CERCLA

In 1980 the federal government adopted into law the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This law’s purpose is to identify sites of environmental pollution and provide funds for cleanup. The act calls for the identification of people and/or businesses responsible or potentially responsible parties (PRP) for the creation of uncontrolled hazardous waste sites or hazardous waste spills. The act also created a $9 billion fund called the Superfund to pay for the cleanup of identified hazardous waste sites.

The act considers liability for such a site and its cleanup to be strict. Strict liability means that the property owner has no excuse with respect to his liability. The act also considers the liability to be joint and several, which means that if more than one person is responsible for the hazardous waste site, the law is enforceable on the group as well as on each individual. In fact, if, for example, one of two people had no funds available for cleanup, the other party could be held responsible for the total cost. The second party would have to try and get payment from the other person through a lawsuit.

Under CERCLA, a current landowner can be held liable for the cost of cleaning up a hazardous waste site even when he or she didn’t create it. The current owner can then try to obtain reimbursement from the people who originally created the site or from the Superfund itself. The term retroactive liability also is used in connection with CERCLA and the Superfund. It means that previous owners also can be held accountable for the hazardous waste site.

EPA

The Environmental Protection Agency (EPA) is the federal agency responsible for dealing with environmental issues. The agency advises Congress and the president regarding laws to protect the environment. The agency writes regulations implementing laws that have been passed, and the agency enforces all federal environmental rules and regulations. The EPA administers, among other laws, the Clean Water Act, the Toxic Substance Control Act, and the Resource Conservation and Recovery Act.

HMTA

The important thing to remember for the exam here: The Hazardous Material Transportation Act (HMTA) is enforced by the United States Department of Transportation.

HUD

The United States Department of Housing and Urban Development (HUD) isn’t a major player in the federal regulation of environmental issues. However, I mention it because the agency is relevant when concerned with lead paint disclosure, which I discuss in the “Lead” section later in this chapter.

LUST (It’s not what you think)

The Leaking Underground Storage Tanks (LUST) program, sometimes referred to as the UST or Underground Storage Tank program, was created in 1984 as part of the Resource Conservation and Recovery Act administered by the EPA.

This program targets underground storage tanks used for the storage of hazardous substances such as chemicals or oil-based products like motor fuel. Such tanks must be registered with the EPA. There are a number of exceptions to the underground storage tank program, including tanks with a storage capacity of less than 110 gallons; tanks used for heating oil used on the property; and motor fuel storage tanks of less than 1,100 gallons on farms and residential properties. The program regulates such areas as tank installation and maintenance as well as spill prevention and monitoring.

Individual states may have programs that supplement the federal underground storage tank program. Check out your state law to find out whether this issue is something that you need to know for your state test. Generally the state law may provide for additional registration of tanks, different minimum size tanks that have to be registered, and possibly different technical requirements.

OSHA

The Occupational Safety and Health Administration (OSHA), which is part of the United States Department of Labor, is responsible for providing and monitoring regulations regarding worker safety particularly in factories.

SARA

The Superfund Amendments and Reauthorization Act of 1986 (SARA) was passed when the original act, CERCLA, expired in 1985. (See the earlier section on CERCLA for more.) The three essential functions SARA performs are

• Providing increased funding to the Superfund for environmental cleanup.
• Creating stronger standards for cleanup of hazardous waste.

• Creating something called innocent landowner immunity.

  Where a property owner has been innocent of all involvement with a hazardous waste site, under certain circumstances, she may claim immunity from responsibility. In addition to having no involvement or knowledge of the situation, the property owner must have taken what is sometimes called due care or due diligence in having the property investigated for potential environmental contamination. This investigation usually takes the form of an environmental assessment. (For more on environmental assessments, see “Having suspicions: Environmental assessments,” later in this chapter.) Before the innocent landowner immunity status was created, the current owner, regardless of guilt, could be held liable by the EPA to pay for cleanup of a hazardous waste site and then would have to seek reimbursement from a previous owner. SARA’s immunity status can relieve a current innocent owner of this liability.

SDWA

The Safe Drinking Water Act (SDWA) established standards for the testing and quality of public water supplies. It requires that the public be notified if the drinking water contains contaminants above acceptable levels.

Making a statement: Environmental impact statements

Laws governing the examination of the environmental impacts of a proposed project vary from state to state. If environmental issues are part of your state exam, check out the particular rules and regulations that govern the review or impact study of environmental issues with respect to a proposed development project.

An environmental impact statement or study (they may be called something else in your state) examines the environmental impact a development project may have on the environment. Depending on the state requirements, such a statement may look at everything from the number of cars that will be put on the road to the animal life that will be disturbed. The study reviews both the impact of the project when it’s completed and the impact it may have while it’s being built.

An environmental impact statement or study sometimes requires that alternatives be presented and examined. For example, a developer may be required to examine various access roads into a new subdivision and then explain why the one selected is best. The study also usually requires a discussion of mitigation measures. Mitigation measures are those things that might be done to minimize or eliminate the environmental impact of the project. For example, a developer expects the shopping center he’s building to generate a great deal of car traffic (car traffic equals air pollution). He may agree to provide room at the shopping center for a bus stop to encourage people to take public transportation, thus reducing the number of cars used.

Experts in environmental matters prepare these statements or studies. The public and key agencies may be invited to comment on the study. These studies can be expensive and time-consuming depending on the project’s complexity.

Having suspicions: Environmental assessments

When someone involved in a real estate transaction suspects the presence of hazardous material on a piece of property, environmental engineers or scientists may be hired to perform an environmental assessment. An environmental assessment has four possible phases:

• Phase 1: A Phase 1 environmental assessment is primarily a review of the records regarding the property in question. The records that are reviewed focus on any environmental complaints, violations, special permits, or other documentation that may indicate the current or previous presence of environmentally hazardous material. This phase also includes a visual inspection of the property. Phase 1 environmental assessments are commonly done before someone purchases an industrial or commercial property and are often required by mortgage lenders before approving a loan.
• Phase 2: A Phase 2 environmental assessment involves actually testing and sampling to confirm the presence of any environmentally hazardous material or contamination.
• Phase 3: A Phase 3 environmental assessment is done after the confirmation of contamination on the property. The Phase 3 assessment examines the extent of the hazard and develops a plan to remedy the condition. Remediation is done as a result of this phase and may include removal of the contaminated material and restoration of the property.
• Phase 4: A Phase 4 environmental assessment is the development of a management plan for the contaminated site. Sometimes the contamination may be too large or extensive to be removed, and Phase 4 establishes a specific management plan to contain and manage the site so as to not affect surrounding properties.

Asbestos

Asbestos is a mineral that has been widely used in residential and commercial construction. Because of its resistance to the transfer of heat and its resistance to fire, builders have used it as insulation for pipes and heating ducts, roofing, siding, and flooring materials. The basic issue that exists with asbestos is related to its friability. Friable means the tendency to break down and give off dust and fibers that can be highly dangerous if inhaled. Exposure to asbestos fibers and dust can cause diseases that include lung cancer; asbestosis, a sometimes-fatal disease that makes breathing difficult; and mesothelioma, a cancer of the lining of the lungs.

In general, you can deal with asbestos in a building in three ways.

• Leave it alone. Leaving it alone may be appropriate if the asbestos is in good shape and doesn’t appear to be disintegrating or deteriorating in such a way that fibers and dust are escaping into the air.
• Remove it. Removing it should be done only in accordance with experts who follow procedures established by the EPA and/or your state.
• Deal with it. Dealing with asbestos is called encapsulation. Encapsulation is sealing the asbestos in place. Doing so prevents dust and fibers from getting into the air. Make sure that appropriate professionals do all evaluations and work in dealing with asbestos or removing it.

Brownfields

Brownfields are former industrial, factory, manufacturing, or storage sites that may have environmentally hazardous waste on or under them from their previous use. Federal legislation was passed in 2002 to help communities with the cost of cleaning up these areas. This legislation also protects owners of property from liability for hazardous wastes that were put there by a previous owner.

Building-related illness

Building-related illness, sometimes referred to as BRI, is a general term to describe various health issues related to the indoor air quality of buildings. The symptoms, which may include a variety of allergic reactions and respiratory illnesses, are present both while people are in the building and continue after they leave the building. The cause of BRI is related to chemical emissions from materials like paints and glues used in the building, as well as bacteria and dust in the air.

Electromagnetic fields

Electromagnetic fields are generated by so-called high-tension power lines and by power transfer or distribution stations and home appliances. Some research indicates that these electromagnetic fields can cause cancer as well as changes in behavior and hormone levels. This research is apparently somewhat controversial with other research indicating no health hazards. Real estate agents should familiarize themselves with the locations of the types of facilities that could generate electromagnetic fields so as to be able to advise property buyers of their presence.

Lead

Researchers recognized lead as a health hazard a number of years ago. It’s particularly dangerous to children, negatively impacting mental and physical development. Lead particles can enter a person’s system if he breathes lead dust in the air, drinks from a water supply that runs through lead pipes or copper tubing joined with lead solder, or actually eats lead-based paint flakes, as may happen with small children.

In 1992 the U.S. government passed the Lead-Based Paint Hazard Reduction Act, which requires that homeowners in homes built before 1978 fill out a lead paint disclosure form and give it to a buyer when they sign a sales contract. This form triggers a ten-day period of time during which the buyer can have the property tested for lead. This testing isn’t mandatory but at the buyer’s option.

The testing, done by appropriate professionals, can be done in two ways:

• A paint inspection can be performed, which indicates the amount of lead present in all painted surfaces.
• A risk assessment also can be performed, which goes further than the paint inspection. The risk assessment actually examines sources of lead paint risk such as peeling paint and suggests how to remedy it.

If the buyer decides to have the inspection done and a lead paint hazard is found, the seller has the option of correcting it or not. If the seller refuses, the buyer has the option of getting out of the deal and getting all his earnest (deposit) money back.

In addition to the disclosure form that the seller must complete, she must also provide a lead paint information booklet produced by HUD and the EPA (see “Deciphering the Federal Government Alphabet Soup,” earlier in this chapter for more about these government agencies), as well as the United States Consumer Product Safety Commission. The disclosure rules also apply to the landlord’s obligation to reveal to the tenant any known lead paint hazard. A real estate agent’s responsibility with respect to lead paint disclosure is to advise the seller about his obligations to disclose possible lead paint hazards. An agent representing a buyer advises the buyer of the fact that he should receive the lead paint disclosure.

Check whether your local state or municipality has any laws regarding lead paint hazard disclosure that supplement the federal regulations.

Radon

Radon is an odorless, colorless, tasteless, radioactive gas produced by the decay of natural materials such as rocks that are radioactive. It tends to accumulate in areas with poor outside air circulation such as basements. It may spread through a building by heating and air-conditioning systems, and it’s believed to cause lung cancer. Tests can be done for radon, and a real estate agent representing a buyer may recommend that the buyer have the test performed before buying the property.

Professionals like private building inspectors can perform the test; do-it-yourself kits also are available for homeowners. If radon is found, the remedy generally is to introduce some kind of ventilation into the enclosed space to remove the gas. Although no safe levels of radon have been determined, the EPA recommends action to mitigate the gas be taken if a level of four picocuries per liter of air is found when tested.

Sick building syndrome

Sick building syndrome, sometimes called SBS, refers to symptoms that people sometimes experience when inside a building for a period of time, but which end when the person leaves the building. (Some people may call that BBS, also known as Bad Boss Syndrome.) The symptoms may include itchiness, breathing difficulty, dizziness, and runny nose.

The cause of SBS is believed to be poor indoor air quality as a result of chemical emissions from materials such as paints and glues used in the building, as well as bacteria and dust in the air.

Solid waste (radioactive and otherwise)

Various parts of the United States have radioactive waste sites. These sites store used fuel from nuclear power plants. The principal issue for real estate agents is to be aware of where these sites are located. People are generally aware of the potential health hazards associated with a leak of radioactive material and may choose not to live near such a site. Or if they do buy a home near a radioactive storage facility, they may expect to pay less than if the facility weren’t there.

The storage of solid waste (I’m old enough to remember when it was called garbage) is more widespread. Landfills, which are areas that are excavated, filled with solid waste, and then covered, are located in many parts of the country. The environmental issue is primarily leakage from the landfill into nearby properties, as well as into nearby lakes, streams, and, wells. Older landfills, in particular, may cause problems because they may not have been constructed according to modern standards with appropriate liners, covering, and drainage control. Federal, state, and local governmental agencies all may be involved in monitoring landfills to prevent contamination of nearby properties and water bodies.

Underground tanks

Underground storage tanks range in size from relatively small tanks of a few hundred gallons for home heating oil to large tanks of thousands of gallons for industrial and agricultural gasoline, oil storage, and chemical storage. The issue for real estate, of course, is leakage from the tank into the ground and then into wells or nearby water supply systems of recreational streams and lakes.

In addition to the danger posed by tanks that are in current use, the issue of tank abandonment is significant. Usually local government agencies establish proper procedures for abandoning a tank. One of the most important ones is pumping out the material in the tank so that nothing is left to leak out. The tanks are then generally filled with material like sand.

To read more about the federal Leaking Underground Storage Tank (LUST) program, check out “LUST (It’s not what you think),” earlier in this chapter. Make sure you check to see whether your home state has any local programs that deal with tank registration, monitoring, or abandonment. As a real estate agent, you want to know about these specific procedures because they may affect your buyer or seller. If appropriate, you would need copies of the proper paperwork for your buyer, showing that the tanks were abandoned properly.

A few more quick definitions to keep in mind

Exam writers may expect you to know at least a little about the following issues, such as definitions and brief explanations. So that’s what I’m giving you.

• Carbon monoxide: This is a potentially deadly gas that occurs naturally in the burning of gas, oil, or other fuels. It can be lethal in the case of a faulty furnace or oil burner and where there is improper ventilation. Carbon monoxide detectors are mandatory in some building codes.
• Chlorofluorocarbons: CFCs, as they are more commonly known, are gases that were once used in aerosol cans and in the freon of older air conditioners. CFCs are thought to be responsible for the depletion of the ozone layer around the earth. The Federal Clean Air Act banned their use. Replacing an older central air conditioning system often involves replacing equipment to handle the newer, less-environmentally hazardous gases.
• Mold: This is usually caused by the presence of moisture. It can be present virtually anywhere in a building and can cause allergic reactions and respiratory problems.
• Urea formaldehyde: This substance was used to create urea-formaldehyde foam insulation (UFFI), which the Consumer Product Safety Commission banned in 1982. Because of insufficient proof of adverse health risks associated with UFFI, the ban was changed to a warning. Gases related to UFFI are thought to cause respiratory problems and skin and eye irritations.

Water pollution

The term domestic water is used to describe the water you drink, cook with, and take a shower in. Domestic water comes from groundwater sources, which can be either reservoirs or underground water supplies, sometimes called aquifers. Groundwater supplies are subject to pollution from many sources ranging from the chemicals you put on your lawn to the oil on the highways.

In some places water is supplied to homes and businesses through the local government, a public water supply agency or commission, or a privately owned water supply company. The system of supply is generally from a reservoir or series of wells through a system of pipes to your home or business. Sometimes, in between the supply and the distribution pipes, the water may be treated or filtered in some way. The Federal Safe Drinking Water Act requires that public water supply systems be tested regularly.

Those people who aren’t served by a public or private water supply system get their water from individual on-site water supply systems called wells. Wells may (and sometimes are required to) be tested for the presence of pollutants and for adequacy of supply.

Check your local state regulations regarding mandatory testing of wells. Many places require wells to be tested for pollution and adequate pressure when a new well is drilled and when the property is sold. Testing may be optional after that. Also find out what agency reviews the test results. Local health departments or environmental departments are typically the review agencies.

Sanitary waste disposal

Sanitary waste is what goes out the drain pipe of your house from the sinks, showers, toilets, and washing machines. Of course, it’s not sanitary but must be treated in a sanitary manner to prevent pollution and illness.

Ideally when you flush, it becomes someone else’s problem. The waste from your house travels through sewer pipes and eventually is treated at a sewage treatment plant, usually operated by the city, town, or county. If you live in a large residential complex or work in an office building that has no sewers, a small, nearby treatment plant may service your building or housing complex.

In many areas, sewage disposal is handled by individual on-site disposal systems called septic systems. In this case when you flush, it’s still your problem because septic systems have to be maintained by periodically pumping them. The septic tank is one of two parts of a septic system. The other part is the leach fields, which are also called absorption fields or septic fields. The size of a septic system can vary and is generally sized according to the number of bedrooms in a house. The location of the leach fields as well as even the feasibility of using a septic system is determined by the capacity of the soil to absorb what is called leachate. Leachate is the liquid stuff that comes out of the septic tank after all the solids have settled to the bottom of the tank. The capacity of the soil to absorb leachate is tested by doing a percolation or perc test. Where there are wells and septic systems in the same area or on the same property, local authorities establish minimum distances that have to be maintained between the septic system and the well.

Storm water disposal

Storm water is rainwater that comes down into the streets that must be disposed of to avoid flooding of streets and houses. Generally storm drains in the streets that lead to storm sewers dispose the storm water and take it directly to lakes, rivers, or the ocean.

1. A source of money to clean up major environmentally polluted properties was originally created by

(A) CERCLA.

(B) EPA.

(C) LUST.

(D) SARA.

Correct answer: (A). The trick is the word originally. SARA reauthorized the Superfund.

2. Immunity for a landowner innocent of creating the pollution on his property was created by

(A) CERCLA.

(B) OSHA.

(C) SARA.

(D) EPA.

Correct answer: (C). Innocent landowner immunity didn’t exist in the original CERCLA legislation.

3. Immunity for a landowner innocent of creating pollution on his property will most likely be dependent on

(A) the type of pollution.

(B) how long ago the pollution happened.

(C) his due diligence in investigating the property.

(D) how much money he has.

Correct answer: (C). Due diligence is a key requirement of innocent landowner immunity. The landowner must have done some investigation to protect himself.

4. A review of records regarding environmental problems on a property would be part of

(A) a Phase 1 environmental assessment.

(B) a Phase 2 environmental assessment.

(C) a Phase 3 environmental assessment.

(D) a Phase 4 environmental assessment.

Correct answer: (A). Review “Having suspicions: Environmental assessments,” earlier in this chapter and make sure that you can clearly identify what occurs in each phase.

5. A management plan for an environmentally polluted site would be developed in which phase environmental assessment?

(A) 1

(B) 2

(C) 3

(D) 4

Correct answer: (D). You need to be able to identify the four phases and what occurs in each phase. (Check out “Having suspicions: Environmental assessments,” earlier in this chapter for the scoop.)

6. Friability is a term associated with

(A) BRI.

(B) SBS.

(C) electromagnetic fields.

(D) asbestos.

Correct answer: (D). Friability is the tendency of asbestos to break down and give off dust and fibers that can be highly dangerous if inhaled. This question is a good example of how you have to remember information about various environmental hazards. For each one, you need to remember what it is, how and where it appears, associated key words (like friability and asbestos), illnesses it may cause, ways to handle it, and so on.

7. You get sick at work and the symptoms persist when you get home. You may be suffering from

(A) BRI.

(B) SBS.

(C) EPA.

(D) OSHA.

Correct answer: (A). The symptoms of building-related illness are present both while people are in a building and continue after they leave the building. The symptoms of sick building syndrome (SBS) end when people leave the building.

8. The size of a residential septic system is usually based on

(A) square footage.

(B) number of occupants.

(C) number of bathrooms.

(D) number of bedrooms.

Correct answer: (D). This can be a tricky question because square footage or the number of occupants seems logical. But the number of bedrooms it is. Check out the section “Sanitary waste disposal” earlier in this chapter if you need to refresh your memory.

9. Odorless, colorless, radioactive gas best describes

(A) carbon monoxide.

(B) carbon dioxide.

(C) radon.

(D) methane.

Correct answer: (C). All of the answers are gases, but only one is radioactive: radon.

10. The test done to locate where to place a septic system is called

(A) a depth test.

(B) a soils test.

(C) a percolation test.

(D) an absorption analysis.

Correct answer: (C). This is another one of those memorization questions; the term “percolation” is unique to septic system testing (and making coffee, in the world outside of real estate).