Environmental hazards

Environmental hazards are noxious or annoying conditions which are man-made, not natural hazards. As environmental hazards, the conditions are classified as either:

  • injurious to the health of humans; or
  • an interference with an individual’s sensitivities.

Environmental hazards are defects which, when known, are disclosed as material facts since the hazards might affect a prospective buyer’s decision to purchase the property.

The seller’s agent conducts a visual inspection of the property for environmental hazards before preparing the Transfer Disclosure Statement (TDS) and advises prospective buyers of their observations and knowledge about conditions which constitute environmental hazards. [See RPI Form 304]

A seller or their agent needs to deliver notice of any environmental hazard to a buyer in writing. The TDS and purchase agreement are currently used as the vehicles for written delivery.

Further, the seller’s agent delivers or confirms the buyer’s agent has delivered a copy of the environmental hazard booklet approved by the California Department of Health and Safety (DHS) to the buyer. [See RPI Form 316-1]

Environmental hazards located on the property which pose a direct health threat on occupants include:

  • asbestos-containing building materials;
  • formaldehyde;
  • radon gas concentrations;
  • hazardous waste;
  • toxic mold;
  • smoke from the combustion of materials;
  • security bars which might interfere with an occupant’s ability to exit a room to avoid another hazard; and
  • lead. [Calif. Business and Professions Code §10084.1(a)(1)]

Related Video: Visual Inspection and Method of Disclosure

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The hazards disclosure booklet

A seller or seller’s agent’s disclosure of their personal knowledge of any existing environmental hazards on a one-to-four unit single family residence (SFR) is mandated on the sale, exchange or lease of all types of property.

The seller and the seller’s agent disclose environmental hazards in the TDS under the “Seller’s Information” category at Section C. For comprehensive disclosure information, RPI’s (Realty Publications, Inc.)’s Hazards Disclosure Booklets reviews common environmental hazards which may exist on any property. [Calif. Civil Code §2079.7; see RPI Form 316-1]

Section A of the Hazards Disclosure Booklets, called Residential Environmental Hazards: A Guide for Homeowners, Homebuyers, Landlords and Tenants, is not a disclosure of detrimental environmental conditions which exist on a particular property. Rather, the section contains general information on a variety of environmental hazards, none of which might physically exist on the subject property. The seller’s agent voluntarily delivers the guide to the buyer, but there is no legal mandate to do so. [CC §2079.7(b); See RPI Form 316-1]

The guide includes a discussion about the significance of hazardous materials and conditions, and tips for identifying, locating and mitigating the hazards, as well as the symptoms experienced by humans resulting from the hazards.

A provision in the purchase agreement confirms delivery of the booklet. [See RPI Form 150 §12.6]

Once the booklet is delivered – by hand or digitally – in conjunction with the TDS, the seller’s agent’s disclosure of environmental hazards concludes. The delivery of these items eliminates any further duty the seller’s agent has in advising the prospective buyer about the existence of environmental hazards. [CC §2079.8]

Thus, when a hazardous condition disclosed in the TDS is addressed in the booklet, the disclosure of the condition in the TDS together with the booklet covers the extent to which the seller’s agent goes to provide a full disclosure about the existence and nature of that hazardous condition.

For the purposes of the seller’s side of the transaction, the agent and seller need to say nothing more to the buyer beyond timely providing them the TDS and the booklet to make the disclosures known, unless the buyer inquires further – which requires an honest and complete response.

For the purposes of the buyer’s side of the transaction, it is prudent practice for the buyer’s agent to deliver the full booklet to their buyer.

Here, the buyer’s agent uses the narrative provided in the booklet to educate the buyer about the consequences of any hazards actually existing on the property as noted in the TDS. Thus informed, the agent may prepare an offer for a price and set of terms reflecting the buyer’s consideration of the disclosed defects.

Further, counseling about the effect of hazards on the value of the property serves to mitigate the risk of claims from the buyer that the buyer’s agent failed to inform the buyer about the known consequences of the hazards disclosed by the seller and their agent.

RPI’s Hazards Disclosure Booklets contains numerous government consumer education publications, including:

  • Section A: Residential Environmental Hazards: A Guide for Homeowners, Homebuyers, Landlords and Tenants, discussed above;
  • Section B: Protect Your Family From Lead in Your Home;
  • Lead-Based Paint Disclosure – On Sale of Real Estate [See RPI Form 313];
  • Section C: The Homeowner’s Guide to Earthquake Safety;
  • Residential Earthquake Hazards Report [See RPI Form 315];
  • Section D: Natural Hazard Disclosure Statement and Buyer Receipt of Hazards Booklet(s) [See RPI Forms 314 and 316]; and
  • Section E: What is Your Home Energy Rating?

RPI’s Hazards Disclosure Booklets combine all of the above government documents, and related RPI forms, into one single publication for easy delivery by hand, mail or digitally.

The lead-based paint disclosure

In 1978, the federal Consumer Product Safety Commission banned lead-based paint (LBP) from use. An LBP hazard is any condition causing human exposure to lead from lead-contaminated dust, soil or paint which has deteriorated to the point of producing adverse human health effects.

Federal LBP rules require a seller’s agent to advise the seller about what to disclose to the prospective buyers before the seller enters into a purchase agreement to sell their home.

A prospective buyer of a residence built prior to 1978 is given the disclosure form providing notice of any known LBP condition before they make an offer. [See RPI Form 313]

The LBP disclosure further advises that they have a 10-day period after their offer is accepted to evaluate the LBP risks involved. The LBP disclosure cannot be waived using an “as-is” sale provision or otherwise.

The seller is not obligated to have the property inspected or obtain a report on the presence of LBP or any LBP hazards. Additionally, it is unnecessary for the seller to perform any corrective work to clean up or even eliminate the LBP conditions, unless specified in an agreement with the buyer.

To comply with LBP disclosure requirements, the seller:

  • fills out and signs the federal LBP disclosure form required on the sale of all pre-1978 residential construction; [See RPI Form 313]
  • fills out and signs the TDS, which includes a questionnaire regarding environmental hazards on the property including the existence of LBP; [See RPI Form 304] and
  • provides their agent with copies of any reports or documentation regarding LBP hazards on the property.

By making a fully-transparent presentation to prospective buyers before entering into a purchase agreement, a seller and their agent avoid later renegotiations due to delayed disclosures, including demands for a price reduction, renovation or cancellation.

Related Video: Lead-Based Paint Hazard

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A seller’s agent uses the Lead-Based Paint Disclosure form published by RPI when their property was built before 1978, to comply with lead-based paint disclosure laws. The disclosure notifies the buyer whether lead-based paint or lead-based paint hazards are known to the seller to be present on the property and gives the buyer an opportunity to conduct a risk assessment or inspection of the property. [See RPI Form 313]

The Lead-Based Paint Disclosure form contains:

  • a lead warning, notifying prospective buyers that property built before 1978 may present an exposure to lead and this requires the seller to notify the buyer of any known LBP hazard on the premises so that the buyer may conduct a risk assessment or inspection for possible LBP hazards prior to purchase (See RPI Form 313 §1];
  • a seller’s certification, in which the seller discloses whether the presence of LBP or LBP hazards are either known or unknown to the seller to exist on the property, as well as any records or reports available to the seller pertaining to LBP or LBP hazards [See RPI Form 313 §2];
  • the buyer’s acknowledgement that the buyer has received copies of all records and reports mentioned in Section 2 and the pamphlet Protect Your Family From Lead in Your Home found in the Hazards Disclosure Booklet [See RPI Form 313 §3.1; See RPI Form 316-1];
  • the buyer’s acknowledgement that the buyer either receives a 10-day opportunity from acceptance of the purchase offer to conduct a risk assessment or inspection for the presence of LBP or LBP hazards on the property, or alternatively, the opportunity to conduct a risk assessment is waived [See RPI Form 313 §3.2]; and
  • the signatures of the seller, buyer and the seller’s agent.