• Was Your Home Previously a Meth Lab
  • February 15, 2011 | Author: Stephen A. Schuller
  • Law Firm: GableGotwals - Tulsa Office
  • Recently CNN ran a tragic story of a young Pennsylvania couple who’d purchased their first home, only to find themselves unable to occupy it because of their physical reactions to the interior of the house - they had headaches, sore throats and breathing difficulties when they were in the house.  Upon investigation they learned that the house had been the site of a methamphetamine production facility - a “meth lab.”  That fact rendered the home uninhabitable, and further prevented them from being able to sell the house.  Their pre-purchase home inspection had failed to reveal the use of the home as a meth lab, even though the home was listed in the U.S. Drug Enforcement Administration’s National Clandestine Laboratory Registry as a methamphetamine production facility.  To make matters worse, the couple was looking at a $61,000 professional clean-up cost, and while they can’t live in the home, they nevertheless are compelled to continue to make their mortgage payments to avoid foreclosure.

    According to the CNN story, nothing in Pennsylvania law requires the disclosure of a meth lab in a home being purchased.  Oklahoma law, on the other hand, expressly requires the disclosure by a seller of the “existence of prior manufacturing of methamphetamine” in the home, as well as the “existence of hazardous or regulated materials and other conditions having an environmental impact,” to the extent the seller has “actual knowledge” of such conditions.  Oklahoma’s Residential Property Condition Disclosure Act [Oklahoma Statutes, Title 60, Chapter 16A (§§ 831 et seq.)], updated in 2003, requires the seller of a single family home or duplex to sign a written “property condition disclosure statement” and deliver it to a prospective purchaser before accepting an offer for the purchase of the property, and requires the purchaser to acknowledge (in writing) the receipt of the disclosure statement.  (An exception is provided for a seller who has never occupied the property and therefore makes no disclosure concerning its condition, but only if the seller also has no actual knowledge of any defect or problem that would otherwise be required to be disclosed.)  A 2003 amendment to the Disclosure Act added the “existence of prior manufacturing of methamphetamine” in the home as one of the components of the required disclosure.

    A seller’s failure to disclose such a matter in the “property condition disclosure statement” renders the seller liable only for actual damages, including all costs of repair; the recovery of exemplary or “punitive” damages is expressly prohibited by the Disclosure Act.  Any lawsuit to recover damages for the disclosure defect must be brought within two years after the date of the purchase of the property (that is, the date of the closing or “transfer” of the property), and Oklahoma case law construing the Disclosure Act has established that the two-year limitations period is not tolled or postponed by the purchaser’s simply being unaware of or not having discovered the defect.  The prevailing party in any such litigation is entitled to an award of attorneys fees and court costs.

    Real estate agents involved in the sale and purchase of a home are required to assist in obtaining the “disclosure statement” from the seller and making it available to a potential purchaser.  In addition, if the real estate agent knows of a condition or defect required to be disclosed, he or she has a duty to disclose it to the purchaser.  Failure to do so renders the real estate agent liable for disciplinary action by the Oklahoma Real Estate Commission, as well as liable for the purchaser’s actual damages, attorneys fees and court costs.

    Had the Pennsylvania couple’s new home been in Oklahoma, their seller would have been obligated to disclose the meth lab (if the seller had “actual knowledge” of it), and if the seller failed to do so, the couple would have been able to recover their damages, including the clean-up cost, plus attorneys fees and court costs.