© 2012 Environmental Data Resources, Inc.
EDR Client Summit
Scottsdale, AZ
May 16, 2012
Land Contamination and Residential Properties
About 80% of Single Family UK homes get some
form of environmental (land contamination)
screening as part of the home buying process.
Interesting Fact…
Source:
Landmark LTD
• Following Warning Card solicitors began to order
environmental reports for commercial and residential property
transactions
• Homecheck £40, Envirosearch £46, Prime £100
Environmental Desktop reports
Page 4
Drivers for desktop reports
If no desktop report carried out then buyer exposed to significant
financial liability
Solicitor exposed to negligence claim
Number of cases where alleged negligence of solicitor but settled
out of court
Federal Gov’t
State Gov’tCT
KEY ISSUES• Coal Ash
• Vapor Int.
• Fracking
• Pipeline
• Flood
• Lawsuits
Real Estate Agents
Brokerages
Data Companies• CoreLogic
• DataQuick
• DataVerify
• LPS
LendersBank of America
Zillow
Redfin
Trulia
Residential
Homeowners /
Consumers
EIR.com
PropertFacts
HomeFacts
NHD Companies
MLS
Associations
Home Inspectors
Appraisers• UADataset
• Software
Fannie / Freddie / HUDVEROS (appraisal dataset)
Mortgage Bankers
Association
Escrow/
Title
ERCRelocation
Companies
EPs
Attorneys
RESIDENTIAL
ECOSYSTEM
• ~ 2001 – EDR’s sister company in the UK drawn into
conversation with solicitors regarding mitigating liability as they
were/are the concierge of the transaction
• Circa 2006 EDR introduces two products
Neighborhood Environmental Report™
NHD Environmental Report™ (California and Arizona)
• 2008 creates a “Green Certified” offering
• 2010 explore “Opinion Product”
• 2011 author a guidance document for Rez Phase Is
• 2011 TV show and www.environmentalissuesreport.com
• 2012 conversations with Banks, Attorneys, Appraisers…
EDR and Residential
Page 6
National Property Environmental Records
9
Sites Across U.S.
• 23 million records of property
contamination since 1990
• Includes:
- Superfund sites
- Brown fields
- Old gas stations
- Landfills
- Meth labs
- Spills
- State hazardous waste sites
- And more . . . .
…85% of residential properties will have a record within ½
mile (and that downplays the findings from historical
sources that have proven to be equally important)
Probably no surprise to you that….
Page 11
• Groundwater contamination
• Soil contamination
• Vapor intrusion
Three Core Land Contamination Issues
Page 12
• Human Health
• Business Risk
• Liability
• Property Value
The Effects
Historical information also important to the process of
determining if there might be a risk at a given property
Toxic Site Data Ain’t Enough….
and Data Ain’t Easy…
Challenging to interpret given data intersection with local geology,
groundwater and cleanup regulations
• Type of Record (permit vs. spill)
• Distance to Property
• Type of Pollutant (Oil, Gas, Solvent)
• Amount of Pollutant (5 gallons, 5000 gallons)
• Amount of Cleanup/Residual Contamination
• Type of Soil (Clay, Sand)
• Depth to Groundwater (10 feet, 100 feet)
• Direction of Groundwater Flow (toward or away)
• Private vs. Municipal well
Factors that determine actual risk
14
• Offering to Brokers to add to listings
• Value added selling tool
• Problems…
• What do you do about those that do not certify
• What does the seal really mean?
Green Certified
Page 16
• Title I, Section 101 (35) (13) (v) – (Definitions)
SITE INSPECTION AND TITLE SEARCH. – In the case of property for
residential use or other similar use purchased by a nongovernmental or
noncommercial entity, a facility inspection and title search that reveal no
basis for further investigation shall be considered to satisfy the requirements
of this subparagraph.
• Title I, Section 101 (40)(B)(iii) – (Bona Fide Prospective
Purchaser – Inquiries)
RESIDENTIAL USE. – In the case of property in residential or other similar
use at the time of purchase by a nongovernmental or noncommercial entity,
a facility inspection and title search that reveal no basis for further
investigation shall be considered to satisfy the requirements of this
subparagraph.
CERCLA
Page 17
Freddie Mac Single Family/Single-Family Seller/Servicer Guide
Page 19
The appraiser must consider any known Contaminated Sites or
Hazardous Substances that affect the property or the neighborhood in
which the property is located. The appraiser must also note the presence
of Contaminated Sites or Hazardous Substances in the appraisal report,
make appropriate adjustments to reflect any impact on market value and
comment on the effect they have on the marketability of the subject
property.
[Examples offered include but are not limited to:]
• Proximity of the property and/or its neighborhood to a Contaminated
Site
• Proximity of the property to ground water contamination, chemical or
petroleum spills or other Hazardous Substances that are expected to
impact the area for more than one year
• Environmental issues can prove to be a
liability for brokers even if they are unaware
the contamination exists!
• Cited lawsuits• Strawn v. Canuso, 140 N.J. 43 Weichert Realtors
• Venezia v. Coldwell Banker Sammis Realty, 270 A.D.2d 480
• Chase v. Coldwell Banker Residential, WL 34685236
• Vastrano v. Killington Valley Real Estate, 996 A.2d 170
• Welch v. Bueler, et.al, 481 N.W.2d 856
• Haberstick v. Gordon A. Gundaker Real Estate, 921 S.W. 2d 104
• Grube v. Daun, 496 N.W. 2d 106
• Bloor v. Fritz, 143 Wash.App. 718
• Alfieri v. Bertorelli, Case No. 07-056919-CH
Liability to Brokers
Published January 14, 2012
NJ Supreme Court:
Relevant Everywhere
21
Well
Contaminated Well Water
Rural/Suburban Homes
Vapor Intrusion
Suburban/Urban Homes
It is not a problem as I’m on municipal water (vapor intrusion)
It’s not a problem in rural areas (landfills, historic operations)
• About 20 major companies
• About 225K relocations per year
• Major impact in adoption of radon and home inspections
Relocation Companies
Page 23
• 85% of residential properties will have an environmental record
within ½ mile
• Homeowners in every state can be and are affected by
environmental contamination
• Information is not widely known and falls outside the purview of
typical disclosure forms
• Brokerages can be sued for land contamination issues
• Historical data also important for determining risk
• Lenders are faced with historically high levels of REO property
• Issues are contaminated soil, drinking/irrigation water and growing
concern around vapor intrusion
• Data alone is not enough – typically requires a professional opinion
A few concepts
Page 24
I’d have to feel good that my brother or
sister buying a house were getting
value from the product.
Sibling Test
Page 25
• Screening
• Disclosure
• Professional Opinions
Three Utilities Depending on Use
Page 26
PROJ_NAME PROP_ADDR PROP_CITY ZIP STATE TOXICHECK
7861430 15481 SW 50 LANE MIAMI 33185 FL LOW
11878221 5362 MIDDLEBURY RD DAYTON 45432 OH LOW
11879317 1087 HOLLY HILL DR COLUMBUS 43228 OH LOW
340291426 16101 PLUM CREEK TRL LOUISVILLE 40299 KY LOW
390719649 3223 HONEYSUCKLE DR ANN ARBOR 48103 MI LOW
632315255 57 MECHANICS AVE EWING 08638 NJ HIGH
663417640 1006 ROLLING MEADOWS DRIVEAKRON 44333 OH LOW
697227577 3287 E DUGDALE ROAD ASHTON 61006 IL LOW
700081870 146-50 W. QUEEN LANE PHILADELPHIA 19144 PA HIGH
700900285 1342 JONES ST RENO 89503 NV LOW
730211299 16-2087 MOHO ROAD MOUNTAIN VIEW 96771 HI LOW
• Screening
• Disclosure
• Professional Opinions
Three Utilities Depending on Use
Page 27
The
Neighborhood
Environmental
Report™
• Screening
• Disclosure
• Professional Opinions Written by qualified Environmental
Professionals (EPs) with local knowledge and 2-3 day TAT.
Three Utilities Depending on Use
Page 28
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