What are an agent’s duties when elevated radon levels are detected?

QUESTION: My seller-client entered into a contract to sell her property. During the due diligence period, the buyer ordered a radon test. The Radon Level Report has a summary page showing an average radon concentration level below the EPA Action Level of 4. However, the report includes a graph showing hourly concentration levels, and some of those hourly levels were over 4. The buyer decided to back out. Is the seller now required to install a radon mitigation system? And are the reported radon levels a material fact that either the seller or I have to disclose to future buyers?

ANSWER:  The answer to your first question is no. In order to reduce the risk of lung cancer, the U.S. Environmental Protection Agency has established a recommended “action level” for homes with an elevated radon level. Specifically, the EPA strongly urges that homeowners take measures to mitigate the radon levels in their homes if the average interior radon level exceeds 4.0 picocuries per liter of air. In your case, since the average radon level is below 4, the EPA’s recommended action level has not been triggered. Furthermore, while the EPA has issued recommendations regarding radon mitigation, there are no federal or state laws mandating such action by homeowners.

The answer to your second question is also no. As for your seller, agents are likely aware that radon is one of the topics addressed in the Residential Property and Owners’ Association Disclosure Statement (the “RPOADS”). Paragraph 25 of that form asks whether the owner has actual knowledge that there are hazardous substances affecting the property, such as radon gas, which exceed government safety standards. As with virtually all the questions in the RPOADS, sellers can always choose to answer that question by checking the no representation box. In your case, since the average radon level did not exceed the applicable government standard (the EPA action level), you can advise your client that “no” would also be an acceptable answer.

As for your obligation, the North Carolina Real Estate Commission has made it clear that if a broker knows – or reasonably should know – that a property’s radon level meets or exceeds the EPA’s action level, the broker must disclose that fact to all clients and to all other parties to a transaction. This obligation applies to both sales and lease transactions.

The EPA has written that because radon levels tend to vary from season to season and from day to day, a short-term test is less likely than a long-term test to reveal the “year-round average radon level.” In fact, radon levels can vary dramatically from hour to hour. Factors that influence radon levels include heavy rains, strong winds and temperature. In hot weather, radon decays more quickly and interior radon levels decrease. In contrast, heavy rains cause interior levels to increase. Because of these variations, the EPA’s Home Buyer’s and Seller’s Guide to Radon states that all radon tests should be taken for a minimum of 48 hours. A copy of that guide is available here. It is the average level of radon detected over the testing period that determines whether the EPA’s action level has been triggered. Under the Real Estate Commission’s guidance, if the property’s radon level meets or exceeds that action level, it is a material fact that licensed agents must disclose.

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