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Radon in Commercial Real Estate
Joseph F. Boyd
published October, 2002, Howard County Business Monthly

In today's marketplace with the lowest interest rates in years, the increasing demand for new construction, and the rehabilitation of existing properties, commercially backed mortgages are ever increasing. Also increasing is the risk that a lender may incur that can be associated with the real estate transaction. Although the majority of commercial lenders (~58%) have designated policy programs to screen for environmental issues that could affect the deal, such as site contamination, asbestos, or lead, one issue in which lenders are increasing their focus on is radon.

Radon is a colorless, odorless, and tasteless radioactive gas that results from the decay of radium and uranium in soil, rock, and water and if found everywhere in the world. It typically moves up through the ground into homes and buildings through plumbing penetrations, cracks, and other holes in the foundation because of air pressure differences. Radon only becomes an issue when it is trapped inside the residence or building, where gas levels can become elevated. Once inhaled radon can be deposited in the lungs where it alters the DNA in the lung tissue, causing lung cancer. This occurs over a period of years and is dependent on the amount of time spent in the residence or building. Radon gas exposure is the second leading cause of cancer after cigarette smoking killing approximately 15,000 - 22,000 people a year. There is no known safe level of radon.

Radon gas is measured in picocuries per liter of air (pCi/L), where a picocurie is a measure of radioactivity. The Environmental Protection Agency (EPA), Surgeon General, the Centers for Disease Control, and other health organizations recommend that action be taken to reduce indoor radon levels at or above 4pCi/L. The EPA has devised a radon potential zone map of the U.S., which indicates areas (by county) where there is a potential for elevated indoor radon levels. Indoor radon measurements, geology, aerial radioactivity, soil permeability, and foundation type are all used in determining the indoor radon potential. The counties are classified by one of three zones:

  • Zone 1: Counties that have a predicted average indoor radon screening level greater than 4 pCi/L (red zones)*
  • Zone 2: Counties that have a predicted average indoor radon screening level between 2 pCi/L and 4 pCi/L (orange zones)
  • Zone 3: Counties that have a predicted average indoor radon screening level less than 2 pCi/L (yellow zones)

*Howard County, Maryland is located in Zone 1

For counties located in Zone 1 areas, it is recommended that radon mitigation (reduction) standards be implemented as a part of new construction, and in rehabilitation projects where measurements are higher than 4 pCi/L. A system can either be passive or active. A passive radon mitigation system for new construction would entail gravel, plastic polyethylene sheeting, foundation sealing and caulking, vent pipes, and an electric junction box. This system allows the radon to passively exit the structure through normal air pressure differences created by the structure. A system is made active by wiring an in-line fan to the junction box for further radon reduction. The costs for adding radon mitigation standards during construction are approximately $350 to $500 per unit/building as opposed to $800 to $2,500 for retrofitting an existing structure.

Initially, lenders and developers believed that radon only presented a concern in residences and buildings in Zone 1 areas that contained below-grade basements or crawl spaces. However, slab-on-grade foundations can contain just as many cracks and openings to allow the entry of radon gas, as basements. This poses a costly concern because lenders are undecided whether to require the implementation of radon mitigation standards in all structures in Zone 1 areas in order to prevent liability, no matter the foundation type. Further complicating the matter the fact is that indoor radon is normally measured upon occupancy of the structure. Even though these issues are handled on a case-by-case study, it would seem more economical to make implementing passive radon systems the standard for all applications where increased radon potentials are an issue. Like the proverb says, "an ounce of prevention equals a pound of cure".

Joseph BoydJoseph Boyd is an Environmental Scientist with Building Consultants, Inc. In addition to his experience performing Phase I Environmental Site Assessments, he is also an IAQA certified mold assessor, as well as a certified Lead Based Paint and Asbestos Containing Material Building Inspector.

He can be reached at BCI at (410) 715-2277 or BCI provides expert project review for real estate transactions.

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