According to an article in the Edmonton Journal, 140 residents in homesteader received notices from the Government of Alberta warning about soil and groundwater contamination, with a “laundry list of cancer-causing substances.” The notices were posted on doors of homes in a new development called Renaissance Estates just north of Yellowhead Trail near 44th street, where a wood-preserving plant called Domtar was once located.

In a concurrent article titled “Residents of Former Domtar unsure what to make of contamination news" a homeowner is quoted as asking: “what happens to my property value in Homesteader?” No one gave an answer in the article, so here is ours...

While it's impossible to speculate on the future value of the properties there, I can say this is not a favourable event from a marketing perspective. If you are trying to sell in this type of situation, the key thing to keep in mind is: "what are my responsibilities in this situation?"

Answer the questions

When you are listing your property you are normally asked a series of questions, as you answer them this will help your agent understand the entire picture as it relates to your property.

When you get to the contract for the marketing of your home there is a specific section that will deal with this issue.

Share the local authority notice with your REALTOR®

Section 14 of the current Exclusive Seller Representation agreement requires you inform your REALTOR if you have received any “government or local authority notice.” A letter like the ones the residents in Renaissance Estates received this week would fall under that category. At that time, you will discuss your obligations for disclosure with your REALTOR® and legal counsel, based on the information that is available to you.

Keep track of the information and events as they occur

As of the time of writing this, the letters have just been delivered to the homeowners.  In the future steps may be taken that will remediate or mitigate the issues that will be important factors to consider.  Things may also regress and additional letters may be issued.  As a homeowner here, I would carefully track the progress and information you receive so that it can be referenced should it be needed.

Marketing your property: take care in making your warranties and representations

Once you decide to market your property you will hopefully be in a position to see an offer, and while this case wouldn’t be considered a "material latent defect" requiring disclosure (since there is public information about the issue), a seller will want to pay special attention to the warranties and representations section in the offer to purchase (section 6 of the current offer to purchase from the Alberta Real Estate Association). Specifically:

  • Section.  6.1f asks that the seller disclose any known material latent defects. This may or may not qualify and legal advice should be sought if you need to disclose.
  • Section 6.1g states that in essence, any local or government authority notices be disclosed in writing. This simply means you are going to have to tell the buyer about the letter, and, depending on their motivation and reasons for buying your home, this may or may not have a major impact on your value.
I’m not sure how, in this modern age, that a subdivision was allowed to be developed without significant soil sampling done, and the issue was not addressed and remediated prior to subdivision. This is the first place I’d be looking for answers.  What was the process for the subdivision?  Were these steps followed? Were certain things missed or ignored?

How will this affect property values in the area?

Obviously, soil contamination not going to have a positive impact on property values. How much will it impact values negatively? It's hard to say. Much like power lines, whether they cause health issues or not, if enough people believe there is an issue, the buyer pool becomes limited, and property values take a hit. Posted by Liv Real Estate on
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