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“Meth” Houses

No, it’s hardly a “dream listing”, but imagine for a moment that you have just listed, knowingly or unknowingly, a former “Meth” house or lab – a place where methamphetamine, a highly addictive, controlled substance was illegally manufactured.

Or, imagine you are a licensee and property manager or agent for an owner or asset management firm and are managing such a property.

The walls of the property once witnessed the mixing and “cooking” of a witch’s brew of harmful chemicals required to produce methamphetamine. Those same walls, along with the plumbing, air vents, filters, furniture, appliances, carpets, draperies and other household components, quite likely absorbed its vapors and may still bear its splatters and spills.

Perhaps, gases and fumes from the toxic by-products of the manufacturing process exploded or caught fire, scattering contamination in a wider swath about the property. Even if nothing of such magnitude occurred, the production of just one pound of “meth” on the property could have created five to seven pounds of hazardous waste including hydrogen chloride gases. As so often happens, these wastes may have been dumped on or around the property, and in nearby rivers and streams. The septic system, well, ground water, soil and other environmental elements may have been too contaminated for safe use.

* * * *

If this scenario sounds “far-fetched,” think again. There were 322 “meth” lab “busts” in 2004 in North Carolina, up from 177 in 2003 and nine four years earlier, according to the State Bureau of Investigation. Through April 11 of this year, there have been 121.

Once a site is cleared of illegal activity and under the control of the state, law enforcement officials post a notice on the property that it was used as a “clandestine methamphetamine laboratory”. The local health department is notified, which in turn informs the property owner or agent that the site must be vacated and that “a responsible party” is required to “remediate the property”.

Clean-up is generally possible, but may be expensive, depending upon the level of contamination.  Even after cleaning, some contamination may be left on surfaces, in absorbent materials such as carpet and furniture, and in sinks, drains, and ventilation systems. Lingering contaminants may pose health threats, including respiratory problems, skin and eye irritation, headaches, nausea, and dizziness. Because of the potential risk, more extraordinary remediation measures are required.

What is a real estate agent to do? First, it is important to know the law and rules concerning “meth” houses.

North Carolina law makes the manufacture of “meth” a Class C felony, and prohibits related criminal activity surrounding its manufacture, distribution, and sale.

This year, at the request of North Carolina Attorney General Roy Cooper, legislation was introduced to limit public access to pseudoephedrine, a primary ingredient in the manufacture of methamphetamine, by requiring that it be sold behind the counter in pharmacies only, and that buyers be required to register their purchases.

In addition, under a new state mandate, the Department of Health and Human Services (“DHHS”) created rules establishing decontamination standards for certain properties to assure they are reasonably safe for human habitation. The law requires compliance with these decontamination standards by the property “owner, lessee, operator, or other person in control of a residence or place of business, and who has knowledge that the property has been used for the manufacture of methamphetamine….”

The DHHS rules require a “responsible party” to:

• Perform a pre-decontamination assessment to determine the level of contamination and scope of remediation;

• Decontaminate the property; and

• Document the assessment and remediation.

The documentation must be retained by the local health department for a period of three years.


Licensee’s Duty


Next, licensees should learn how the law may impact them.

Property managers and other licensees may be viewed as persons “in control of a residence or place of business” under the DHHS law and rules. If so, this could create heightened responsibility for licensees with regard to decontamination. However, the law is unclear concerning the extent of responsibility a property manager or agent might have, if any, especially compared with that of the actual owner or lessee.

As a licensee, you are required to disclose material facts concerning a property when you are, or should be, aware of them.

Because properties used as “meth” labs may have potential lingering health consequences and responsible parties must undertake clean-up and reporting, the prior use of a property as a “meth” lab is material.  However, it is also important to remember that your duty to disclose only arises when you know, or reasonably should know, that the property was once used as a “meth” lab.  As with all issues concerning material facts, whether an agent reasonably should have known that a property once was a “meth” lab must be evaluated on a case by case basis.

At this time, the Commission does not require licensees to check with the county health department, local law enforcement officials, and the SBI, each time they list a property to see if decontamination or criminal records exist indicating the property was once used for the manufacture of “meth”. On the other hand, licensees who encounter properties they know or should know were formerly operated as “meth” labs should make inquiries to determine the status of the property.

If the inquiry reveals that remediation is complete, no disclosure is required, assuming that clean-up has been properly documented.

The problem of illegal manufacture of methamphetamines is growing, and the state has responded with new laws and rules. Licensees encountering properties that they suspect may have been used as a “meth” lab should take care to stay informed about the law.

This article came from the May 2005-Vol36-1 edition of the bulletin.