about them.

Note: Website links, addresses, and phone numbers were correct as of the date of this publication.

  • Asbestos – Asbestos is a fibrous silicate mineral that is commonly used for insulation and fire protection. In 1989, the U.S. Environmental Protection Agency began banning asbestos products, however, depending on the age of the home you purchase, there may still be asbestos in the vinyl flooring, air conditioning, insulation for the hot water tank, roofing shingles, attic, ceiling, wall, and some sheet rock taping compounds. That “cottage cheese” looking material on the ceiling could possibly contain asbestos.

    When asbestos fibers are inhaled, there is a risk of lung scarring and an increased risk of cancer. It is wise to contact a professional for removal of asbestos.

    For information on the identification and abatement of asbestos hazards in your home, and other information about asbestos visit the U.S. EPA Asbestos website at:
    www.epa.gov/asbestos
  • Carbon monoxide – Carbon Monoxide is an odorless, colorless, and tasteless gas. In high quantities, carbon monoxide is highly toxic to humans and animals.

    You can find carbon in unvented kerosene and gas space heaters, gas water heaters, improperly adjusted or maintained furnaces or boilers, wood and gas stoves and fireplaces, gasoline powered equipment, and automobile exhaust.

    Because you cannot see, smell, or feel carbon monoxide, it is known as an invisible killer. When you have been exposed to high levels of carbon monoxide, you may experience flu-like symptoms, including headache, dizziness, disorientation, nausea, and fatigue.

    There are many things you can do to safeguard yourself against carbon monoxide exposure. The best place to start is by installing carbon monoxide detectors throughout your home.

    For more information and questions and answers about carbon monoxide visit the U.S. Consumer product Safety Commission (CPSC) website at: http://www.cpsc.gov/en/Safety-Education/Safety-Education-Centers/Carbon-Monoxide-Information-Center/
  • Flood zones - Flood zones are areas that are identified as having a 1% chance of flooding in any given year. These areas are known as Special Flood Hazard Areas (SFHA).

    The best way to know if your home is in a flood zone is to visit the Federal Emergency Management Agency (FEMA) website to search for your property location:
    www.fema.gov/flood-zones

Do You Have Formaldehyde In Your Flooring?

Lumber Liquidators is a flooring company that has been reported to have sold laminate flooring containing formaldehyde. The following video suggests things you can do if you suspect that your floors contain formaldehyde. One solution is to hire an environmental engineer.

What To Do If You Suspect Formaldehyde In Your Flooring

  • Formaldehyde – Formaldehyde is a gas that is colorless, yet pungent and is water soluble. It is used in the manufacture of building materials and other consumer products.

    The Office of Environmental Health Hazard Assessment (OEHHA) conducted a study that found formaldehyde to be a carcinogen in humans. Other conditions and illnesses include irritation to the eyes, skin, and respiratory tract; coughing, sore or burning throat, nausea, and headaches. People with respiratory conditions such as asthma or allergy symptoms often have increased sensitivity to formaldehyde.

    You may find formaldehyde in many materials used for building your home. It can be found in the floors, paints, wallpaper, draperies, and gas appliances.

    To reduce your exposure to formaldehyde, start by opening windows to increase ventilation. More involved methods of removing formaldehyde include removing wood products such as flooring, bookcases, cabinets and such that are made with formaldehyde.

    For more information about formaldehyde and what you can do to reduce your exposure visit the Air Resources Board website at:
    www.arb.ca.gov/research/indoor/guidelines.htm

Personal Experience

In my early years as a REALTOR® I had a buyer client who was an investor. He knew everything… or so he thought. I remember advising him to order an Environmental Hazard Disclosure Report of the property. He opted not to get the report. He said he was familiar with the area and was not going to “…waste money on a report that would tell him what he already knew.”

A few months after escrow closed, the house began sinking and sliding downhill. Upon investigation it was discovered that the house was built upon a landfill. Who knew? Well, the seller knew. But, the seller opted not to disclose that information to anyone. Needless to say, a lawsuit was filed. Everyone involved in the transaction was named except for me. The only reason I was not named in the suit is because, I was extremely adamant about obtaining a report. The fact that the buyer acted against my advice saved me from having to go through the trial.

Since that transaction, when a buyer or seller refuses to order an Environmental Hazard Disclosure Report, I order the report and pay for the report myself. It is worth the few dollars spent for full disclosure of facts that may be unknown or that the seller may be withholding for the sake of selling the house.

  • Hazardous waste – The Environmental Protection Agency (EPA) classifies hazardous waste as, “…anything left over from a manufacturing process, chemical laboratory, or a commercial product that is dangerous and could hurt people, animals, or the environment.” Hazardous waste material must be properly managed and disposed of properly in order to keep from leaking and becoming dangerous to humans or animals.

    Hazardous waste leakage can be found in underground storage tanks, poorly contained landfills or ponds, hazardous waste spills, or illegal dumping directly on land or water.

    Your best protection against hazardous waste is to get a professional hazardous waste report issued by a registered environmental assessor. This person will investigate a known or suspected environmental hazard at the property.

    Californians can find a list of registered environmental assessors by visiting the Department of Toxic Substances Control website at:
    www.dtsc.ca.gov

  • Lead – Lead is a toxin that is mostly used in paint and gasoline. You may find lead in your walls, ceilings, floors, and even your water.

    The effects of lead exposure can be irreversible. Children exposed to lead poisoning can show signs of brain damage, mental retardation, convulsions, liver damage, kidney damage, anemia, and death. Adults exposed to lead poisoning can experience reproductive problems, high blood pressure, kidney disease, digestive problems, nerve disorders, memory loss, concentration problems, and muscle and joint pain. When pregnant women are exposed to lead poisoning, the lead can pass into the baby’s blood system and poison the baby.

    If you think you have been exposed to lead, contact your doctor for lead testing.

    In 1978 the Consumer Product Safety Commission banned paint containing high levels of lead for residential use. So, if your home was built prior to 1978, it might have lead paint. Lead can be found in the soil that comes from gasoline emissions or paint that eroded from the exterior paint. If you work at a place that uses lead, you can track lead into your home.

    To minimize the effects of lead poisoning, keep your home clean. Wash your floors and make sure your children wash their hands before mealtime and bedtime. Removing lead from your home requires hiring a lead abatement contractor who uses special processes to remove or seal lead.

    For more information about lead poisoning visit the Center for Disease Control website at:
    http://www.cdc.gov/nceh/lead/
  • Mold – Mold is everywhere! Molds grow on surfaces and release tiny, lightweight spores which travel through the air. Everyone is exposed to mold, but the only time exposure to mold becomes a danger is when we touch, eat, or inhale large quantities of the mold spores.

    Mold thrives in moisture. So, wherever there is a moisture problem, there is likely to be a mold problem. Flooding, leaky roofs, plumbing leaks, damp basement or crawl space, and steam from the bathroom, kitchen, or laundry are just some of the places known to produce mold conditions.

    Exposure to high levels of mold can produce symptoms of allergies, breathing problems, nose or sinus congestion, headaches, memory problems, mood swings, nosebleeds, body aches and pains, fevers, eye irritation, hacking cough, itchy skin, or rashes.

    Testing for mold can be very expensive. If you see mold in your home, you can do a general cleanup of the area. Be sure to wear a dust mask, safety goggles, and rubber gloves.

    For more information about mold and effective ways to clean up mold obtain a copy of the document titled, “Mold in My Home, What Do I Do?”
    http://www.cdph.ca.gov/programs/IAQ/Documents/MIMH_2012-07-05.pdf

  • Radon – Radon is a radioactive gas. It is colorless, tasteless, and odorless. Most soils contain radon which comes from the decay of uranium. Radon can seep into a home and once it is inside the home it becomes trapped. It can even seep into your water supply.

    Exposure to radon over a long period of time can lead to lung cancer.

    You must test for radon in order to know if your home has a high level of radon. If you discover that your home has a high level of radon, then the U.S. Environmental Protection Agency (EPA) and the California Department of Public Health (CDPH) recommend that you try to reduce the levels by installing a mitigation system.

    For information on purchasing radon testing kits or to find a professional to test for radon in your home, visit the CDPH website at:
    www.cdph.ca.gov/HealthInfo/environhealth/Pages/Radon.aspx

Contingency

A contingency is a condition that has to be met before the transaction can be complete.

Know the Hazards In and Around Your Home

Some hazards are invisible, odorless, or can’t be felt or heard. As a seller, you may not be aware of the hazards in and around your home. Obtaining a Natural Hazard Disclosure Report prior to selling your home may be a decision that keeps you from being sued after the sale.

Buyers, make sure that obtaining and approving a Natural Hazard Disclosure Report is a contingency to purchasing your home.

Whether the buyer or seller pays for the report, the Natural Hazard Disclosure Report should be part of every real estate transaction.

The cost of an Environmental Hazard Disclosure Report varies widely by area and the type(s) of report ordered. Consider a price range of $50.00 to $150.00.

Federal Agencies for Additional Information

U.S. Department of Housing and Urban Development (HUD)
Office of Lead Hazard Control
451 7th Street S.W., Room B133
Washington, D.C. 20410

Telephone: (202) 755-1785

Website: www.hud.gov

I recommend the HUD website as the first place to find information about hazardous conditions and just about everything else you need to know about purchasing and owing a home.

U.S. Environmental Protection Agency (U.S. EPA)
Public Information Center
1200 Pennsylvania Ave., N.W.
Washington, D.C. 20460

Telephone: (202) 272-0167

Website: www.epa.gov

The U.S. EPA is a government agency responsible for protecting the air, water, and land. The U.S. EPA makes sure laws are created for our protection and that everyone adheres to these laws.

"Real estate made easy!"

Although retired from actively selling real estate, Marlene Bertrand maintains a current Broker/REALTOR® status. Calif. Bureau of Real Estate Lic. #01056418.

© 2016 Marlene Bertrand

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Comments 14 comments

MarleneB profile image

MarleneB 10 months ago from Northern California, USA Author

Thank you, manatita44. I can imagine the expense of removing asbestos being rather high. I think, so long as you have a professional taking care of it, it is better.


manatita44 profile image

manatita44 10 months ago from london

You highlight the hazards well, Marlene. I have Asbestos in my Home. When the local authority came, they found it easier to just add tiles on tiles and covered up the whole thing. Perhaps they did not wish to spend the money on repairs. I was already there for about 15 years, and so I'm still here. Great and informative article.


MarleneB profile image

MarleneB 10 months ago from Northern California, USA Author

Thank you for your feedback, ChitrangadaSharan. It is good to have this kind of report for protection of all parties to the transaction.


ChitrangadaSharan profile image

ChitrangadaSharan 10 months ago from New Delhi, India

Great information in this hub!

A professional property disclosure report is a must and beneficial both for the buyer and the seller. We also do it here while buying and selling property. It is important to be aware of the legal aspects and implications.

I am sure people will benefit from your very informative hub on this subject.

Thank you for sharing!


MarleneB profile image

MarleneB 10 months ago from Northern California, USA Author

Hi word55! I don't think I could ever buy a gas station without a hazard report. They do come in handy and they don't cost a lot of money for the peace of mind that they offer.


word55 profile image

word55 10 months ago from Chicago

This is good info Marlene. We do environmental inspections when selling gas stations, junk yards and any properties that had storage tanks on or below ground. Have a blessed day!


MarleneB profile image

MarleneB 10 months ago from Northern California, USA Author

Thank you for your feedback, MsDora. It's basic information that most people don't need, but it is good to have it... just in case.


MsDora profile image

MsDora 10 months ago from The Caribbean

The practice of Environmental Hazard Disclosure Reporting is fair and just. Thanks for the detailed descriptions of the various hazards.


MarleneB profile image

MarleneB 10 months ago from Northern California, USA Author

Hello DDE! It is good to be back and seeing the faces of wonderful friends like you. Thank you for reading and for your feedback.


DDE profile image

DDE 10 months ago from Dubrovnik, Croatia

It has been a while Marlene! So glad you are back. Informative and well thought of hub.


MarleneB profile image

MarleneB 10 months ago from Northern California, USA Author

Thank you so much, Bill. I'm slow to return, but I hope to be able to develop a productive writing ritual. I'm not going to go all out like some people I know (wink), but I want to be consistent so I can see where I'm going.


billybuc profile image

billybuc 10 months ago from Olympia, WA

Good to see you back, Marlene! Great article. In today's world, with today's ever-changing drastic climate, this information is invaluable. Well done!


MarleneB profile image

MarleneB 10 months ago from Northern California, USA Author

Hi Eric! Thank you for your feedback. I have seen my fair share of what happens when the buyer is unaware of certain hazards regarding the condition of the home and the area around the home.


Ericdierker profile image

Ericdierker 10 months ago from Spring Valley, CA. U.S.A.

Cool. You sure are a great writer. Your handling of the liability factors is spot on -- I sure am glad I got my report done.

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