Question

The Thompson family purchased a rural house and lot in the country. Next to their lot, Carlton Fuels Ltd. had operated a gas station for many years. The gas station had closed down 5 years earlier and the fuel tanks had been removed from the ground.

Two years before the Thompson family purchased their house and lot, the lot where Carton Fuels had been located was sold to a plumbing supply company that used the buildings and grounds to store plastic pipes and other non-hazardous supplies.

Some time after the purchase of their home, the Thompson’s began to notice a strange taste and odour in their drinking water. The water came from a well on their property. A test on the well indicated that the water was contaminated with gasoline.

1. Advise the Thompson’s of their rights and who, most likely, will have to pay for the clean up of the land.
2. If the Thompson’s stop paying their mortgage, the bank will take over the property. What should be bank be concerned about in this case?

Answer 1

Answer 1)

The Thompsons sue the previous owner of the land for "No Seller Disclosure". This basically means that the seller did not disclose the necessary details that he or she is require to disclose by law. A home owner or a land owner in the United States is required to disclose any hazards, potential repairs, leaks or water damage prior to selling the home or the land lot. While the previous land owner can always contest by declaring that he or she wasn't aware of the presence of Gasoline in the well water, the Thompsons could always argue that the previous land owner couldn't have possibly missed the presence of gasoline from the past five or even two years.

The Thompsons can also sue the Gas Station's holding company or it's registered company for violating the RCRA or the resource conservation and recovery act which has strict guidelines on disposal of hazardous waste, proximity of sewage , fuel and waste lines to water bodies and water pipelines. However this is assuming that the holding company is still solvent. This would be a long and a difficult trial, while suing the previous owners for No Seller Disclosure would be a far more easier route to go about this problem.

Answer 2)

While the bank cannot hold the Thompsons accountable because the bank usually sends a property auditor to inspect and examine the property prior to sale, the onus of due diligence lies with the bank, not with the Thompsons. So making the Thompsons pay for the damages would not be a course of action that would help the bank. If the Thompsons stop paying their mortgage and the bank takes possession of the house, their primary concern would be the devaluation of the property. They'll have to discount the cost of repairs or the cost of cleaning up and refilling the well water and they'll have to inspect the neighbouring plot They'll also have to re appraise the property.