Chapter 18 Environmental Issues

I. Introduction to Environmental Issues

Environmental concerns in real estate have evolved from simple sanitation issues (like septic and well water) to complex chemical and mineral hazards. In New York, these issues are strictly regulated by the NYS Department of Environmental Conservation (NYSDEC) and the Department of Health (DOH).

• "As-Is" Caution: While a property may be sold "as-is," environmental hazards often trigger mandatory federal or state disclosure requirements that bypass standard contract language.

• Due Diligence: It is the responsibility of the licensee to suggest professional testing when an environmental "red flag" appears.

II. Long-Standing (Traditional) Issues

These are the fundamental systems familiar to most homeowners and inspectors.

1. Water Systems (Private & Municipal):

• Private Wells: Unlike municipal water, private wells are the owner's responsibility.

• Mandatory Testing: In many NY counties (e.g., Westchester), the Private Well Testing Act requires water testing upon the signing of a contract for sale.

• Common Contaminants: Bacteria (E. coli), Lead, Nitrates, and VOCs (Volatile Organic Compounds).

2. Septic Systems (Private Sewerage):

• Design: Must be designed by a professional engineer or registered architect and approved by the local Department of Health.

• "As-Built" Drawings: These are the final blueprints filed with the town showing exactly where the tank and leaching fields are located.

• The 100-Foot Rule: Typically, a septic leaching field must be at least 100 feet away from any well to prevent contamination.

3. Wood Destroying Insects (Termites/Carpenter Ants):

• Testing: Most lenders require a NPMA-33 Wood Destroying Insect Inspection Report.

• Certification: In NY, anyone applying pesticides or performing commercial inspections must be certified by the NYSDEC.

III. Contemporary Hazards

These hazards often require specialized professional remediation.

1. Asbestos:

• What it is: A naturally occurring mineral fiber used for its fire-resistant and insulating properties.

• Health Risks: When disturbed, fibers become friable (crushable to powder) and can cause Asbestosis, Lung Cancer, or Mesothelioma.

• Remediation: It is often safer to encapsulate (seal) asbestos rather than remove it, as removal releases dangerous fibers into the air.

2. Lead-Based Paint (Federal Law):

• The 1978 Rule: Under the Residential Lead-Based Paint Hazard Reduction Act, sellers of homes built before 1978 must:

1. Disclose known lead paint.

2. Provide the "Protect Your Family From Lead in Your Home" pamphlet.

3. Give buyers a 10-day period to conduct a lead inspection (which the buyer can waive).

• Lead in Water/Soil: Lead can also enter a home through old plumbing (solder) or contaminated soil near the foundation.

3. Radon:

• Nature: A colorless, odorless, radioactive gas that enters through cracks in the foundation. It is the second leading cause of lung cancer.

• Action Level: The EPA recommends remediation if levels are 4.0 picocuries per liter (pCi/L) or higher.

• Remediation: Usually involves a ventilation system (active sub-slab depressurization) to draw the gas out from under the house.

4. Polychlorinated Biphenyls (PCBs):

• Source: Historically found in electrical transformers and older fluorescent light ballasts. They are "persistent" organic pollutants.

IV. Environmental Assessments (Commercial Real Estate)

For commercial transactions, lenders require a multi-phase assessment to limit liability under CERCLA (Superfund law).

• Phase I - Investigation: No physical testing. Includes a site walkthrough, interviews, and a review of historical records (chain of title/aerial photos) to find "Recognized Environmental Conditions" (RECs).

• Phase II - Testing: Involves actual sampling of soil, groundwater, or air if Phase I found potential issues.

• Phase III - Remediation: The "Clean-up" phase where the identified contamination is removed or managed.

• Phase IV - Management: Ongoing monitoring to ensure the site remains safe.

V. Emerging Issues

• Mold: Thrives in moisture. NY law requires licensed mold assessors and licensed mold remediators to be two different, independent parties to prevent a conflict of interest.

• Underground Storage Tanks (UST): Leaking tanks can cost tens of thousands to clean up. NY law requires registration of tanks over 1,100 gallons (residential fuel oil).

• CFCs (Chlorofluorocarbons): Found in old refrigerants; they deplete the ozone layer. Handled under the Federal Clean Air Act.

⚠️ EXAM ALERT: QUICK FACTS

• The "Friable" Trap: Asbestos is only a significant health risk when it is friable (can be crumbled by hand pressure), releasing airborne fibers.

• Lead Disclosure: Real estate agents are personally liable for ensuring the seller complies with the Lead Paint Disclosure law. Fines can exceed $10,000 per violation.

• Radon Mitigation: The most common method to fix a radon problem is a vent pipe and fan that pulls gas from the soil and vents it above the roofline.

• CERCLA/Superfund: Establishes "Strict, Joint and Several Liability," meaning a current owner can be held 100% responsible for cleaning up contamination caused by a previous owner.

KEY TERMS

Asbestos: A naturally occurring mineral fiber once commonly used in construction materials for its fire-retardant and insulating properties; it is now known to be a carcinogen when its fibers are inhaled.

Asbestosis: A chronic lung disease caused by the inhalation of asbestos fibers, which leads to scarring of lung tissue and shortness of breath. 

CAA/Clean Air Act: A federal law designed to control air pollution on a national level, including the regulation of hazardous air pollutants like asbestos and lead. 

CERCLA/Comprehensive Environmental Response, Compensation and Liability Act: Also known as the Superfund, this federal law provides for the cleanup of sites contaminated with hazardous substances and holds responsible parties liable for the costs. 

Chlordane: A chemical pesticide once used to treat termites that was banned for most uses in the late 1980s due to its toxicity and environmental persistence. 

Chloro-fluorocarbons (CFCs): Chemical compounds used in refrigeration and aerosol sprays that contribute to the depletion of the earth's ozone layer. 

Due Diligence: The process of investigating a property to identify potential environmental hazards or liabilities before a real estate transaction is finalized. 

Electro-magnetic Field: Invisible areas of energy (radiation) associated with the use of electrical power and various forms of natural and man-made lighting. 

Environmental Impact Statement (EIS): A detailed written report required for major federal or state actions that significantly affect the quality of the human environment, describing the potential environmental effects of a proposed project. 

Freon: A brand name for a common type of chloro-fluorocarbon (CFC) used as a refrigerant in air conditioning and cooling systems. 

Friable: A term used to describe asbestos-containing material that can be easily crumbled, pulverized, or reduced to powder by hand pressure, allowing dangerous fibers to be released into the air.

Groundwater: Water found beneath the earth's surface in the soil or in crevices of rock, which often serves as a primary source of drinking water. 

HUD/Department of Housing and Urban Development: The federal agency responsible for national policy and programs that address housing needs, including the enforcement of lead-based paint disclosure rules. 

Lead: A heavy metal formerly used in pipes, solder, and paint; it is a neurotoxin that can cause significant health problems, especially in children, if ingested or inhaled. 

Mold: A type of fungus that grows in moist areas; while some molds are harmless, others can cause respiratory issues and allergic reactions in humans. 

Poly-chlorinated Biphenyls (PCBs): Man-made chemicals formerly used in electrical transformers and other industrial equipment; they are persistent organic pollutants known to cause cancer and other health issues. 

Radon: A naturally occurring, colorless, and odorless radioactive gas that can enter buildings through cracks in the foundation and is a leading cause of lung cancer. 

SDWA/Safe Drinking Water Act: A federal law that protects public health by regulating the nation's public drinking water supply. 

SARA/Superfund Amendments and Reauthorization Act: An amendment to CERCLA that increased the size of the Superfund and established stronger standards for cleanup and public participation. 

Underground Storage Tanks (USTs): Tanks and connected underground piping used to store regulated substances like petroleum; they pose a significant environmental risk if they leak into the soil or groundwater. 

Urea Formaldehyde Foam Insulation (UFFI): A type of insulation popular in the 1970s that was found to release formaldehyde gas, a respiratory irritant and potential carcinogen, into the air. 

Wetlands: Areas where water covers the soil or is present at or near the surface of the soil all year or for varying periods of time, which are protected by federal and state regulations.