Home Based Meth Labs Pose Threat To Homebuyers, Investors, Foreclosing Lenders Alike

An article in DSNews.com (formerly REO Magazine) addresses the problem that clandestine meth labs pose to unsuspecting homebuyers, real estate investors and foreclosing mortgage lenders:

• Unfortunately, it may be difficult for a potential buyer to know that a property has been used as a clandestine lab. Even if an interested party is aware that a property has been used as a lab, they may not understand the health and monetary risks associated with it. It is essential that parties involved in real estate transactions be knowledgeable about identifying labs, the health effects associated with meth labs, state remediation and disclosure guidelines, and the costs of rehabilitating a property to avoid a toxic pitfall.

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• The cost of decontaminating a property can range from several thousand dollars to tens of thousands of dollars. Large labs that produce speed by the pound, rather than by the gram, can exceed $100,000 in clean-up costs. When Arizona law enforcement busted a super lab in Mohave County it took only several days to clean the site. But the cost to remove the contaminated soil, dispose of left-over chemicals and tear down the structures on the property was more than $100,000. Even a small time operation can run into the tens of thousands of dollars. A local Colorado savings and loan discovered that a home it had loaned money on left enough toxins to cost $30,000 to $40,000 to remediate. The amount remaining on the loan in addition to the clean-up cost put the bank upside down on the property value, leaving the bank with the option to demolish the home and sell the lot for $10,000, or abandon the property.

For more, see Attorney Warns REO Community About Meth Labs.

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