by Peter Scherman of The B&B Team
What do asbestos, formaldehyde, carbon monoxide, lead, pesticides, radon, UST’s, and toxic mold have in common? They are just a few of the things that real estate professionals (including inn brokers) deal with on a daily basis. If you’re wondering why real estate brokers have to deal with them, then you’ve never been sued by an unhappy buyer who discovered, after the fact, that one or more of these listed items was a problem in their new bed & breakfast. And if you’re wondering why you, an experienced or aspiring innkeeper need to worry about them, read on.
Real estate and business transactions are littered with the mine fields of litigation and shattered dreams. Like mines buried beneath the ground, the main causes of litigation and disappointment in bed & breakfast and country inn sales are not obvious to the untrained eye. While accusations of misrepresentation run rampant in the disclosure (or non-disclosure) of financial information, environmental hazards are a more subtle and potentially dangerous problem when buying or selling an inn. They need not be the kiss of death, however.
Throughout the country, many bed & breakfast inns are created from the most magnificent old homes that have stories to tell, style and character unknown today, strokes of architectural brilliance, and examples of long-lost craftsmanship. But often times these old homes have environmental hazards lurking in dark places. And, because they are in dark places, many would prefer to leave them there, out of sight and out of mind. Doing so, however, is a big mistake.
Let’s take a look at some of the most common environmental hazards found mostly, but not exclusively, in older homes, and how an innkeeper or aspiring innkeeper should address them. Current innkeepers should have their inns inspected to know what conditions exist, so they can address those that pose potential health hazards to themselves or their guests. Note that I say “potential,” because if a problem is addressed properly, it need no longer be a threat. And, since prospective purchasers will likely (hopefully) conduct inspections that include environmental hazards (aspiring innkeepers take note), addressing environmental issues now may prevent a sale from falling through later, or worse, may avoid a devastating lawsuit.
One of the most well-known environmental hazards is asbestos. A naturally occurring fiber used in a multitude of products, mostly for its heat insulating properties but also as a fiber for strength, asbestos can be a serious potential hazard when inhaled, leading to lung diseases like asbestosis and cancer. When bonded in materials, it is perfectly safe when found in older buildings and can usually be covered or encapsulated. However, the most common source of problematic asbestos in historic homes is in the basement, where heating and hot water pipes were wrapped in asbestos insulation. Often times the insulation is still in relatively good condition and can be encapsulated to prevent release. But frequently the old insulation has begun to deteriorate, the asbestos material has become friable, and particles are free to become airborne and dangerous when disturbed. Removal must be handled by licensed and experienced professionals.
Another almost universal potential hazard in older homes is lead-based paint. For the past few years the Federal Government has required sellers and landlords of residential dwellings built prior to 1978 (when lead-based paint was banned) to disclose to prospective purchasers or tenants the possible presence of lead-based paint and the dangers thereof. Lead is a well known poison that was used as an additive in paint. It’s not for nothing that “battleship gray” held up for years under the harshest conditions. The lead in the paint made it strong! Today, lead that remains in old paint beneath layers of newer paint can still become airborne or absorbed through the skin as a result of friction. Where doors and windows, for example, rub against other surfaces, or a sander is used to remove old paint, lead-based paint can turn to dust. Where old paint is flaking from the outside of a house and needs to be scraped, care must be exercised with the flakes, as they may contain lead and could contaminate the soil around the house. Lead is dangerous especially for children and the elderly when they are chronically exposed, but anyone can be poisoned. Lead-based paint is almost certainly present in older homes, so the best remedies are cleanliness and education. Don’t walk away from a wonderful old house, however! Simply be aware of the risks so you can take the necessary, simple steps to protect yourself and the environment.
Radon is another popular hazard. I say “popular,” because radon has become part of the American lexicon when it comes to home inspections. This colorless, odorless radioactive gas created by the natural breakdown of uranium in the soil can enter any home, old or new. It is believed to be the second leading cause of lung cancer after smoking, yet most people don’t think much about it. Radon has been found in all 50 states, so there can be no assumption that it is present or absent, even from one house to the next on a block. And, while radon will not pose a health hazard to your guests who will not be exposed for a long period of time, it could pose one to you, especially if you’ve made a cozy innkeeper’s apartment in the basement (radon is heavy, seeks the lowest point, and is emitted from the soil). The good news is that it’s quite easy and relatively inexpensive to correct.
All owners of heated homes should be aware of the potential for immediate danger from carbon monoxide. It is caused by the incomplete combustion of carbon-containing fuels including coal, wood, charcoal, natural gas, and fuel oil. It can be emitted from many sources but poses a threat to one’s health when it has the chance to build up in a confined space and is inhaled, causing the loss of the blood’s ability to carry oxygen throughout the body. It can cause symptoms often confused with the flu, and, in severe cases, can cause death. All fuel burning appliances in a home should be checked for carbon monoxide emissions. Regular maintenance of all furnaces and water heaters is the best way to prevent problems.
One of the lesser known potential hazards that has recently stormed onto the front pages and into the TV newsmagazines is toxic mold. Anyone who owns an old house knows that mold is a part of life. It’s what gives the house that smell of being old. It’s sort of comforting, in a way. But, for many with allergies, some types of mold can be an irritant. And, according to recent reports, some molds can even kill you. While awareness of this problem is growing, the potential for real harm, both physically and financially, is evident. Mold grows in moisture. Without water, mold has no medium in which to thrive. Old homes are typically less water-proof in the basement, but water can get into any structure in any number of ways. The best preventative is to correct moisture problems wherever they are found, which will also reduce the likelihood of other wood damaging organisms getting into your house. Tests for dangerous molds are in the pipeline.
There are numerous other potential hazards: underground storage tanks (UST’s), those old buried oil and gasoline tanks lurking in back yards across America; formaldehyde; pesticides; coliform bacteria and poor water quality, etc. The important thing to remember is that an ounce of prevention is worth a pound of cure. If current owners of property understand what the hazards are, they can take steps to protect themselves while enjoying a wonderful lifestyle. And if prospective purchasers ask the right questions and perform the right inspections, they will protect themselves from future liability or unpleasant surprises.
An important note: there are a lot of inns and bed & breakfasts for sale by owner. Just because there isn’t a broker involved, don’t think that proper and legal disclosure of known environmental hazards or other latent material defects isn’t required by law. It is.
So, if you’re selling, be sure you’ve taken care of problems and make the required disclosures. If you’re buying, be sure to do your due diligence. And remember that licensed real estate professionals have a legal duty to disclose many of these conditions and can connect you with qualified professionals to help discover and remedy problems, which can be a good way to reduce your risks.