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   ARTICLE   |   From Scotsman Guide Residential Edition   |   April 2008

Meth Labs: Getting Clean

Help your single-family investor clients understand what’s involved in meth-lab-property cleanup

Meth Labs: Getting Clean

A serious environmental concern is adversely impacting single-family deals and those for other properties nationwide. We’re not talking about radon. We’re not talking about mold. We’re not even talking about leaky underground oil tanks. We’re talking about meth.

The illegal street drug methamphetamine and its manufacturing process are quietly ravaging the environment while the drug itself is wreaking havoc on the health of those who abuse it.

A growing number of homebuyers, real estate investors, mortgage brokers and lenders have felt meth’s effects without ever touching the stuff. That’s because contamination from the drug’s production lingers in a property long after a lab is shut down -- and production generates six pounds of hazardous waste for every pound of drug produced.

Former meth labs must be treated as potential hazardous-waste sites and cleaned up accordingly. Further, because about half of all residential meth labs are found on rental proper- ties -- including single-family homes, according to the Washington state Department of Health -- investors are often stuck paying for cleanup.  In many cases, cleanup costs exceed the home’s value.

What’s more, because meth production is a criminal activity, insurance typically doesn’t cover the cleanup. Property-owners also can incur civil penalties, property damage, declines in property value, loss of cash flow if the building is shut down and a potential loss of valued tenants.

Brokers who understand what goes into cleanup of former meth labs and what’s required can best help their clients who are considering purchasing these properties.

Meth the menace

On the Web

For more information about methamphetamine and meth-lab cleanup, check out these sites.

By now, most people are familiar with meth -- an addictive drug associated with increased burglaries, domestic violence, child neglect, and an increased demand for social and medical services. According to the National Association of Counties, methamphetamine causes more drug-related local law-enforcement issues than cocaine, marijuana and heroin combined.

For some manufacturers, the illegal drug is profitable. Manufacturers who invest $100 in supplies can make about 10 times that amount on the finished product.

In turn, meth labs have become a national epidemic. The National Clandestine Laboratory Database reported 5,080 meth incidents -- including laboratories, dump sites, and chemical, glass and equipment seizures -- in 2007. Labs have been found in homes, apartments, garages, outbuildings, campers, hotel rooms and even cars. Rural, city and suburban areas have been affected.

The meth-making process involves chemicals and vapors that harm human health. Some of the substances used are dangerous, even lethal, when they come in contact with skin or are inhaled. Others react violently when heated, mixed, submerged or exposed to air. The risk of explosion is great.

People exposed to the drug-creating chemicals -- particularly meth “cooks” and first responders -- can suffer various health effects before, during and after drug production. Short-term exposure can lead to fatigue, headaches, nausea, coughing, chest pain and dizziness, a lack of coordination, chemical irritation, and burns. High toxicity also can lead to death.

Harmful chemical residue from the meth-making process also can remain for years on surfaces such as floors, countertops, carpets and drapes and in fixtures such as sinks, drains and ventilation systems. This is dangerous for a property’s residents, especially children. Long-term exposure to these residues, even at low levels, may result in kidney or liver damage, neurological problems and an increased rate of cancer.

In many states, the affected home or building itself must be remediated before anyone can buy, rent or occupy the structure. Contaminated soil and water also must be addressed. This is because meth cooks often dispose of toxic byproducts and chemicals in household drains and wells, streams, rivers, fields, sewage systems or the soil, where they can remain for years. This poses a long-term environmental hazard.

When encountering a meth-lab property in a transaction, check your state laws to see what issues must be addressed before the property is occupied.

The cleanup process

After the criminal investigation on a meth-contaminated property, cleanup can begin. There are no federal guidelines for remediating a meth lab, but cleanup is typically accomplished in four stages:

1. Preparation: An environmental contractor will conduct predecontamination sampling to define the extent and magnitude of contamination. The contractor will then complete an inventory of items to be disposed of or cleaned, which helps track the project’s status and guide postsampling activities. Next, the contractor will photograph the structure’s interior and any personal property to document the before-and-after status in the closure report. Finally, the contractor will prepare a decontamination work plan based on the findings.

2. Decontamination: This phase begins with disposal of porous items that cannot be cleaned -- such as carpeting, padding and all other upholstered or cloth items. Items that others may be tempted to reuse, such as furniture, are dismantled before being placed in Dumpsters.

Cleanable items and surfaces are vacuumed with a high-efficiency-particulate-air vacuum to remove obvious dirt and dust. Then all walls, ceilings, floors, glass, woodwork and cabinetry (inside and out) are double-washed and rinsed to remove or reduce the presence of methamphetamine and chemical residues. Decontaminated personal belongings are typically stored onsite in designated “clean” areas pending project completion and postdecontamination sampling.

The floor decontamination can be completed with a power washer. If the structure has a textured ceiling, it will be sprayed with two coats of high-quality paint to seal in contaminants. It can be completely scraped to remove residue that might cause future liability.

Plumbing and forced-air-ventilation systems are assessed and cleaned. Appliances are evaluated for staining or visible contamination and are discarded if they cannot be cleaned.

3. Restoration activities: Even after diligent cleaning, low levels of residual contamination may remain onsite. For this reason, impacted ceilings, walls, trim and doors are painted before reoccupation. Painting ensures that remaining meth residue is encapsulated to minimize future contact exposure.

4. Post-decontamination sampling: Following decontamination and restoration activities, post-cleanup sampling verifies the cleanup’s success.

Some environmental consultants will sample for volatile organic compounds if they believe waste material was dumped on the ground. This is common. In addition, most public agencies require testing septic systems if there is reason to believe the waste was illegally dumped.

Cleanup isn’t cheap. The Drug Enforcement Administration (DEA) estimates that it costs approximately $3,000 to $4,000 to clean up a former “small-time” meth lab; the cost for larger sites can be in the six-figures.

Regulators’ Actions

Given the host of environmental problems surrounding clandestine drug labs, state agencies are developing regulations that protect the public from meth-lab residue. Several states have voluntary guidelines for meth-lab cleanup, and a handful of state legislatures debated new requirements for cleanup standards and databases to alert the public that a property was once a meth-lab site.

Often, if a regulatory agency seizes a lab, it will notify the local health department as well as the county clerk’s office so that notices can be attached to the affected property’s records. Depending on the state, there may be laws prohibiting anyone from using a building that served as a meth lab -- a situation that can adversely impact lenders and investors.

Meth labs have also garnered federal attention. In March 2005, the National Multi Housing Council and the National Apartment Association called on Congress to develop mandatory remediation standards for cleaning up clandestine drug labs. They argued that in the absence of science-based cleanup standards, property-owners risk being held liable for cleaning up residual contamination.

The federal Methamphetamine Remediation Research Act of 2007, which President Bush signed into law this past December, authorized a federal research program to examine the health effects from chemicals used in meth production. It will establish voluntary guidelines to help state and local governments with clandestine-drug-lab cleanup.

All parties beware

Although the laws governing meth-lab disclosure vary by state, brokers, lenders, homebuyers and investors can be proactive no matter where they’re located.

One way to reduce risk is to research local police records of a suspected meth property. If records show the property has no history of police responses, the risk of an unlawful activity occurring at the site is low.

Local law-enforcement agencies also can confirm if a seizure of chemicals took place on a specific property. The county health department or the state’s health department may have relevant information, too, as will neighbors. For instance, neighbors can notice red flags such as:

  • Blacked-out or boarded-up windows;
  • Frequent late-night activity;
  • Excessive traffic;
  • Heaps of trash;
  • Little or no mail delivery;
  • Little or no furniture;
  • Surveillance cameras;
  • Guard dogs; or
  • A strong odor of solvents.

Finally, investors and lenders can order neighborhood environmental reports through home inspectors.

An effective way for brokers to ease potential borrowers’ concerns about buying a home that was a former meth lab is to have the property tested by an experienced environmental contractor. Someone qualified in meth analysis can confirm that cleanup was adequate and that the property is clean or has been cleaned.

In addition, it is important to note that any property associated with an enforcement action related to former meth-lab activity has the potential for environmental contamination in any drainage system on the property as well as in surface water bodies. That’s because when a state drug-enforcement agency acts on a clandestine drug lab, it will dispose of chemicals and byproducts found at the property. But it may not address environmental issues regarding leftover chemical residue, potential groundwater contamination and toxic fumes that linger after the lab has been shut down. If left unaddressed, this residual contamination can cause more problems for the homebuyer or property investor down the road.

•  •  •

In the past five years, there has been an increase in meth-lab manufacturing, but the news isn’t all dire. Efforts to fight meth abuse on the federal and state level through education and legislation largely have been working.

According to the DEA, workplace meth use is down. Workplace drug tests from 2006 show a 45-percent decline in meth use among employees nationwide since 2004. And meth use among eighth-, 10th- and 12th-graders has plummeted 50 percent since 2001.

If these suppression methods continue to serve their purpose, perhaps one day in the not-so-distant future, property investors and homeowners won’t have to worry whether or not the property they’re about to purchase has been moonlighting as a meth lab. In the meantime, the more you know about what’s involved in cleaning up these properties, the better you can help your clients be prepared.


 


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