Friday, October 31, 2008

Disclosure of Environmental Issues in Residential Real Estate Transactions

In the 2008 session the Connecticut legislature made some revisions to a little known law regarding disclosure of environmental contamination in residential real estate transactions. The law is Section 20-327f of the Connecticut General Statutes.  The original law stated that if a seller of a one to four family home disclosed to the buyer that a list of a list of local hazardous waste sites could be found at the local town clerk’s office, then the seller satisfied any possible obligation to disclose the existence of any of these facilities. Presumably this meant any facilities located near the property being sold, but of course the statute isn’t that specific. By statute the Connecticut Department of Environmental Protection is required to deliver the list to each town clerk. 
 
The revisions to the law kept the old language and added a new provision. It says, again for 1-4 family real estate, if the seller provides notice to the buyer of the “availability of information concerning environmental matters” from several different federal agencies and “third-party” providers, then the seller and any broker shall have satisfied any duty to disclose “environmental matters concerning properties other than the property that is the subject of the contract.”
 
The law specifically provides that the enactment of this law does not create a duty to make these disclosures. I am not aware of any law, either by statute or common law, which would require these disclosures. Why would a seller be required to disclose the environmental condition of a property he or she doesn’t own? Disclosures usually only apply to the property being sold. What else are they not required to disclose? What if the moon doesn’t hang quite as high as it used to? (Sorry, I always liked that line and couldn’t resist.) The end of caveat emptor and the emerging obligations of sellers to make disclosures about the property being sold, especially matters not easily found, are good things. But even suggesting that sellers make disclosures about other properties doesn’t make much sense to me.
 

Nonetheless, if you have the opportunity, it’s a pretty easy thing to put in a real estate contract. Most contracts for residential property are done on preprinted forms, so that isn’t going to be easy to do. But it is worth considering.

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