CONSUMER DUE DILIGENCE CHECKLIST
© Deborah Long, September 2012
Real estate licensees are trained in the marketing of real estate. They are not trained or licensed to give consumers professional advice regarding the physical condition of property, legal or tax matters, survey, title, or environmental matters. Consumers are advised to consult with appropriate professionals for advice. The list of issues and resources below may assist consumers in evaluating the sale or purchase of property and/or hiring appropriate advisors. This document is provided for information only and is periodically updated.
Please acknowledge receipt of this disclosure by signing on the last page and initialing each page of this form.
ENVIRONMENTAL MATTERS, HAZARDOUS WASTE, TOXIC SUBSTANCES, WATER QUALITY, NOISE
Consumers are advised to consult with appropriate professionals regarding the possible presence of environmental contaminants, hazard waste, or toxic substances on or near the property. Issues such as radon gas, lead-based paint, asbestos and underground storage tanks should be investigated. Consumers are also advised to look into past uses of the property.
Consumers are advised to check with the appropriate professionals regarding the source, quality and availability of water.
Airport and other noise
The Raleigh Durham Airport Authority has designated certain bands or areas that are subject to air traffic noise as Noise Abatement Areas. It is up to the prospective buyer to determine how that may or may not affect their decision to purchase a particular home.
The RDU Airport Authority constantly considers changes to the airport. Right now, Terminal C is undergoing major renovation and additions. For information, call the Raleigh Durham Airport Authority at 919-840-2100 or go to
Residential sellers can disclose areas affected by noise problems and other nuisances on the Seller Property Disclosure form.
Some neighborhoods or communities may also have ordinances or covenants regarding noise issues. Private airports may also be in the vicinity of neighborhoods.
Asbestos
One of the best websites for environmental information is the EPA website at
Asbestos is used in many construction materials, including fireproof, insulation, ceiling tiles, and linoleum. It is commonly found in older homes. Asbestos become hazardous when it is dry and crumbly, a condition known as friable asbestos. For web site information on asbestos in North Carolina, go to
Dry-cleaning solvent
There are an estimated 2,000 active and abandoned dry-cleaning sites in North Carolina. As many as 1,500 of these sites may be contaminated with solvents used in the dry-cleaning process. In 1997, the North Carolina General Assembly passed a law to address this problem. The Dry-Cleaning Solvent Cleanup Act (DSCA) established a fund to help dry cleaners and property owners investigate and clean up contaminated dry-cleaning sites. The fund is supported by taxes collected on dry-cleaning services and solvents. DSCA also authorized the creation of rules called Minimum Management Practices (MMPs) that active dry-cleaning facilities must comply with in order to prevent environmental contamination.
For more information, go to and
Fracking and mineral rights
In spring 2012, Raleigh-area newspapers reported that D.R. Horton, one of the nation's largest home builders, assigned the mineral rights of at least 425 properties in the Triangle to its energy subsidiary, DRH Energy. By stripping the properties of the mineral rights, homeowners cannot control the mining, drilling or fracking activities beneath their properties. In addition, many banks and financial lenders, including the State Employees' Credit Union, Freddie Mac and Fannie Mae, will not back mortgages on properties that don't have mineral rights or on which the owners have signed leasing agreements to drilling companies.
For more on the story, go to
The NC attorney-general’s office has asked DR Horton about its disclosure practice regarding its retention of mineral rights. See sample contract below used in one sales transaction in Chatham County:
Fracking, or hydraulic fracturing, is a controversial process of drilling to extract natural gas. In other states where fracking has occurred, residents have reported spills and fumes, health problems, contaminated tap water, sick and dying animals, earthquakes, and other problems.
In August, 2012, D.R. Horton indicated that it would notify buyers who did not receive mineral rights with the purchase of their property, offering to give back those minteral rights.
Lead-based paint
One of the best websites for environmental information is the EPA website at
Many homes built before 1978 may have paint that contains lead. Some mini-blinds also contain lead paint. Sellers and landlords who offer pre-1978 housing must provide tenants and buyers a Lead-Based Paint or Lead-Based Paint Hazard Addendum. You will also be provided with the EPA pamphlet Protect Your Family from Lead in Your House.
Information about lead can be obtained at the National Lead Information Center: 1(800)424-5323 or by calling Health Hazards Control at (919) 733-0820. Web site information on lead based paint in NC may be found at
Meth Labs
Methamptamine is a highly addicted controlled distance. An increasing number of meth lab “busts” have taken place in NC since 2000. Creating meth can produce hazardous which can seep into walls air vents, filters, carpets, draperies and other household components. Waste is sometimes dumped on around the property. If real estate licensees know that a property was used as a meth lab, this fact must be disclosed unless remediation has been completed and can be documented. Concerned consumers should go to to find addresses of locations where law enforcement agencies reported they found chemicals that might indicate the presence of a drug lab.
Mold
One of the best websites for environmental and air quality information is the EPA website at NC real estate licensees do not have to point out or disclose small quantities of mold to consumers.
Most types of mold that are routinely encountered in homes are not hazardous to healthy individuals. However, there is at present some concern that exposure to certain types of mold (for example, stachybotrys atra) may cause or worsen conditions such as asthma, hay fever, or other allergies. Toxic molds tend to grew where there has been excessive moisture, and thus, most problems associated with mold should be approached from the perspective of dealing with drainage issues and moisture control.
You can find more information at
Radon
One of the best websites for environmental information is the EPA website at A radon map of NC can be found on this website as well.
Current EPA guidelines reflect an acceptable level of radon gas as less than 4.0 pico curies per liter of air. Radon is present in many counties in North Carolina. A test by a qualified radon inspection company is recommended. A list of certified radon mitigation providers in NC can be found at .
If a licensee knows that dangerous levels of radon are present in any structure which will be occupied regularly by people, then the licensees must disclose that information to prospective buyers or tenants. Excessive levels of radon in granite countertops became a news story in 2008, but the EPA has not issued any directives regarding this matter.
Rock Quarries
Several quarries are located within the Triangle. Contact Nello Teer at 919-380-8006 or Martin Mariette at 919-781-4550.
Septic System
Buyers should have an inspection of septic tanks and related systems in connection with purchasing a home. Vacant properties may require special consideration. It is also important to make sure that the number of bedrooms in the home matches the number allowed for in the septic permit.
Septic systems may need to be pumped. Leach fields may need to be inspected.
If you are purchasing a home with a community sewage system or a home that has anything other than a gravity flow septic tank, it is recommended that you investigate the viability of the system by contacting:
Wake County 919-856-7400
Durham County: 919-560-7650
Orange County: 919-245-2411
Chatham County: 919-542-8214
USTS or Underground Fuel Storage Tanks
One of the best websites for environmental information is the EPA website at
If an underground storage tank exists and it is no longer being used, it is recommended an inspection be done to be sure it complies with state and federal regulations regarding hazardous waste. For web site information on the North Carolina residential clean up fund and other details, go to
Well/Private Water Systems
Consumers should have an inspection and water test done by a private lab or a county health department.
EPA Safe Drinking Water Hotline: (800)426-4791
Wake County Environmental:l 919-856-7446
Orange County:
Durham:
Chatham
Shearon Harris Nuclear Plant
Shearon Harris Nuclear facility is located in Southern Wake County near New Hill, NC. If the proximity of the Nuclear Power Plant is of importance to you, you may wish to inquire about its location in relationship to the home you wish to purchase. A map of the 10-mile area around the Harris plant is available at Obtain additional information from Progress Energy at the Harris Visitor Center, (919)362-3261.
General pollution information
The EPA website at allows you to search “Where You Live” and discover individuals/companies which discard potentially hazardous materials in your zip code.
CONSTRUCTION ISSUES
Aluminum Wiring
Some electrical contractors used aluminum circuit wiring instead of copper wiring, primarily in the 1960's and 1970's, as a way to save money and lower construction costs. A number of electrical fires have been attributed to aluminum wiring.
For information, go to and/or
Building Codes
NC municipalities may have building codes that require certain minimums regarding structures. For more information, contact the municipality in which the property is located and/or consult the Engineering Division, NC Department of Insurance. Ask for a Code Consultant in the area you have a question about building, electrical, plumbing or heating: (919)733-3901.
Chinese Drywall
In February, 2009, the United States Consumer Products Safety Commission launched an investigation of complaints about Chinese drywall, and dispatched toxicologists and electrical engineers to Florida in order to collect samples to determine the health and safety risks associated with the drywall. Millions of pounds of Chinese drywall have been imported into the U.S. and installed in homes in the past decade because it was inexpensive and readily available during the housing boom after hurricanes Katrina and Wilma.
In May, 2009, North Carolina joined the growing list of states where lawsuits over defective Chinese drywall have been filed.
Sulfur fumes emitted from Chinese drywall produce a “rotten eggs” odor and cause metals, such as air conditioning coils, to corrode. The fumes have also been associated with respiratory and sinus problems in some residents. In some homes, the drywall problems have been so severe that families have had to move, and some builders have begun gutting and replacing drywall in the buildings.
The U.S. Consumer Products Safety Commission says the only way to repair homes with defective drywall is to remove and replace the drywall and any affected electrical wiring. The Commission has received complains from more that 3,600 homeowners. According to the Associated Press, the U.S. imported roughly 5 million square feet of drywall from China during the housing boom from 2004 to 2008. Estimates indicate the drywall may be in more than 100,000 homes.
Lowes Home Improvement chain stores has offered a settlement to customers whose health or homes have been affected by the drywall bought from its stores. (The News and Observer, November, 2010, p. 7B.)
Manufactured Homes versus Manufactured Buildings
Real estate agents are expected to know the difference between manufactured homes (sometimes referred to as mobile homes) and manufactured buildings (often called modular homes) and stick-built structures and to make the appropriate disclosures to prospective buyers, lenders and appraisers.
Pressure-treated Lumber
Some types of pressure-treated lumber have been phased out of residential use after 2003. There is some concern that the presence of chromated copper arsenate (CCA), an arsenic-based pesticide, could be dangerous; however, the government did not find that pressure-treated wood posed an unreasonable risk. Thus, the use of this product is not one that must be disclosed. For more information, concerned purchasers can go to
Polybutlyene Piping
PB piping is commonly found in NC homes and is not necessarily a problem, nor is it considered to be a required disclosure by licensees.
However, PB piping has been reported to have leaking problems due to join connections or certain types of fittings. It is strongly recommended that you have your inspector check for the existence of polybutelyne piping and any potentially related existing or past problems. Also, call the Consumer Plumbing Recovery Center at 800-876-4698. Real estate licensees in NC are not required to disclose the presence of pb piping but are required to disclose leaks, if known.
For information about a class action lawsuit and resulting settlement, but there may not be enough money in the fund for a fully recovery of losses. Go to for more information about the lawsuit.
Note that it becomes a material fact which must be disclosed when the licensee knows or should have known that there was a probable defect in the PB piping.
Siding
Many NC homes are finished with one of the siding materials listed below. Class action lawsuits (at the national and state level) have been filed due to problems related to one or more of these products. Settlements have been reached in some cases; others are pending or have been dismissed. It is recommended that a qualified inspector examine any siding materials to determine the product and existing or potential problems. Also contact manufacturers, the NC’s Attorney General's office, and the Defective Hardboard Siding Information Center (see resources below) for up-to-date information regarding legal actions.
Manufacturers/products having reached final legal settlements:
- Louisiana-Pacific: 800-245-2722.
- Masonite: 800-330-2722
Manufacturers/products with pending or ongoing lawsuits or preliminary settlements:
- Georgia-Pacific: 888-882-5246.
- Masonite: 800-256-6990 for more information.
- ABTCo (Abitibi/Abitibi-Price): 334-432-1413
- Jefferson Smurfit Corporation
- Weyerhaeuser
Resources
- Composite Panel Association
website:
18922 Premiere Ct, Gaithersburg MD 20879
Phone 301-670-0604, Fax 301-840-1252 - Siding Solutions, Inc.
website:
3535 SW Multnomah Blvd., Suite #104, Portland, Oregon 97219
Phone 503-244-6610 Fax 503-452-0653
Consultant and publisher of: The Siding Book: A Field Manual for Identification of Composite Siding and Damage
Note: the mere presence of hardboard siding is not a material fact that must be disclosed in NC.
Synthetic Stucco
Exterior Insulation and Finish Systems (EIFS) or artificial stucco is a controversial exterior wall material. The possibility of moisture damage to exterior as well as structural members exists. An inspection of the exterior and interior by a qualified inspector is strongly recommended.
Information about a class action lawsuit can be found at
The NC Real Estate Commission has determined that the presence of synthetic stucco is a material fact. Licensees must disclose its presence even if it was removed. There is a class action lawsuit pending. Information can be found at
Termites and Wood-Destroying Organisms
Many insects in NC eat wood—including termites, borer beetles, carpenter ants, bees, and roaches. Other organisms, such as wood rot and fungi eat wood. It is recommended that consumers obtain a termite or wood-destroying organism report for a licensed inspector. Note that the current NCAR Offer to Purchase and Contract does not require sellers to treat for live infestation of insects nor to repair the damage that insects have caused.
General
Consumers are advised to hire appropriate professionals, such as licensed home inspectors or engineers to ascertain the physical condition of the property and structures. Inspections should be of, but not limited to, roofing systems, electrical and plumbing systems, foundation, appliances, landscaping, and windows and doors.
TRANSPORTATION ISSUES
Airports
See notes above.
Bus Service
Most Triangle communities offer bus service. Please contact those communities for information.
Outer Loop/Highway Development
Contact a qualified source for information on potential and proposed highway improvements or construction to determine the possible impact on the property you wish to purchase. For Department of Transportation information, go to Also go to for proposed or pending changes. Consumers should also call individual town/city planning departments for information.
Many local, state, and federal road projects are underway in the Triangle. The largest project is NC 540, also known as the Outer Loop, which will make a full circle around Raleigh.
Railroad Service/Tracks
Investigate the proximity of any railroad tracks to the property you wish to purchase. For information on related train schedules, call: 1(800)872-7245, Norfolk Southern Industrial Development (919)831-3092 or Public Affairs (919)831-3049 or Amtrak
LAND AND LAND-RELATED ISSUES
Survey
Consumers should obtain a current survey from a licensed surveyor to determine their boundary lines and if there are any existing encroachments or easements that may affect current or potential use. If there is an existing survey, consumers may be able to obtain an updated survey at a discounted price from the previous surveyor. Banks may not require a current survey from buyers, but buyers may then not be able to get a high-quality title insurance policy.
Buyers should ask their surveyors to indicate on the survey if the property is in a flood zone, even if there is an additional cost for such information. If property is partially or completed located in some types of flood zones, then additional insurance may be required by lenders and/or necessary for peace of mind.
Buyers may find additional information at and
Municipal Solid Waste Facilities (Sanitary Landfill)
Contact the appropriate town/city waste department to find the location of landfills.