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Hazardous Substances
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What Are Hazardous Substances?
Hazardous substances is a broad term that includes a variety of chemicals, wastes, materials, and toxins. Consequently, such common businesses a d dry-cleaning plants, nurseries, and service stations pose contamination risks through their use of toxins. Contamination problems result for the following: 1. Intentional or accidental release or disposal of hazardous wastes and other toxic substances. 2. Leaks from underground storage tanks. 3. Past widespread use of asbestos in building materials (Asbestos is addressed in a separate section of this booklet). Simply, hazardous substances are those materials that can pose a short-term or long-term danger to personal health or the environment if they are not properly managed. The EPA (Environmental Protection Agency) maintains a National Priorities List (NPL) of sites that require hazardous substance cleanup action. The NPL includes on the worst sites with the highest priority for cleanup. State agencies with cleanup programs have identified may additional sites. The ability to remove hazardous substances from real estate property depends on the kinds, amounts, and sources of the wastes that are present. Generally, the removal of hazardous substances from a given area is beyond the capability of an individual property owner. If not removed, some hazardous substances can cause death - even if ingested in small amounts. Toxic wastes have been linked to elevated risks of cancer, permanent damage to internal organs, respiratory difficulties, skin rashes, birth defects, and diseases that attack the central nervous system. Toxic Contamination Liability The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, commonly known as Superfund, provided strict guidelines regarding the responsibility of past and present property owners, as well as others, for the cost of toxic-waste cleanup. Superfund empowers the EPA to compel the owner of property contaminated by hazardous substances to clean up the site. Alternatively, the EPA itself can conduct the cleanup and obtain reimbursement from the responsible parties. Amended in 1986 by the Superfund Amendments and Reimbursement Act (SARA), Superfund now exempts from liability for cleanup costs those "innocent landowners" who acquired the property without knowledge or reason to know of contamination. Landowners/Broker Liability for Hazardous Substances Toxic contamination is a major concern for landowners. The presence of hazardous materials can have a disastrous effect on property values, expose owners and operators to lawsuits for personal injuries, and require cleanup costs in excess of the property's value. Because toxic contamination may not always be apparent, purchases of property also face significant risks. Owners of contaminated property are liable for cleanup costs but can avoid this liability if they are deemed "innocent landowners." To succeed, the property owners must show that they did not know, and had no reason to know, that the hazardous substance was present on the property at the time it was acquired. The owners must also show that at the time of purchase they made "all appropriate inquiry" regarding the previous uses and ownership of the property. Appropriate inquire takes into account the purchasers' specialized knowledge and experience, commonly known or reasonably ascertainable information, and "the ability to detect such contamination by appropriate inspection." Brokers are not considered responsible parties under Superfund and other toxic cleanup legislation, but property owners who have been sued or forced to clean up property are likely to seek out others to share the expense. Brokers and agents can minimize their potential exposure to liability by maintaining high standards of professional knowledge and practice. This requires continuing education, as well as carefully formulated company policies and well-crafted documented concerning disclosure of potential contamination. As a side note, brokers and salespeople should be aware that an increasing number of lenders may be reluctant to fund loans for commercial properties for fear of liability for toxic-cleanup costs. An environmental audit before funding has become standard practice for many commercial lenders. Environmental Stigmatized Property Issues A secondary issue for brokers and salespeople is the marketing of properties that were formerly categorized as hazardous sites and are located near hazardous areas. Although toxins may have been completely abated, consumers often remain leery. Generally, these properties will need special handling information regarding the status of such hazardous areas is often available from the EPA or state and local agencies to advise both buyers and sellers. Guidelines for disclosure NAR recommends that agents aware of a problem or potential cleanup requirements on a property should report it to federal and state agencies without delay. Brokers should develop a policy for agents regarding communication with the sellers and buyers. Brokers and agents cannot be expected to be experts in discovering and explaining environmental hazards. They can and should; however, be familiar with the most common environmental hazards and proceed reasonably and cautiously in examining the properties they sell for potential hazards. The Association may serve as a resource for members, working closely with the Association counsel. The following are national resources for hazardous substance-related information. U.S. Environmental Protection Agency, Public Information Center, 75 Hawthorne Street San Francisco, CA 95105,(415)744-1500 Call ADEQ at (602) 207-4360 with Superfund questions or (602) 207-2300, with general information questions or (602) 207-2217 to reach the information center regarding hazardous substances. | ||||||||||||
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