ENVIRONMENTAL CONTROLS

In recent years, federal and state legislatures have enacted laws to conserve and protect the environment against the hazards of growth and development, particularly in terms of air, water, and soil quality.

Regional, county, and local planners must integrate environmental laws into their respective land use plans and regulations. Private property owners are responsible for complying with these laws.

Areas of concern

Air. Air quality, both indoor and outdoor, has been a matter of concern since the 1960’s. With today’s construction methods creating airtight, energy-efficient structures, attention to sources of indoor air pollution is more important than ever. Off-gassing from synthetic materials and lack of ventilation can lead to such consequences as Sick Building Syndrome (SBS) and Building-Related Illness (BRI) as well as other health problems. Among the significant threats are:

• asbestos, a powdery mineral once commonly used as a fireproof insulating material around pipes, in floor tiles and linoleum, in siding and roofing, in wallboard, joint compound, and many other applications. 
  
  When airborne, it is a health hazard. Its use today is highly restricted, and removal can be expensive and dangerous. Inspection by a certified asbestos inspector is the best way to determine whether a building needs treatment.

• carbon monoxide, a colorless, odorless, poisonous gas that may result from faulty heating equipment. Home and commercial detection devices are available.

• formaldehyde, a chemical used in building materials and in other items such as fabrics and carpeting. As it ages, formaldehyde gives off a colorless, pungent gas.
  

Its use in urea-formaldehyde foam insulation (UFFI) was banned 1982 (ban later reduced to a warning) but the material is still present in many structures. Other substances known in general as volatile organic compounds (VOCs) and used in construction materials such as adhesives emit toxic fumes. Professional testing can identify levels and, in some cases, sources of formaldehyde gas and other VOCs.

• lead, a heavy metal once widely used in paints and plumbing materials. It has been banned in paint since 1978 and in new plumbing since 1988.

It continues to be a health threat, particularly to children, as it occurs in airborne paint particles, paint chips, and soil and groundwater polluted by various external sources of emission. Inspection should be performed by licensed lead inspectors.

• mold, a fungus that grows in the presence of moisture and oxygen on virtually any kind of organic surface.

It often destroys the material it grows on and emits toxic irritants into the air. Tightly sealed structures with inadequate ventilation are most susceptible. Roof leaks, improper venting of appliances, runoff from gutters and downspouts, and flood damage are common contributors. In recent years, mold- and mildew-related lawsuits and claims have become substantial.

• radon, a colorless, odorless, radioactive gas that occurs naturally in the soil throughout the United States.

It enters buildings through foundation and floor cracks, wall seams, sump pits, and windows, among other ways. At accumulations above certain levels, it is suspected of contributing to cancer. Excessive radon can be removed by special ventilation systems. Professional and home inspections are available.

Structural damage. Wood-destroying organisms (WDO) are such an issue in Florida that WDO inspections are often required real estate transactions. Termites, certain beetles, and wood-decaying fungi fall under the category of wood-destroying organisms. Carpenter ants are not reportable as WDOs on the Florida report form. 

Building inspections do not include WDOs. Instead, the property is inspected by a pest control company inspector who is licensed by the Florida Department of Agriculture and Consumer Services. The inspection must be completed in compliance with appropriate standards and must inspect for all forms of wood-destroying organisms. 

If an inspection is performed for a real estate transaction, the report must be completed on a specific form required by Florida law, found online with instructions for its completion at https://www.fdacs.gov/content/download/3136/file/Instructions_for_13645.pdf . 

The report is limited to the day and time of the inspection and does not include any anticipation of future WDO infestations. It includes the date of the inspection, the inspector’s business name and business license number, the types and number of structures inspected, the inspection findings, any obstructions or inaccessible areas, evidence of past treatment, whether or not the structure was treated at the time of inspection and all related details, and the following statement:

“Neither the licensee nor the inspector has any financial interest in the structure(s) inspected or is associated in any way in the transaction with any party other than for inspection purposes.”

The report should also state that the inspector has no association with the structures or parties to the transaction except for inspection purposes. One copy of the report goes to the person requesting the inspection. A second copy is to be posted in an easily visible access point to the property. A third copy is to be maintained by the inspection company for at least 3 years.

Soil and water. Soil, groundwater, and drinking water supplies are vulnerable to pollution from leaking landfills; improper waste disposal; agricultural runoff; industrial dumping in waterways; highway and rail spills; industrial emissions; internal combustion emissions; and underground tanks leaking fuels and chemicals, to mention but a few sources. Some of the problems subject to controls are:

• dioxins, a family of compounds produced as a byproduct of manufacturing and incinerating materials that contain chlorine
• lead and mercury
• MTBE, Methyl Tertiary Butyl Ether, a gasoline additive
• PCB, Polychlorinated Biphenyl, a substance formerly widely used as an electrical insulation
• Underground Storage Tanks (USTs), regulated since 1984
• Wetlands, considered part of the natural water filtering system as well as special habitats, subject to restrictions on development and use.

Other ambient and natural conditions. Other regulated and controlled environmental conditions include:

• Electromagnetic Fields (EMFs) created by powerlines
• noise created by airports, air, rail and highway traffic
• earthquake and flood hazards that affect hazard insurance, lending practices, and construction requirements for buildings in designated flood and earthquake zones.

Environmental Concerns

Major legislation

National Environmental Policy Act (1969). This act created the Environmental Protection Agency (EPA) and the Council for Environmental Quality, giving them a mandate to establish environmental standards for land use planning. The act also required environmental impact surveys on large development projects.

Clean Air Amendment (1970). This act authorized the EPA to establish air quality standards for industrial land uses as well as for automobile and airplane emissions.

Water Quality Improvement Act (1970), the Water Pollution Control Act amendment (1972), the Clean Water Act Amendment (1977). These acts addressed standards to control water pollution and industrial wastes from the standpoints of future prevention as well as remediation of existing pollution.

Resource Recovery Act (1970), the Resource Conservation and Recovery Act (1976), the Comprehensive Environmental Response, Compensation and Liability Act (Superfund) (1980), the Superfund Amendment and Reauthorization Act (1986). These acts addressed disposal of solid and toxic wastes and measures for managing waste. In addition, the Superfund act provided money for hazardous waste disposal and the authority to charge cleanup costs to responsible parties.

Lead-based paint ban (1978) and Residential Lead-based Paint Hazard Reduction Act (1992, 1996). These regulations banned lead in the manufacture of paint and established disclosure requirements and guidelines for testing and remediation.

CERCLA/Superfund. Under  the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and the Superfund Amendment of 1986, current landowners as well as previous owners of a property may be held liable for environmental violations, even if “innocent” of a violation. Sellers often carry the greatest exposure, and real estate licensees may be held liable for improper disclosure.

A real property owner can be held liable for the entire cost of remediating soil, groundwater, or indoor air contamination. A tenant can be held liable for cleanup costs as an “operator” if tenant operations are linked to contamination

Responsibilities & liabilities

Licensees are expected to be aware of environmental issues and to know where to look for professional help. They are not expected to have expert knowledge of environmental law nor of physical conditions in a property. Rather, they must treat potential environmental hazards in the same way that they treat other material facts about a property: disclosure.

In sum, for their own protection, licensees should be careful to:

• be aware of potential hazards
• disclose known material facts
• distribute the HUD booklet (below)
• know where to seek professional help.

Lead. The Lead-based Paint Act of 1992 requires a seller or seller’s agent to disclose known lead problems in properties built before 1978. The licensee must give the buyer or lessee a copy of the EPA-HUD-US Consumer Product Safety Commission booklet, “Protect Your Family from Lead in your home.”

Further, the 1996 lead-based paint regulation requires sellers or lessors of almost all residential properties built before 1978 to disclose known lead-based paint hazards and provide any relevant records available. The seller is not required to test for lead but must allow the buyer a ten-day period for lead inspection. Only a licensed lead professional is permitted to deal with testing, removal or encapsulation. It is the real estate practitioner’s responsibility to ensure compliance.

Sale of  a contaminated property. Selling a property with an environmental problem does not avoid liability for the seller, although seller and buyer may agree to share or transfer some liability. As mentioned above, sellers often carry the greatest exposure for environmental violations under CERCLA, and real estate licensees may be held liable for improper disclosure.  

If there is a concern, a Phase I audit or Environmental Site Assessment (ESA) should be conducted before proceeding with the transaction. A Phase I audit identifies

• prior uses 
• presence of hazardous materials 

The Phase I ESA reviews environmental documents; conducts a title search for environmental liens and restrictions; and includes a visual inspection of the site and surrounding properties.  There is no sampling or testing.  Fannie Mae, Freddie Mac, and HUD require special Phase I ESAs on certain properties.

A Phase II audit (ESA) is conducted if a site is considered contaminated. This is a more detailed investigation using chemical analysis to uncover hazardous substances and/or petroleum hydrocarbons in samples of soil, groundwater or building materials.A Phase III audit (ESA) involves remediation. Intensive testing, sampling, monitoring, and modeling are applied to design plans for remediation, cleanup, and follow-up monitoring. Remediation may use a variety of techniques and technologies, such as excavation and removal, dredging, chemical treatment, pumping, and solidification. Major remediation efforts usually require extensive consultation with the surrounding community. Federal funding may be available.

Landmarks in Environmental Control Legislation