What's a Meth Lab Got to do with Real Property?
Who needs to be interested in meth labs once the crooks are caught?
Recently, several state legislatures have been involved in debating or preparing proposals to designate pseudoephedrine as a prescription-only drug. The South Carolina legislature might be the latest one. Read full article here
There have been numerous reports about the increase in meth labs in some states like South Carolina. Other states, like Mississippi have experienced a decrease in these labs which they attribute to the changed requirements of having a prescription to obtain pseudoephedrine.
Once the labs are discovered, then the issue of clean-up arises. Sources indicate the cost in South Carolina was $1.8 million spent by the State for clean up since 2011. This should be expected to rise given the increase in meth lab activity seen by law enforcement.
These clean-up issues must be considered by every component of the real estate market; from lenders to realtors to buyers to sellers to contractors to home inspectors. There is no indication that the clean-ups performed by the State are going to be cost effective for re-sale purposes or if they will only be enough to remove hazardous materials. The property may require further rehabilitation for placement into the retail marketplace. Folks involved with these properties will need to consider consulting with appropriate counsel to be sure these issues do not creep into a closing and stop a sale.
Read Roy Shelley's September 2012 post on the possible liability associated with these properties HERE
I was recently asked to speak with a local Leadership chapter about what current and future business leaders need to know about environmental issues. Of course, the easy answer was “my phone number.” (which is 803.744.1818, btw.) But I had 20 minutes to fill, so I addressed the broad topic, “big picture” issues: Climate Change and Sustainability. Here is a thumbnail of my talking points.
Climate change: Climate change is real, despite what politicians and talking-head ratings addicts may say. (The political debate is over whether man has caused or accelerated it – or more accurately, whether we can do anything about it now.) The business implications are also real. For one thing, the insurance industry has been tracking climate change for over a decade, and is already using climate risk in underwriting decisions. The location of your facilities and the type of business have always been key factors in insurance cost and coverage (e.g., exclusions), but climate change is an increasingly large factor in these decisions.
(The good news in the insurance arena is that coverage for environmental issues not directly related to climate change – e.g., good ol’ fashioned contamination & toxic tort issues – is more available than ever. National carriers and specialty carriers now have sufficient experience to underwrite just about any environmental risk, and competition is driving prices down.)
Sustainability: Again, another politically-charged topic. But don’t think of it as “going green” - think of it as saving money (“making green”). Any business has Inputs & Outputs, and many are subject to cost-pressures based upon their effect on the environment. The cost of non-renewable raw materials (minerals, fossil fuels, etc.) will increase in the long run, as will the cost of waste streams. The leader of any business should think of the big picture “input & output” costs not only in terms of today’s dollars, but also in terms of the cost trends created by environmental concerns.
Leaders are not expected to know all the answers. But they are expected to ask the right questions. Know the big picture environmental issues so that you can do so.