Notify Tenants of Air Contamination Report Results

The environmental fallout from toxic vapors has been in the news recently. According to the New York Times, toxic vapors are intruding into homes in Greenpoint, Brooklyn, and the New York State Department of Environmental Conservation (DEC) is having difficulty assessing the problem because many residents will not allow their homes to be tested.

The vapors in question are believed to be left over from businesses that no longer operate in the neighborhood. An investigation in February 2007 discovered that the air in two homes was contaminated with traces of tetrachloroethene, also known as PCE or perc, and trichloroethene or TCE, manufactured chemicals used for dry-cleaning fabrics and degreasing metal parts. According to the Health Department, the side effects of PCE or TCE exposure range from dizziness and headaches to organ damage and increased risk of cancer.

Some residents are barring the inspectors out of fear that their homes may be condemned or property values adversely affected by the vapor intrusion.

A new law signed by Governor Paterson on Sept. 4, 2008, requires an owner to notify his tenants when the owner receives a report showing that air in the building has, or may have, concentrations of volatile organic compounds (VOCs) such as perc or TCE that exceed government guidelines. This new law became effective on Dec. 3, 2008.

Vapor Intrusion and VOC Contamination

The new law tries to respond to recent experiences in New York with vapor intrusion, which occurs when VOC vapors move from the ground through soil and into buildings. Until recently, the DEC focused its efforts primarily on soil and groundwater contamination. The DEC did not consider vapor intrusion as a significant risk unless VOC contamination occurred directly next to an occupied building. This changed a few years ago, after discovering significant levels of VOCs in residences near sites that the DEC had previously determined would not pose health risks.

The DEC is now systematically reviewing hundreds of VOC-contaminated sites that were pronounced “clean” before 2003. To the extent that the DEC can track down the responsible parties, it may require them to give air contamination reports to nearby apartment owners and other property owners. And under the new law, those nearby owners would then face disclosure obligations.

Owner's Disclosure Obligations

The new disclosure obligation applies to any “test results” that an owner receives from an “issuer,” defined as a party subject to a consent order under the state Superfund program or a participant in the Brownfields Cleanup Program.

Under the new law, within 15 days after a property owner receives an air contamination report from an issuer, the owner must give all tenants: (1) fact sheets, to be prepared by the Department of Health, about the contaminants at issue; (2) notices of resources providing more information; and (3) timely notice of any public meetings required to be held to discuss the air contamination report. If a tenant requests a copy of the air contamination report, the owner must provide it within 15 days.

To make sure the owner complies, the law requires owners subject to the disclosure obligation to include a disclosure notice in the lease agreements. This notice must appear in at least 12-point bold face type on the first page of the lease, and it must read as follows:

NOTIFICATION OF TEST RESULTS

The property has been tested for contamination of indoor air: test results and additional information are available upon request.

Possible Recovery, Penalties

Vapor-intrusion problems from other nearby sites serious enough to trigger air contamination reports may force an owner to disclose to tenants air quality problems for which the owner has no responsibility. However, ignoring the disclosure requirements could mean criminal and civil penalties under New York's Environmental Conservation Law (ECL).

To avoid liability to his own tenants, the owner may need to take remedial measures to prevent vapors from migrating into the building. If this is the case, the owner should try to recover the costs of these measures from a responsible party in a cost-recovery court action. Unfortunately, the ECL does not specifically give owners any remedy for loss of rent or property damage that might result from nearby contamination.

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