Radon: A solvable problem
| November 02, 2017
Awareness of radon gas has become more prevalent in recent years, and with the expanding availability of home testing, more homebuyers—and property owners—are wondering if they should have a home tested for radon prior to purchase.
How should you handle this as a real estate professional? The first step is educating yourself, and educating your clients.
What is Radon?
Radon is an odourless, tasteless, colourless radioactive gas that is the by-product of uranium decay. Uranium occurs naturally in soil and rock formations, and places with higher than normal uranium deposits, such as Alberta and Saskatchewan, have higher radon levels.
Radon seeps through the earth and into basements, where it can become trapped because of the efficient way our homes are sealed from the outside elements. In fact, newer homes in Southern Alberta (built after 1992) show a 30% increase in radon levels, since they are typically larger and better sealed than older homes.
Prolonged exposure to radon can lead to health problems, including lung cancer. In fact, after smoking, radon gas is the leading cause of lung cancer.
Luckily, it’s testable and fixable
Concerned homeowners can have their home tested, and if they need it, they can install a radon mitigation device to vent radon gas outside the home from the basement. Since November 1, 2015, the Alberta building code requires that all new homes have a basement rough-in for a radon mitigation device. Mitigation costs vary, but are often not more than $2,000-$3,000 for a typical residential property.
What can I do during the offer process for a residential property?
Real estate professionals should be talking to their clients about radon.
Unfortunately, there’s not much that can be done during the offer and negotiation phase of a real estate transaction. Reliable radon tests take 90 days to complete; a length of time that most buyers and sellers will not find reasonable. There are two-day test kits on the market, but the results from these tests are not reliable, and should not be used.
If a client wants to test their home, advise them to use a Canadian – National Radon Proficiency Program (C-NRPP) certified professional for all testing and mitigation. Calgary, Red Deer, and Edmonton have multiple certified professionals available.
Real estate professionals representing sellers can provide their clients with information early on, so they can make an informed decision whether to get a test done before listing their home. They could then provide the test results to prospective buyers if they ask. In the event the levels are low, or, if the levels are high and the sellers proceed with mediation prior to listing, it could be a selling feature. If the radon test shows high levels of radon (higher than 200 Becquerel), RECA would consider this a material latent defect that real estate professionals MUST disclose to prospective buyers unless a radon mitigation device is installed prior to listing.
If radon is a concern for your buyer clients (and it should be!), real estate professionals should ask seller’s real estate professionals if the seller has conducted a radon test, and discover relevant facts about properties, including if mitigation rough-ins or completed mitigation systems are already in place. Real estate professionals can also talk to clients about the possibility of discounting the offer price by the cost of radon mitigation, or about the possibility of putting a holdback on the offer to purchase that will be released upon low radon test results. Indicate in the holdback clause that if the test results in high radon levels, the holdback funds will be put towards mitigation, with any remaining funds released to the seller afterwards. Of course, the sellers have to agree to such a holdback.
Homeowners, tenants, and employees have filed and won lawsuits against builders, landlords, and employers in the US, because of exposure to radon gas. Encourage your clients to learn about radon. If your buyer clients tell you they want a home with low radon levels or radon mitigation already in place, it is your duty to help them find a property that fits their needs.
If your buyer clients purchase property that hasn’t had a radon test or mitigation, encourage them to proceed with a test within 90 days of possession regardless of whether there is a holdback. Knowledge is power, and radon is a solvable problem.
Commercial and rental real estate
Commercial real estate professionals and property managers should also talk to their clients about radon testing and mitigation.
Property management professionals have a greater onus to discuss radon with their clients, as tenant health is a legal matter under the Public Health Act and Residential Tenancies Act.
Because the due diligence or condition period on commercial real estate transactions is considerably longer than in a residential transaction, it’s not unusual for commercial purchases and leases to include radon testing as a condition. However, commercial properties, particularly larger ones, might require expensive mitigation, far beyond the cost of mitigating a home.
Additional resources on radon:
The Canadian Real Estate Association: A Home Owner’s Guide to Radon
Canadian National Radon Proficiency Program
Participate in a Radon Study through the University of Calgary