How to notify buyers of oil contamination on a REO property?

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How to notify buyers of oil contamination on a REO property?

Postby mowich » Thu Feb 25, 2010 6:49 am

Hi, my wife and I recently had an offer accepted and we ordered an inspection for a REO house in Whittier Heights (N Ballard). We found out through the oil tank company that soil is pretty contaminated. To illustrate:

What EPA suggests for a garden: < 100ppm
What WA state requires for a cleanup: > 2000ppm
This house: 53,000ppm (5%)

It's a bad situation - the bank is trying to sell the property without disclosing this, the previous owner (the one foreclosed on) isn't liable, and any future owner won't have the cleanup covered under PLIA insurance (because it was not the current tank, but the previous tank that leaked).

We obviously walked away, but we'd like to save others from going through the hassle we did, and make sure that nobody gets stuck with the house. We've told the oil companies to flag this house in case folks call to check, but other than taping signs to the house, is there anything we can do?? Thanks much!
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Re: How to notify buyers of oil contamination on a REO property?

Postby jillayne » Thu Feb 25, 2010 10:35 am

I must preface this comment by stating that I am not an attorney. Do not rely on me for legal advice.

With that said, your question makes me wonder if there are any existing state laws regarding a required disclosure with any kind of environmental hazard.

I'm thinking of things like a former meth lab or mold. Perhaps contaminated soil would fall into that category.

Once a home owner has knowledge of these items, I'm wondering if there is any state law that would require disclosure.

Now if the REO company OR the real estate agent representing that company has knowledge, I'm not so sure they can pretend those problems do not exist.

We'd need a licensed real estate agent to pick it up from here and help out with MLS rules.
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Re: How to notify buyers of oil contamination on a REO property?

Postby ira s » Thu Feb 25, 2010 12:36 pm

I am not an attorney either and am not giving legal advice, so what I am about to say should not be in any way construed as such.
The Washington State Legislature amended RCW 64.06, the seller disclosure laws. Effective July 22, 2007, the law exempting lienholders who acquired the property through foreclosure or deed in lieu of foreclosure was changed, so that the lienholders who have foreclosed and acquired the property are now subject to the Form 17 requirements. .In the real world, the lenders who take possession have no knowledge of the property's condition and don't want to know and often don't fill out the form. But in this case, where the soil was contaminated, I would think there would be a way to force the lender/owner to acknowledge the contaminated soil. If the soil was that contaminated, would the EPA be able to make a determination that a cleanup was legally required? , If that were the case case the lender/owner would be notified. Wouldn't they then have an obligation to report the contaminated soil on the Form 17?
Again, I could be way off base here, so if someone with legal/environmental expertise could expound, I'd be appreciative.
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Re: How to notify buyers of oil contamination on a REO property?

Postby Haybaler » Sat Feb 27, 2010 6:34 pm

There are two actions that seem reasonably effective and will not require too much of you.

First, Log onto the Zillow site and post a Question about the Fuel oil contamination....... I have observed that questions and comments live a long life on the Zillow page.

Second: Take copies of the pertinent pages of your inspection report into the County Recorders office. Fill out the cover sheet they will provide you and record your inspection results. The fee is token, based on the number of pages. This action will put the world on notice of the contamination every time a title report is pulled. Eventually the lender will want to clear it off of the title or record the results of a contamination remediation action.

Take these two actions then forget about it....you will have done your part.
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