Selling Your Home? New Radon Law Requires Disclosure
Minnesota law already requires home sellers to disclose all kinds of information about their home, such as the existence of wells, the existence of lead paint, the existence and design of septic systems, and any home defects or problems the seller is aware of. A new law in Minnesota, known as the Minnesota Radon Awareness Act, will now require home sellers to disclose radon information to any prospective buyer. The law takes effect on January 1. 2014. Failure of a home seller to comply could expose the seller to liability if a buyer suffers damages.
Radon was first discovered in high concentrations in homes in 1985. It is a colorless, odorless, and tasteless gas that occurs naturally as a result of the decay of uranium in the soil. Since radon is radioactive, it can contribute to the development of lung cancer, particularly in smokers. The highest concentrations of radon are found in Iowa, but unhealthy concentrations of radon have been found in all 50 states. Minnesota is in a zone where high concentrations of radon in buildings are common.
Because radon in high concentrations is thought to be unhealthy, the government recommends that every home be tested for it. If unhealthy concentrations of radon are found, various measures can be taken to reduce it. There are also construction methods which can be used in new homes to minimize radon intrusion.
Apparently, the legislature believes that not enough homes are being tested for radon, and that bad test results are sometimes hidden from buyers of those homes that are tested. The Minnesota Radon Awareness Act is a response to that concern.
What does the new law require? That sellers of homes disclose and provide certain radon information to prospective buyers prior to the signing of a purchase agreement. That information includes:
- Any knowledge the seller has of radon concentrations in the home.
- Whether the home has been tested for radon.
- A description of and the most current records or reports relating to radon tests or work done to reduce radon in the home, if any.
- All information and documents concerning any radon reduction system installed in the home.
- A specific pamphlet concerning radon (can be downloaded at www.health.state.mn.us/radon).
- The following statement, verbatim, in writing:
“Radon Warning Statement
The Minnesota Department of Health strongly recommends that ALL homebuyers have an indoor radon test performed prior to purchase or taking occupancy, and recommends having the radon levels mitigated if elevated radon concentrations are found. Elevated radon concentrations can easily be reduced by a qualified, certified, or licensed, if applicable, radon mitigator. Every buyer of any interest in residential real property is notified that the property may present exposure to dangerous levels of indoor radon gas that may place the occupants at risk of developing radon-induced lung cancer. Radon, a Class A human carcinogen, is the leading cause of lung cancer in nonsmokers and the second leading cause overall. The seller of any interest in residential real property is required to provide the buyer with any information on radon test results of the dwelling.”
As above, all of the required information must be provided BEFORE a purchase agreement is signed. Failure to provide all of the required information may make the seller liable to the buyer for damages. The buyer may also be able to cancel the purchase agreement.
Are there exceptions to the law? Yes, many transactions are exempt from the law:
- any transfer of property that is not residential.
- any transfer property of where no money changes hands (gifts).
- any transfer of property required by court order.
- any transfer of property to the government.
- any transfer of property due to a foreclosure.
- any transfer of property by inheritance.
- any transfer of property between owners of the same property.
- any transfer of property to a spouse, parent, grandparent, child, or grandchild of the seller.
- any transfer of property between spouses as a part of a divorce.
- certain options to purchase townhomes or condominiums.
- certain transfers of property between property development companies and their owners.
- any transfer to a tenant who is already in possession of the property.
The new law does not require that homes be tested for radon before they are sold. It only requires that certain information be provided, and that if the home has been tested, certain information about the test results and any work done to fix the problem be disclosed.
If you list your home for sale with a real estate broker, and give the required information to your real estate agent, that is enough to satisfy the law’s requirements. You do not need to personally give the information to prospective buyers because the real estate agent is required to do that once the agent has received the information from you.
If you decide to sell your home on your own, it is a good idea to seek the assistance of an experienced real estate attorney in gathering all the needed information and putting it in the proper format for the buyer. An experienced real estate attorney can also prepare or review the purchase agreement and help you put together all of the other information you are required to provide to prospective buyers, like well and septic information, any information concerning the existence of lead in the home, and any defects or conditions affecting the property.
Bob Kanuit is a lawyer with Fryberger, Buchanan, Smith, & Frederick, P.A., in Duluth. He has been practicing residential and commercial real estate law in Minnesota and Wisconsin since 1994. He is board certified as a Real Property Specialist by the Minnesota State Bar Association.