By Lynda Cox
When buying a house we say “buyer beware”. When selling a house we say “disclose everything”.
In this issue of the Echo we will deal with environmental issues when buying or selling real estate. Here are things to look for:
Buried oil tanks can leak and cause soil contamination. The cost to remediate can be huge. Inspectors look for unidentified holes in the basement floor.
There can be soil contamination due to homes having been built on old dumps/landfills, gas stations, dry-cleaner sites etc. The City of Ottawa can provide maps of the “brown” or contaminated areas of the city. Buyers must do their due diligence to obtain this information. Your realtor can advise.
You and your realtor must also look for evidence of water infiltration and mould. The “nose” test comes first. You can smell mildew, and where there is mildew there is often mould. Beware of finished basements that are packed to the rafters with boxes and shelving so walls can’t be closely scrutinized. Look for water marks on the drywall. Sometimes water infiltration is a result of a leaky roof or bad grading, so investigate everything. Ask for statements from sellers about past water issues, and in your offer include a warranty from the seller that there have never been any water problems. Your insurance company must check to see if any claims have been made due to water damage. Always include a condition stating that your offer is conditional upon an insurance investigation.
Radon is a relatively new concern. Most inspectors now have the ability to detect this gas. The City of Ottawa or a Google search should give the buyer help when trying to determine if the house might be exposed to radon.
Asbestos, which might be found in pipe/duct wrap, tiles, fire retardant paper, stippled ceilings and vermiculite insulation, is a big issue, especially if renovations need to be done. During the conditional period of an offer get a qualified technician to test any substance that is suspect. The test results only take a few days and the cost is minimal. There are several labs in the city that do this type of work.
The issue is whether or not the asbestos is friable with particles which can easily become airborne, or if it is contained/encapsulated. Are the edges rough or smooth? When it is contained and not disturbed there is somewhat less concern. However, some buyers simply refuse to buy a home once any asbestos is found.
We live in an “old” neighbourhood where lead may be present. Lead is usually found in older, unrenovated homes. Many streets in the city still have lead water pipes. The City of Ottawa can help you determine if water pipes on the street you want to move to have been changed to copper. Your building inspector can tell if your intake pipe to the house is copper or lead. If there are lead pipes, water can be tested and filters can be used.
Many of these issues, if present in your new home, can mean your lender will have difficulty processing your mortgage. Also many insurance companies will refuse to cover homes identified with these issues and/or give the buyer 30 days to remove them.
NOTE: other problematic issues for lenders and insurance providers not related to environmental concerns are knob-and-tube wiring, renovations/additions without proper permits, Insulbrick siding (tar-based siding which is highly flammable and may also contain asbestos), and legality of secondary apartment units.
Let’s review:
What are the options for the Seller?
- Do a pre-listing inspection. Identify the issues.
- Get quotes for remediation from reputable experts to provide to prospective buyers.
- Remediate before selling, then disclose and provide receipts.
- Do nothing and sell “as is”. This is often done in estate sales.
What are options for the Buyer?
- In your offer, request that the seller have the offending elements removed by a professional and provide you with all the receipts for the work completed prior to closing.
- During the conditional period get quotes for all the issues noted in your inspection and then do a price adjustment to reflect the expenses you will incur to address the issues (providing you can get insurance and a lender).
- Walk away and keep looking.
In the end it is up to each buyer to decide how he/she will proceed. Remember, the conditional period, typically five business days, is for the buyer to investigate and resolve as many issues as possible. At the end of those 5 days he/she can walk away with no penalty or decide to proceed to closing.
Remember: Hire a great inspector, one that primarily deals with older homes, ask lots of questions, do your due diligence.
And remember: buyer beware, seller disclose
MARKET UPDATE May 9to October 31
RESIDENTIAL: 7 Active Listings, 23 SOLD listings (7 selling over list price)
CONDOMINIUM: 34 Active Listings, 4 conditionally Sold, 74 SOLD Listings (5 sold over list price)
Lynda Cox is a sales representative with Faulkner Real Estate, “Living and Working in Lowertown”