How to handle real estate negotiations when dealing with radon gas in Calgary
In real estate, several factors can impact the value of a Calgary property. Some of these factors are visible (patent), and some are not visible, but equally important (latent). Radon gas is a colourless, odorless, tasteless gas that is the product of uranium decay. Uranium occurs naturally in the soil and rock formations. Radon seeps up through the ground and finds its way into many Calgary and area homes. Alberta has some of the highest levels of radon in the country.
The problem with radon is that it is a radioactive gas that is the second leading cause of lung cancer. Exposure to dangerously high levels radon gas has quietly lead to various health ailments, and Calgary home buyers and sellers are starting to discuss radon gas in more detail when it comes to a real estate transaction.
There is a leading research team at The University of Calgary lead by Dr. Aaron Goodarzi that is working to improve the public knowledge of radon gas and provide solutions for homeowners. Find out more about radon at Evict Radon.
Here is the good news, the damaging effects of radon gas is preventable with radon mitigation in your house.
Testing for Radon
Testing for radon can be done with an “alpha track” device. This hockey puck size device is put in your house in an area that people typically spend more than 4 hours per day. It should be completed for 90+ days in the winter. It is particularly important if people are living in the basement and/or if there are children in the house.
The reason for the winter test is in the summer months, doors and windows are open and more circulation occur which could lead to a false negative result.
Radon is measured in Becquerels (Bq) per meter cubed in the room (Bq/m3). In Canada, 200 Bq/m3 is considered the maximum allowable amount while the World Health Organization recommends 100 Bq/m3 . If radon levels exceed 200 Bq/m3 then it is recommended that the homeowner take steps to mitigate the radon.
Radon mitigation is a relatively simple process and should be conducted by a certified radon mitigation technician that is recognized with C-NRPP (Canadian National Radon Proficiency Program). The process usually costs between $3,000 -$5,000 depending on what is required. If the home does register above 200 Bq/m3 then it is recommended to have the home mitigated, however, you may want to do it quite quickly if:
1. There are kids, babies or aging adults living in the home
2. If there is someone who works from home or spends most of their time in the home
3. If anyone in the home has a family history of cancer
4. If there is a former smoker in the house
Real Estate Disclosure and Radon
Ok, so you have found out you have higher than normal levels of radon in your house, do I need to disclose this if I plan on selling my Calgary home?
Yes, high levels of radon gas are considered a Material Latent Defect.
Material Latent Defects are physical defects that are not visible by reasonable inspection and it makes the property dangerous to live in, unfit to live in, is an expensive repair for a buyer. Material Latent Defects can also be a known lack of permits.
What if I choose to not disclose my high levels of radon in my sale?
Your REALTOR will decline to provide you with service as this contravenes the exclusive seller representation agreement and the purchase contract.
If you have a Material Latent Defect, you are required to disclose this to the buyer.
Doesn’t it make more sense to not test for radon?
There is no requirement for you to test for radon before you list your home for sale in Calgary. However, a buyer may ask if you have had a radon test, and your real estate agent is not permitted to lie.
If you have not tested for radon, the buyer may decide to pursue another property, the buyer may negotiate a term to holdback funds for a test to be completed, or the buyer try to renegotiate a lower price.
Can I, the buyer, make my purchase conditional on a radon test?
Yes, you can make it a condition to the sale, however, since the test requires 90+ days to complete and ideally in the winter months, it is unlikely the seller will agree to such a lengthy condition. There are a few potential solutions for this:
1. Draft in a holdback clause to have your lawyer withhold a certain amount of the funds until the test is completed. The amount would likely be the amount it would cost to mitigate the radon if found.
2. Negotiate a price reduction to take on the risk of potentially high radon levels.
3. Pursue another property.
Will high radon levels lower my property value?
Not necessarily. If you have high levels of radon and you take steps to mitigate the radon, your property value should remain the same or it could rise as you have taken extra precautions with your property.
When a buyer notices that a seller has cared for the property and has gone beyond that of a standard seller, the buyer can be willing to pay a premium for this property.
Do I have to disclose my high radon levels if I have mitigated the radon gas?
No. Once your Material Latent Defect has been repaired, you no longer need to disclose your previously high levels of radon.
In Calgary, radon gas levels are higher than in many other areas. This colourless, odorless gas causes DNA damage and is the second leading cause of lung cancer. Testing for radon is usually done with a 90+ day alpha track test kit and your levels should be below 200 Bq/m3 . If your levels are above 200 Bq/m3 , you will mitigate the radon. In real estate, radon testing is becoming more common and more buyers are asking if the seller has completed a radon test. Ask your REALTOR for more information regarding negotiations when it comes to radon and real estate.