Environmental Issue Protection

[Frank Slezak]

I recently inherited a duplex home in Hazleton, PA. The home is in an area where allegedly three gasoline stations leaked gas into the ground for a number of years. (Note: The area has no wells and depends on city water.)

EPA discovered gas, toluene and benzene odors in several homes located near the gas stations during the last year and a half. EPA is working to remediate the area by (1) installing new sewer lines in the area (the old one's were porous and allowed the raw gasoline to flow into the sewer lines and the odors vented into homes) and (2) using sophisticated equipment to "suck out" contaminated groundwater in the area. EPA predicts that their work will be completed in early November.

Besides being contaminated, the area is obviously stigmatized. Local banks will not lend money for potential buyers of these homes.

It appears that my only option is to rent out the two units in this home. However, I have been warned that if anyone that lives in this home became sick, they would have the right to sue me.

My intent is to provide full disclosure of all EPA readings to potential tenants (the home received very low readings compared to many homes in the area).

Is there any way that I can rent out this property and limit my liability???

 

[FarmerJ]

speak with a lawyer also to see if something like a air exchanger system to help the homes furnace and other gas burning applainces might work to lower your risk as you know many homes in winter zones had been re insulated and that has caused problems with the homes not having enough air for gas appliances . Perhaps a air exchanger system might be the answer BUT again speak with a lawyer who has knowledge in environmental law and law suits to get the best direction on this .

 

[abezon]

Also speak to an insurance agent about a liability policy that would cover a tenant lawsuit.

Given the known problems, I recommend you incorporate (S corp will do) and transfer ownership of the house to the S corp. That way, if the tenant sues you, the only thing T can get is the rental house. Be sure to see a lawyer about this to make sure you have a good lease and that you "observe all the corporate formalities" so that your personal assets are protected.