CREJ - Journal

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January 21-February 3, 2015 — COLORADO REAL ESTATE JOURNAL — Page 19
Law & Accounting
T he State Board of Health
adopted amendments
to its rules for the clean-
up of illegal drug labs. These
amendments, effective Dec. 15,
2014, make substantial changes
to the process used to evaluate
and accomplish cleanup. The
regulations can be found online
at:
pacific/cdphe/methlabcleanup.
The major changes are as fol-
lows:
• Consultants conducting sam-
pling and certifying cleanupmust
now be certified by the Colorado
Department of Public Health and
Environment. There is a process
for interim certification – do not
use a consultant whose name or
company is not on this list. Those
companies and individuals that
have completed interim certifi-
cation also can be found on the
state's web page shown above.
• A training and formal certi-
fication process is being estab-
lished for consultants and clean-
up contractors. Basic curriculum
is contained in the regulation and
CDPHE is in the process of certi-
fying training courses.
• CDPHE now has administra-
tive enforcement powers regard-
ing these regulations.
• The process for sampling
to determine if contamination
is present has been modified.
The use of composite samples is
allowed but they are nowdefined
and limited. New procedures
are in place for sampling of sur-
faces painted after contamination
occurred.
• Post-cleaning verification
sampling is defined in greater
detail and the regulations now
contain a great deal of specificity
on personal property.
• Reports of cleanup must now
be sent to CDPHE in addition to
the local authorities.
• New procedures have been
adopted for screening assess-
mentsofpropertynotknowntobe
impacted by methamphetamine.
These studies typically are done
prepurchase as allowed under
statute. Certified consultants
must be used and specific proce-
dures and reports are required.
As the statute and standard resi-
dential real estate contract allow
cancellation based upon adverse
results, we anticipate that liti-
gation on compliance with the
screening assessment proce-
dures will occur in some cases of
contract can-
cellation.
T h e s e
s c r e e n i n g
assessments
also apply to
mu l t i - u n i t
r e s i de n t i a l
transactions
and they sug-
gest rigorous
sampling as
part of the
due diligence
process. Buy-
ers and sellers
of multi-unit
properties will want to careful-
ly consider these requirements
when crafting contracts if for no
other reason than the cost of due
diligence could be quite high.
The regulations do not mandate
screening assessments, but they
may define the scope of work
if conducted and not otherwise
carefully defined by contract.
While these are rigorous
requirements, there is a benefit
to compliance with the regula-
tory cleanup process. Once a
property owner has an industrial
hygienist certify that the cleanup
procedures have been met, the
property owner is immune from
suit by subsequent occupants or
neighbors for health problems.
According to statute, that prop-
erty owner also need not disclose
the fact that a cleanup occurred
when he sells the property – a
very bad idea in my view, that
almost always generates litigation
when the newowner learns about
the problem.
As best we can tell, meth labs
are more common now than they
were a couple of years ago. We
have seen a resurgence in the dis-
covery of meth labs and litiga-
tion. Foreclosure flips remain the
most common scenario, although
we are still seeing them in apart-
ments, townhomes, self-storage
units and commercial spaces.
It is critical to understand that
“meth lab” doesn't necessarily
mean a manufacturing operation.
Drug use alone has been proven
to cause contamination in excess
of the state cleanup standard, and
that is today the most common
scenario. Proof of contamination
is not required. I can't say this
enough as it comes up over and
over again. Proof of contamina-
tion is not required to trigger the
obligation to comply with the
regulations or the obligation to
disclose.
Law enforcement is rarely
involved in this discovery pro-
cess. The most common discov-
ery scenario is the neighbor who
comes bearing the welcoming
fruit basket and expresses plea-
sure that the new owners are
much nicer than the drug users
that were previously residents.
Such a disclosure causes immedi-
ate angst and phone calls to law-
yers and consultants.
The buyer needs to beware.
Even with a certification pro-
gram for consultants and con-
tractors, get and check references
before you hire anybody to do
anything regarding metham-
phetamine contamination. There
are no shortcuts. Only one sam-
pling and analysis approach is
approved under the regulations –
use something else and you aren't
in compliance. You can't paint
over a meth problem. You must
perform a cleanup that involves
either scrubbing walls or remov-
ing them to eliminate the con-
tamination.
Extreme caution must be used
when contemplating cleaning.
This is not a job for normal main-
tenance and cleaning crews. Pro-
tective equipment must be used.
Occupantional Safety and Health
Administration 40-hour hazard-
ous materials training is typically
the minimum. Keep in mind that
if other contaminants are present,
such as asbestos, different training
and certificationwill be necessary.
It should be obvious that dis-
closures regarding meth labs are
required in real estate transac-
tions. Under Colorado statute
the seller of residential real estate
is required to disclose if he has
knowledge that a meth lab was
present. This is in addition to
the routine real estate disclosure
form. Many attorneys feel that
failure to disclose drug use that
has the potential to contaminate
the property also is required as a
routine disclosure. This is appli-
cable to commercial property as
well.
Under the statute the buyer of
residential property has an abso-
lute right to have the property
tested to determine if a metham-
phetamine drug lab may have
been present. No cause to suspect
a lab need be present and the
right to test cannot be limited by
contract.s
Timothy R.
Gablehouse
Shareholder,
Gablehouse Granberg
LLC, Denver
6400 S. Fiddler's Green Circle
Suite 1000
Greenwood Village, CO 80111
Phone (303) 796-2626
Fax (303) 796-2777
Deals. Litigation. Great Service.
Merc Pittinos Matt Dillman Abe Laydon
Attorneys at Law