The newly enacted Minnesota Radon Awareness Act becomes effective January 1, 2014. The Act requires sellers of residential real property in Minnesota to make certain disclosures pertaining to the seller’s knowledge of radon levels within the residential dwelling. Disclosure is required for both newly-constructed and existing homes. Failure to comply with the detailed requirements of the Act may subject sellers to civil liability and could possibly lead the invalidation of the transfer by a court.
Radon is a colorless, odorless radioactive gas produced by the natural decay of uranium in nearly all soils. When inhaled, the radon gas releases radioactive particles that can damage the cells that line the lungs. Long-term exposure to radon gas can lead to lung cancer. High levels of radon exist in nearly every state in the United States, including Minnesota. In fact, according to the Minnesota Department of Health, radon levels that pose a significant risk to human health can be found in one in three homes in Minnesota. Nearly 80% of Minnesota counties are rated as “high radon zones.”
The Minnesota Radon Awareness Act applies only to transfers of residential real property. Residential real property for purposes of the Act includes single family homes and units in Common Interest Communities, such as condominiums and town homes. The Act applies to most agreements and contracts that will result in the transfer of title of these properties. This includes transfer of title by sale, exchange, deed, contract for deed, a lease with an option to purchase, or any other purchase option. However, there are exceptions to when the Act applies. For instance, the Act does not apply to transfers by gift, foreclosure or deed in lieu of foreclosure, transfers upon death, and transfers made between certain family members or between spouses resulting from a divorce decree or settlement agreement.
The Act requires that before signing an agreement to sell or transfer residential real property, the seller must make certain disclosures, in writing, to the buyer. The seller must disclose any knowledge that the seller has of radon concentrations within the dwelling, including any records or reports that the seller has pertaining to radon concentrations. The disclosure must include:
- Whether radon testing has been performed.
- A description of any known radon concentrations.
- A description of any mitigation or remediation efforts taken to reduce radon concentrations within the home.
- If a radon mitigation system has been installed in the home, a description of the system and any relevant documentation.
- A “Radon Warning Statement,” that includes the specific language provided in the statute.
The seller must also provide the buyer with a copy of the Minnesota Department of Health publication, Radon in Real Estate Transactions. Notably, the Act does not require or mandate radon testing within the residence.
The consequences for failing to comply with the requirements of the Act can be serious. If a buyer is injured by a failure to make a required disclosure and the seller is aware of material facts about radon concentrations in the home, the buyer may bring a civil action against the seller to recover damages and other relief. This action must be brought within two years after the date of the transfer. Also, although the Act provides that the transfer will not be invalidated solely for failure to make the required disclosures, the statute leaves open the possibility that a court may invalidate the transfer on this basis. Whether courts will actually do so is uncertain, and will likely require further clarification by the judicial system or the legislature.