Effective January 1, 2013, the sellers of real property that is not served by a public water system will have to provide the buyer with certain information about the potential health effects of consuming contaminated groundwater and the availability of test kits from the Vermont Department of Health.
According to the U.S. Environmental Protection Agency and the Vermont Department of Health, nearly 40% of Vermont residents obtain their drinking water from groundwater sources. News stories of families harmed by contaminated by contaminated ground water sources are becoming more frequent, and in many cases the link between the health issue and groundwater is not made until years after the damage has been done. Legislation initially considered would have required property owners to test water wells for a variety of contaminants. The proposal was met with stiff opposition, and the newly enacted law is seen as an acceptable compromise in addressing a significant health concern. Sellers do not have to test their water source, but they do have to notify buyers of potential risks.
Vermont law already requires the sellers of pre-1978 homes provide buyers with information about the hazards of lead paint. Sellers are now required to also provide buyers with similar information about the potential risks of contaminated groundwater water within 72 hours of the “execution of a contract for conveyance of real property (more commonly referred to as a “purchase and sales agreement.”) The informational materials are being developed by the Department of Health and should be available on line prior to 2013.
Sellers who work with a realtor or broker should find it easy to comply with the new law. The statute requires the department of health to worker with brokers to develop language to be added to the “seller’s property information report (“PIR”). The PIR is a written report developed and voluntarily used by the real estate industry to disclose to buyers important information about the property. Providing the information at the beginning of the sale minimizes the risk that a buyer will later claim that the seller failed to disclose information which may have caused the buyer to reconsider the purchase. While some may see the new law as more burdensome paperwork it can actually protect the seller down the road.
The new law is not limited in applicability, however, to only those deals involving a real estate professional. Nor does the requirement appear to apply only to residential property. The statute merely requires that any “seller” of real property provide the required information to buyers which would include “for sale by owner” transactions and sellers of commercial properties as well.
But while the seller’s failure to provide the required information will not affect the marketability of the property’s title, a civil penalty of up to $250 can be incurred.