In today’s real estate practice, environmental issues like asbestos, mold and radon have become commonplace discussions. Recently, however, the term “meth lab” has been creeping more and more frequently into the world of real estate.  According to the Wisconsin Department of Justice, the incidence of methamphetamine (meth) production is relatively low in Wisconsin when compared to other states; but it is on the rise. 

Meth is a ma-made amphetamine, produced and sold illegally in the form of pills, powder or chunks. Common street names for meth include “speed,” “crank,” “ice,” “glass” and “crystal.” Homemade meth is produced in makeshift labs set up in homes, apartments, hotel rooms, mobile homes or other buildings. Although the ingredients used to produce meth are readily available, many of the chemicals used in the “cooking” process can be harmful. Short-term exposure to high concentrations of chemical vapors in a functioning meth lab can cause severe health problems or even death. For this reason, meth “cookers,” their families, and first responders are at highest risk of acute health effects including lung damage and chemical burns to different parts of the body. Unsuspecting people can also touch residues of meth and have symptoms similar to those experienced by meth users.

The “cooking” process to make meth may release toxic gases and hazardous waste materials in the lab and throughout the building. There have been reported cases of illness resulting from lab residue and some reports of structural property damage have been documented. This contamination needs to be cleaned up, and any sanitation, electrical and other safety hazards must be addressed. The Department of Public Health recommends that environmental companies that specialize in hazardous material cleanup undertake any meth lab remediation.

Once the main chemicals related to the former lab have been removed, the health department is typically called in to assess the property for hazards and long-term exposure risks from residual chemicals. The Department of Natural Resources may also be called in to assess any environmental impacts from chemical spills or improper waste disposal. When listing a property that has been used to manufacture meth, the broker should see if any reports from these agencies are available to use as a disclosure document. There are no pre-determined, acceptable levels of cleanup inside a building or home for the many chemicals associated with meth labs. Thus, testing can be done after cleanup, but at this time the Department of Health and Family Services does not recommend it.

Due to the rising concerns relating to meth labs in Wisconsin real estate, a bill has been proposed that would require residential sellers and landlords to make specific disclosures regarding the manufacturing of methamphetamine on the property. On March 11, 2010, Assembly Bill 836 was introduced, proposing the modification of two state statutes to include such disclosures: Wis. Stat. § 704 and Wis. Stat. § 709. 

The proposed change to Wis. Stat. Chapter 709, Disclosure by Owners of Residential Real Estate, would include an additional item to the Real Estate Condition Report (RECR). The RECR is required of sellers of properties that contain one-to-four dwelling units, subject to certain exceptions. The additional item, 17m, would be included to read, “I am aware that methamphetamine has been manufactured on the property.” 

Wis. Stat. Chapter 704, Landlord and Tenant, would create the new subchapter of § 704.47. The language of 704.47 would read: “Disclosure of methamphetamine manufacture (1) If a landlord of residential rental property is aware that methamphetamine has been manufactured at any time on the rental property, before entering into any rental agreement with a prospective tenant of the rental property or before the commencement of any periodic tenancy or tenancy at will with respect to the rental property, the landlord shall disclose to the prospective tenant in writing that methamphetamine was manufactured on the property. (2) If the rental property contains more than one dwelling unit, the landlord is required to provide the disclosure under sub. (1) Only to a prospective tenant of the dwelling unit in which the methamphetamine was manufactured.”

The disclosure would be required on the RECR and tenancies and rental agreements as of the effective date established in the bill. A property owner who has furnished a RECR to a buyer before the effective date would not need to amend the RECR to add this disclosure. The bill was not passed this legislative session, but will be revisited in January 2011.

The following are signs that meth may have been manufactured in a property:

• Yellow discoloration on walls and other surfaces.
• Taped-off fire detectors.
• Symptoms such as burning eyes, an itchy throat or a metallic taste in the mouth while in the property.
• Strong odors similar to solvent, cat urine or ammonia.
• Presence of security cameras or other surveillance equipment.

If the seller does not disclose the property’s history, REALTORS^® should generally disclose the current or prior presence of a meth lab on the premises as information suggesting the possibility of a material adverse fact and recommend that the parties obtain expert assistance to inspect or investigate. The broker can contact local law enforcement or the health department. The property could be tested.

For additional resources regarding meth lab clean up and identification, see:

• The “Cleaning Up Hazardous Chemicals Meth Labs” fact sheet: click here.  
• The Minnesota Department of Health's Meth Lab Program: click here. 
• The National Association of REALTORS^®’ “Field Guide to Meth Labs”: click here. 

Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.