Environmental Disclosure– New York Takes the Lead– But Where Will it Lead

New York State has recently enacted a new section (27-2405) of the Environmental Control Law which shall now require Landlords and Owners to Notify Tenants of “Indoor Air Contamination.” Effective December 2008, property owners and landlords will be required to to disclose the results of environmental testing to tenants (both current and prospective). What are the potential ramifications of such a new law?

First, although the New York Environmental Law focuses on “indoor air contamination” and vapor intrusion, the law broadly defines the disclosure to include all “test results.”

“TEST RESULTS” SHALL INCLUDE THE RESULTS OF ANY TESTS CONDUCTED ON INDOOR AIR, SUBSLAB AIR, AMBIENT AIR, SUBSLAB GROUNDWATER SAMPLES, AND SUBSLAB SOIL SAMPLES”

Therefore, such tests could mean that any tests of indoor air, outdoor air, groundwater and soils beneath homes and buildings must be disclosed to Tenants if the test results exceed federal or state air guidelines.

If the New York State property is the subject of engineering control by a municipality or the government and is subject to monitoring under a remediation program, then such tenants must be provided written notice of any testing in bold on the first page of any lease agreement.

The penalty provided by the New York statute requires owners of such properties to provide the fact sheet and notice of public meetings (if the test results will be discussed), or face monetary fines.

As with any new law, there are various unanswered quandaries:

1– Does a purchaser of a building have to disclose the results of its environmental investigation, including any Phase I or Phase II inspections?

2– Does the law apply to previous testing done before a new owner gains possession?

3- Assuming something is found, does the law require a building be retested?

4– If the testing shows no problems, must the testing be disclosed?

5– Is the owner responsible for unknown substances or areas that are not tested at first but later found to exceed some standard?

More to follow as these questions, and others get answered by the courts or attorneys.