Radon mitigation is integral to keeping properties safe and meeting health standards in real estate transactions. When radon gas builds up inside a home, it creates health hazards. Buyers and sellers must carefully balance radon levels in their property-related discussions. This blog will help you understand the factors that help buyers and sellers make choices about Radon testing during the real estate transaction.
Basics of Radon in a Real Estate Transaction
Radon levels in a home can influence the real estate transaction, notably the negotiation and sales process. Extremely high Radon levels cause various issues for buyers, delaying the transaction process until the issue is resolved. Moreover, a professional Radon mitigation system adds value, but the discussion about who will pay to fix the Radon problem (if not already addressed) creates disagreement among property dealers. The Real estate process works well when the buyers and sellers are aware of the impacts and health effects of Radon and work it into the transaction amicably. This blog delves into the importance of the Radon mitigation system. It helps raise awareness related to the debate about payment of Radon mitigation between buyers and sellers.
What is a Radon mitigation system?
A Radon mitigation system reduces the levels of radon in a building. Radon comes from the decay of uranium that naturally occurs in the soil and leaks into homes through gaps at the base of the walls or the basement slab. Therefore, the radon mitigation system helps reduce the amount of Radon gas buildup indoors.
Classification of Radon Reduction Techniques
Active Sub-slab Depressurization,
This is the most commonly used method, which involves using a pipe and fan to draw the Radon gas from under the home and reduce the carcinogenic gas.
Sealing Cracks and Openings
Cracks and openings, which can appear in the foundation and walls, are sealed to minimize Radon intrusion; however, this is not the primary practice and operates more as a secondary function. Studies show that sealing gaps and cracks alone usually only reduce levels in the home by less than 25%.
Sub-membrane Depressurization
It is common in homes with crawl spaces. A polyethylene sheet must be placed over the soil to act as a membrane to contain the gasses, and a vent pipe and fan system must be used to pull the radon out to vent it outdoors.
Value Of Radon Mitigation System
Radon-induced lung cancer is one of the most life-threatening diseases, making Radon a life-threatening health issue. In real estate transactions, managing Radon issues guarantees compliance with safety standards and minimizes buyers’ skepticism. High Radon levels in a home are a latent material defect in many provinces including Alberta.
Benefits of Radon Mitigation System
Health Protection
A Radon mitigation system helps reduce the chances of high radon levels and respiratory disease. Reducing these levels makes the living environment much safer.
Market Appeal
A Radon mitigation system can be a potential source of attraction for home buyers as it eliminates post-purchase risks as the buyers already have a functioning Radon mitigation system installed in their homes. Testing every 5 years after a system is installed is advised by Health Canada and the C-NRPP.
Relevance in a Real Estate Transaction
A Radon mitigation system is a positive selling point for homes in areas prone to Radon (which applies to all of Canada!). It makes the home safer for the occupants and helps protect people from the risks of Radon related lung damage.
Activities in real estate transactions:
The responsibility of paying for the Radon mitigation system can be left to the property seller. The property seller might address the Radon concerns by installing the Radon mitigation system before selling the property. This is typical in markets with high competition, where sellers want to capture as many home buyers as possible and complete sales in a short period of time. If the seller fails to address radon matters, the home buyer can solve the issue for themselves. This occurs typically when buyers are more potent than sellers, so the latter are reluctant to offer assistance in resolving the issues related to the Radon mitigation system.
Domination and Distribution Costs
Sometimes, the buyer and the seller can split the cost, which is a win-win situation for both parties. This can also expedite the process if long term testing has been requested by buyers so the seller doesn’t have to wait for the results to come months later.
Radon Mitigation System Costs
Typical Costs of Installation
The price range for installing a Radon mitigation system depends on the property's size, construction, type, and whether the home has a sump pit or not. The national average mitigation cost in Canada is around $3500 with costs varying by province depending on service providers and sub slab materials.
Elements for Costs of Remediation of Radon
Home Layout and Size
This means that significant work may be required if one lives in a house with an interior mechanical room as piping may be required to go through finished spaces to exhaust to the outside of a home.
Radon Mitigation and Home Sellers
Liabilities of Home Sellers
Home sellers should generally solve Radon problems before putting the house on the market to avoid conflicts during the sale-purchase process. It is always a good idea to be one step ahead and assure potential buyers that a Radon mitigation system has been installed and works efficiently, making the property more attractive and safe.
Radon Mitigation and Home Buyers
Home Buyers Could End up Funding Radon Reduction
If the seller cannot or will not address the issue of Who pays for Radon mitigation, the buyer may have to pay the bill. However, a buyer can use the inspection results to secure a lower price and balance the chances of installing the Radon mitigation system. Radon testing is one of the areas that home buyers should request their home inspection professionals to carry out using a C-NRPP certified professional as a consultant. This is usually a shorter assessment of 96 hours with a long term test recommended after posession. Where a Radon mitigation system is needed, buyers must determine whether to negotiate for seller contributions or assume responsibility for the system post-closing.
Buyer and Seller Negotiation
This depends on the negotiation level between the buyer and seller and influences property sales, such as Who pays for Radon mitigation. The negotiation can be based on the findings of Radon levels revealed during the inspection or prior test results.
Buyer’s Responsibility
According to the governing bodies in Canada, if the Home is Untested or Test Results are pending, buyers can request a reduction in purchase price to account for the cost of a Radon mitigation system. Moreover, buyers can opt to conduct the long-term radon test after moving in and handle the mitigation if needed.
Conditional Offers
Buyers may include a condition in their offer requiring radon testing post-purchase. If levels are above 200 Bq/m³, they would then cover the cost of mitigation unless otherwise negotiated.
Holdback Clause
According to the government of Canada, buyers might request a holdback clause, where funds are set aside in trust for mitigation. In such cases, the buyer must check the test results and the agreement terms. This can not be a favorable situation with both buyers and sellers waiting several months after possession for the transaction to be finalized.
Seller’s Responsibility
Pre-Sale Testing and Mitigation
Sellers can test for Radon levels before listing the home. If levels exceed 200 Bq/m³, they can mitigate the issue before selling, which, as already mentioned, will effectively grasp the attention of potential buyers and make their home safe for the next owners. This does also shed light on a potential lung cancer risk in the current home owners if exposure was high over a prolonged period of time.
Price Adjustment
If the Radon levels are above the acceptable limit of 200 Bq/m³, then the sellers may agree to deposit the funds into the trust, and as a result, these funds will be released after the proof of mitigation.
Testing as a Condition of Sale:
If the buyer requires the test to be included in the offer, the seller must adjust the timeline and the price to accommodate the Radon mitigation.
Conclusion:
Unlike many other issues related to real estate transactions, the duty to mitigate Radon is very situation-specific. The parties involved must manage the process discretely and be open to negotiating. Therefore, testing for Radon before you sell your home is advisable. The property sellers must disclose such costs to close the deal with potential buyers. Due to safety concerns and to avoid communication gaps between buyers and sellers, the discussion related to the Radon mitigation system must be addressed. The question of Who pays for Radon mitigation is significant as whether it's the shared cost for the Radon mitigation or the buyer’s choice to install the Radon mitigation system; it must be the utmost priority to resolve the issue of Radon levels in the real estate transaction to eradicate Radon and make their property safe.
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