Environmental Hazards Disclosure
Definition
Environmental hazards disclosure involves informing buyers about environmental contamination or hazards affecting or potentially affecting a property, including underground storage tanks, contaminated soil, hazardous waste, and proximity to Superfund sites.
Example
A buyer interested in a former gas station property orders a Phase I Environmental Site Assessment, which reveals the potential presence of underground storage tanks. A Phase II assessment confirms soil contamination from leaking tanks. The cleanup cost is estimated at $200,000, which significantly affects the property's value and the buyer's decision.
Exam Tip
Know that CERCLA imposes STRICT LIABILITY—the current owner can be responsible for cleanup even if they did not cause the contamination. This is the most tested environmental law on the exam. Phase I ESA = records review and site inspection (no testing). Phase II ESA = actual soil and water testing. Buyers should always investigate environmental history.
Related Disclosures Terms
Scope of Fair Housing Laws
Fair housing laws apply to a broad range of activities related to housing, including sale, rental, financing, and advertising.
Protected Classes
Protected classes are groups of people who are legally shielded from discrimination based on specific characteristics.
Consequences of Fair Housing Violations
Violating fair housing laws can lead to significant penalties, including fines, civil liability, and professional discipline.
State and Local Fair Housing Laws
Many states and localities have fair housing laws that expand upon the protections offered by the federal Fair Housing Act.
Lead-Based Paint Disclosure
The Lead-Based Paint Disclosure is a federally mandated disclosure required for all residential properties built before 1978. Sellers and landlords must disclose known lead-based paint hazards and provide the EPA pamphlet "Protect Your Family From Lead in Your Home."
Property Condition Disclosure
A property condition disclosure is a written statement by the seller detailing the known condition of the property, including defects, repairs, and issues with major systems. Most states require sellers to complete this form.
Frequently Asked Questions
Test Your Disclosures Knowledge
Practice with exam-style questions to make sure you can apply Environmental Hazards Disclosure and other disclosures concepts.