CH - 3: Environmental Issues in Real Estate

CH - 3: Environmental Issues in Real Estate

Which of the following can protect a buyer from unexpected environmental problems after closing?

• Assurances from real estate licensees

• Relying on studies done by their own scientific experts

• Environmental site assessment

• Environmental impact statement

Answer explanation

The answer is environmental site assessment.

An environmental site assessment (ESA) is often performed on a property to show that due care was exercised in determining whether any environmental impairments exist. A seller disclosure is of limited value, especially since it is not required for nonresidential properties.

CH - 3: Environmental Issues in Real Estate

What disclosure does the Seller Property Disclosure Statement require?

• Type of mold found in the property

• Acidity of the soil

• Type of sewage system on the property

• Carbon monoxide levels

Answer explanation

The answer is type of sewage system on the property.

Sellers of one- to four-family dwelling units are required to indicate the type of sewage system that is on the property. If the property is not serviced by a public sewage system and no community sewage system is available, a permit for an individual system must be obtained before installation.

CH - 3: Environmental Issues in Real Estate

What does the Residential Lead-Based Paint Hazard Reduction Act require?

• The seller or the seller’s agent must distribute a federal lead hazard pamphlet.

• The buyer must purchase the property after inspections are performed.

• The seller must remove any known lead paint.

• A lead warning statement must be included in a listing agreement.

Answer explanation

The answer is the seller or the seller's agent must distribute a federal lead hazard pamphlet.

The Residential Lead-Based Paint Hazard Reduction Act imposes duties on sellers and landlords. Sellers and landlords (and their agents) have a duty to provide prospective buyers or tenants with a lead hazard information pamphlet before a contract is entered into.

CH - 3: Environmental Issues in Real Estate

The purpose of the laws concerning asbestos is to ________.

• fine owners of buildings containing the mineral

• require that it be removed from public buildings immediately

• minimize the release of asbestos fibers during construction and removal

• regulate its removal from apartment buildings with fewer than 10 units

Answer explanation

The answer is minimize the release of asbestos fibers during construction and removal.

The purpose of asbestos laws is to minimize the release of asbestos fibers while handling and processing during construction and removal.

CH - 3: Environmental Issues in Real Estate

Which sellers are required by Pennsylvania state law to disclose environmental hazards?

• Sellers of agricultural properties

• All sellers of real property

• Sellers of one- to four-family dwelling units

• Sellers of raw land

Answer explanation

The answer is sellers of one- to four-family dwelling units.

Like most states, Pennsylvania requires that sellers of residential properties disclose environmental hazards, but the requirement does not extend to commercial and industrial properties.

CH - 3: Environmental Issues in Real Estate

What is required before any federally funded development project is approved?

• Lead-based hazard assessment (L-BHA)

• Environmental site assessment (ESA)

• Environmental impact statement (EIS)

• Phase I environmental report

Answer explanation

The answer is environmental impact statement (EIS).

A federally funded project requires that an environmental impact statement be prepared that details the impact that the project will have on the environment, such as information about air quality, noise, public health and safety, energy consumption, population density and more. Increasingly, these statements are required for private development.

CH - 3: Environmental Issues in Real Estate

The term encapsulation refers to the _________.

• way in which lead-based paint particles become airborne

• process of sealing a landfill with three to four feet of topsoil

• method of sealing disintegrating asbestos

• way in which insulation is applied to pipes and wiring systems

Answer explanation

The answer is method of sealing disintegrating asbestos.

Encapsulation is a process by which disintegrating asbestos is contained. Owners should periodically reinspect the condition of the encapsulated asbestos to ensure that the material used to cover the asbestos is not disintegrating.

CH - 3: Environmental Issues in Real Estate

A colorless, odorless gas that is a significant health hazard that occurs as a natural byproduct of combustion is ________.

• hydrochloric acid

• oxygen

• carbon monoxide

• ethanol

Answer explanation

The answer is carbon monoxide.

Carbon monoxide (CO) is a colorless, odorless gas that occurs as a natural byproduct of combustion. Malfunctioning or improperly ventilated equipment can allow CO into the indoors, a significant health hazard.

CH - 3: Environmental Issues in Real Estate

Under the Pennsylvania Sewage Facilities Act, if a property is not serviced by a public sewage system and no community sewage system is available, ________.

• nothing larger than a single-family home may be constructed on the site

• the property is a major public concern

• no home may be constructed on the site

• a permit for an individual system must be obtained

Answer explanation

The answer is a permit for an individual system must be obtained.

Licensees should be aware of Section 7 of the Pennsylvania Sewage Facilities Act of 1994. This section requires notice to prospective buyers that if a property is not serviced by a public sewage system and no community sewage system is available, a permit for an individual system must be obtained.

CH - 3: Environmental Issues in Real Estate

A property that is stigmatized because it is suspected of containing toxic waste is called _________.

• an abandoned waste site

• a landfill

• a brownfield

• a protected land site

Answer explanation

The answer is a brownfield.

Brownfields are defunct, derelict, or abandoned commercial or industrial sites, many of which are suspected to contain toxic wastes.