Proposed Meth Lab Disclosure Law Could Create Problems

Patrick Barnard
Written by Patrick Barnard
on February 17, 2015 No Comments
Categories : Blog View

BLOG VIEW: A proposed federal law introduced by U.S. Sen. Charles E. Schumer, D-N.Y., would require home sellers and landlords to inform buyers and tenants when a home, condominium or apartment had been a former meth lab.

In a release, the senator says families in his state are unknowingly moving into homes that were once used to make meth, because there is no law requiring sellers or landlords to disclose the home's former use. He says it is critical for buyers or renters to be aware that meth was once made in their home because the chemical remnants from the meth-making process can be hazardous to health and often seep into carpets and walls.

Not only can these chemical remnants cause certain health problems, especially in children, but it can cost up to $10,000 to clean them up, a release from the senator's office states.

The proposed law would require the former owners of a property to disclose if it was once used as a meth lab. Should they fail to disclose that, and it is discovered after the sale, the former owners could be fined up to $11,000.

It is unclear from the release whether all property owners will be required to test their properties for the presence of ‘chemical remnants’ before selling. It is also unclear whether all homeowners who fail to perform such tests will be fined in the event the home tests positive for chemical residue following the sale.

The release says there is a ‘simple test‘ that can detect the presence of chemicals used in the meth production process. Although the proposed legislation would require disclosure of homes that test positive for the presence of these materials, it is unclear whether every home would have to be tested prior to sale – and further, whether homeowners should do this testing themselves or hire a professional. Based on data from law enforcement, the senator's office estimates that only about 5% of all the homes used to make meth are ever discovered to be meth labs – usually a result of law enforcement action.

The release says the proposed law would work basically the same as the state and federal laws that protect home buyers from lead paint. For example, under the U.S. Department of Housing and Urban Development's (HUD) Lead Disclosure rule, before a home is purchased or leased, the owner of the property must disclose the presence of lead-based-paint and lead-based paint hazards. Under those rules, a seller must test for, and disclose to the buyer, the discovery of any ‘known’ lead paint in a home built prior to 1978. In addition, the buyer can voluntarily request and pay for a lead test.

In my opinion, the word ‘known’ in that particular law leaves a gaping hole in the testing and confirmation process.

It is unclear from Schumer's release whether a property owner could be fined for failing to test and disclose that a property was once used as a meth lab by a previous owner. In other words, there is a question as to how ‘retroactive’ the law will be and whether it will apply to past owners. What if the home was a meth lab three owners ago? Is the current owner still responsible for the cleanup, in that case – or is there a mechanism to get the former owner to pay the fine as well as the costs for any required clean up? Or is it just, simply, ‘Sorry, but your home is a toxic waste dump, and even though you didn't know, you now have to pay to clean it up.’

I see the potential for a lot of problems with this proposed law. For one thing, what if there are ‘false positives’ in the testing process, when homeowners or potential buyers are testing for the presence of meth ‘remnants?’ Some of the chemicals used in the meth process are common, every day, ‘off-the-shelf’ chemicals. It's possible that a home could have residue from one or more of these chemicals – yet meth was never made in the home. I'm wondering how the federal government will go about setting the thresholds concerning the presence of certain chemicals for a home to be considered a ‘former meth lab.’ Will there be a standard for detecting these remnants, as there is with lead?

I also wonder whether this law could lead to the creation of a public database of all the homes that were ever used as meth labs. If law enforcement has only uncovered about 5% of all the homes that have once been used for meth production, then there could potentially be tens of thousands of homes out there that are former meth labs. Getting all these homes into a single database that could be accessed by home buyers would no doubt severely impact their retail value. What's more, buyers would avoid these properties like the plague, thus thwarting lenders' efforts to get these homes off their books in the event they become bank owned.

Schumer notes that 23 states have enacted similar laws. I'm wondering how well those laws are enforced – how many fines have been levied thus far – and how many additional ‘former meth labs’ have been discovered as a result.

Currently, the federal Environmental Protection Agency has only set forth voluntary guidelines for state and local governments for meth lab clean-up.

While I agree that people should be protected from such dangers, this proposed law could create problems if it ends up unfairly requiring sellers to pay for expensive clean-ups of former home owners' meth lab activities. It could also be a problem if it ends up resulting in a database of tens of thousands of homes that no family will ever want to buy.

(Do you have an opinion to share with MortgageOrb? Get in touch! Send an email to pbarnard@zackin.com.)

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