Sinkholes, coastal property, and contamination
This lesson covers hazards that tend to show up in Florida transactions, starting with the two most Florida-specific ones: sinkholes and coastal regulation. Lead-based paint and radon disclosures are covered in Unit 7 and are not repeated here.
Sinkholes (Fla. Stat. 627.706)
Much of Florida sits on limestone that groundwater slowly dissolves. The statute defines a sinkhole as a landform created by subsidence of soil, sediment, or rock as underlying strata are dissolved by groundwater.
Florida property insurance draws a sharp line between two kinds of coverage:
| Coverage | Required? | What triggers it |
|---|---|---|
| Catastrophic ground cover collapse | Must be included in every policy from an authorized insurer (627.706(1)(a)) | All four must occur: (1) abrupt collapse of the ground cover; (2) a depression visible to the naked eye; (3) structural damage to the building, including the foundation; and (4) the structure is condemned and ordered vacated by the government. |
| Sinkhole loss | Insurer must make it available for an additional premium, and may inspect first (627.706(1)(b)) | Structural damage to the building, including the foundation, caused by sinkhole activity |
Other points:
- Residential policies may carry a sinkhole deductible of 1%, 2%, 5%, or 10% of the dwelling limits (627.706(1)(b)).
- A sinkhole claim is barred unless notice is given within 2 years after the policyholder knew or reasonably should have known of the loss (627.706(5)).
So cracked walls from slow settling are generally not "catastrophic ground cover collapse." A buyer who wants that protection needs the optional sinkhole coverage. Known sinkhole activity or repairs are material facts that should be disclosed.
The Coastal Construction Control Line
Along Florida's sandy beaches, the state sets Coastal Construction Control Lines (CCCLs) county by county. The line marks the part of the beach-dune system subject to severe fluctuations based on a 100-year storm surge, storm waves, or other predictable weather conditions (161.053(1)(a)). Building seaward of the line requires special siting and design and a state permit (161.053(4)).
The coastal property disclosure (Fla. Stat. 161.57)
When property is partially or totally seaward of the CCCL:
- The seller must give the buyer a written disclosure at or before execution of the contract. It may be in the contract or a separate document (161.57(2)).
- The disclosure warns that the property may be subject to coastal erosion and to federal, state, or local regulation of coastal property, including the CCCL, rigid coastal protection structures, beach nourishment, and the protection of marine turtles. It points buyers to the Florida Department of Environmental Protection for more information.
- Unless the buyer waives it in writing, the seller must also provide, at or before closing, an affidavit or a survey showing where the CCCL is (161.57(3)).
Other hazards, briefly
- Mold. EPA's rule of thumb is that the key to mold control is moisture control. Fix the leak, and dry wet materials within 24 to 48 hours. EPA suggests that areas larger than about 10 square feet call for its fuller remediation guidance. Visible mold or past water intrusion is worth flagging.
- Asbestos. A mineral fiber once used in insulation, roofing and siding, vinyl floor tiles, and pipe wrap. Fibers are released mainly when the material is disturbed or damaged, as in renovation or demolition. Exposure is linked to lung cancer, mesothelioma, and asbestosis.
- Underground storage tanks (USTs). A tank plus underground piping with at least 10 percent of its volume underground. The concern is leaks that contaminate soil and groundwater. Federal UST rules exclude farm and residential tanks of 1,100 gallons or less holding motor fuel for noncommercial use, and heating-oil tanks used on the premises. State or local rules may still apply.
CERCLA (Superfund) liability
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, known as Superfund, lets the federal government clean up hazardous substance releases and make responsible parties pay. Liability is:
- strict, so it applies even without negligence;
- joint and several, so one party can be made to pay the whole cleanup; and
- retroactive, so it can reach conduct from before 1980.
Potentially responsible parties include current owners and operators, past owners and operators at the time of disposal, those who arranged for disposal, and certain transporters. A buyer can become liable just by owning contaminated land. That is why commercial buyers order a Phase I environmental site assessment. Doing "all appropriate inquiries" before buying is generally required to qualify for protections such as the innocent landowner and bona fide prospective purchaser defenses.