The New Bane of the Real Estate World: PFAS.
Never heard the term ‘PFAS’?
Consider yourself lucky!
If you haven’t yet heard, or been subject to, the term “PFAS,” count yourself lucky. It likely won’t last. And you certainly haven't seen the Mark Ruffalo movie Dark Waters.
Every few years there is a new hot-button topic in the environmental field; in the past, the ‘new red flags were asbestos, radon, PCBs, and vapor intrusion in buildings, just to name a few. In today's regulatory world, it PFAS.
If you want to learn all the chemical and biological intricacies of PFAS, there are detailed webinars, technical articles and PowerPoints galore on same – we can certainly point you to some of the better ones, because we have sat through most of them. But for the reader of this bulletin, I doubt you need that level of information... and, frankly, it gets pretty boring.
So here is a somewhat-quick primer of salient real-world facts that will make you brighter than most on the topic of PFAS. Retain even a fraction of these factoids and you will be the smartest cocktail party attendee, if ever another cocktail party happens in the post COVID-19 world.
Quick Primer, Some Salient Factoids:
PFAS is an acronym for per- and poly-fluoroalkyl substances, a mouthful, but it simply means they are a type of synthetic chemicals manufactured by humans – they don't exist naturally (i.e., not found in nature without being put there by humans).
PFAS aren’t new – they have been around for 90 years – this type of chemical was first invented in the 1930s, primarily as a fire-fighting foam component. PFAS are very good at extinguishing fires, especially airport jet-fuel fires, where they were first widely used.
But it was soon determined that these PFAS compounds were also very effective when used-in/added-to anti-stick/anti-stain materials – including everything from carpets, to kitchenware, to clothes, to paper products, to pizza boxes, even burger containers – essentially any products or surfaces that are slippery, waterproof and/or stain resistant – think Teflon. Well over 100,000 different products use PFAS in their manufacturing process. To that end, they are found in countless common products we all use and all have in our businesses and homes, touching just about every aspect of our lives.
The term 'PFAS' is actually an umbrella term – there are 5,000+ of these chemical products presently in the marketplace – no one knows exactly how many PFAS substances there really are, because new types and combinations are being formed and manufactured in laboratories every day, even as you are reading this article – the PFAS umbrella is getting ever larger.
So far, PFAS sound good; they make our lives easier and better and who doesn't like non-stick/non-stain surfaces.
So, what’s the catch?
The catch is that toxicological tests indicate that ingestion of some of these class of compounds is not-so-good for your health – quite bad, in fact. If you want to get a sense of just how bad, watch the movie Dark Waters – it is sobering to say the least. Other studies show that low levels of PFAS have found their way into all types of plants and animals in the food chain, including humans. In fact, it is estimated that almost all living creatures on earth have some level of PFAS inside them, and 99% of all humans have one or more PFAS compounds in their bloodstreams due to years of exposure to consumer products, food and the like...and that includes you too, reading this article. You may very well, and likely do, have PFAS pulsing through your veins, right now.
And therein lies the rub.
The problem is that there are so many different PFAS compounds, numbering in the thousands, and the clinical studies of the effects on humans on most of these compounds are so nascent, there isn't a lot of verifiable information about how bad they are (but some types, such as one designated as PFOA, have clearly been shown to be quite bad to humans and animals). To that end, regulators are struggling to determine what is a safe exposure level, especially in the water you drink. To that end, regulators have picked a handful of the most common PFAS (i.e., just 3 or 4 of the 5,000+ out there, including PFOA) and have done more tests on those compounds than the thousands of others -- that does not mean the potential toxicological testing/effect on humans is completely known/thoroughly understood, it just means that there is ‘more information on these couple 3 to 4 more common types of PFAS compounds than the thousands of others, most of which have not really been tested at all.
Okay, time for some more quick facts.
Since PFAS don’t exist in nature, the background level you should find in nature (and inside your own body) should be zero;
Since regulators still don’t know with real certainty at this point in time what level of PFAS is 'safe', they have chosen very low levels as regulatory standards for a few of the more common/studied ones, known as PFOA, PFOS and PFNA;
Most chemicals in groundwater/drinking water are determined to be 'safe' for humans in the parts per billion (ppb) range – this is very low. By way of example, if you were looking at a clock, and each single ppb represented a single second of time, then 1 ppb is essentially 1 second in a time span of almost 32 years! That's a pretty tiny amount when looked through such a lens. And 1 ppb just happens to be the actual cleanup standard in New Jersey for benzene in groundwater. Benzene is a common component of fuel oil, gasoline and other petroleum products. This low 1ppb benzene standard has been around for years and is, as one can suspect, hard and very costly to achieve in New Jersey. Lots of people spend lots of money trying to achieve such a low cleanup level in groundwater. This is why some fuel oil and gasoline tank spills cost so much to clean up.
Now take PFAS compounds; the regulatory cleanup standards are still evolving, but have been set in the parts per trillion (ppt) range – a thousand times lower or smaller than parts per billion used for compounds like benzene. To give you an idea of just how incredibly tiny this concentration is, using the same clock analogy as above, one ppt is essentially equivalent to 1 second in a time span of almost 32,000 years! This regulatory action level is so low, many modern testing laboratories don't even have equipment to accurately report such contaminant levels. Hence, many existing and long-standing environmental laboratories are not equipped to test for PFAS.
As of now, the regulatory level is a bit of a moving target, changing on the federal level, and state-by-state, as new toxicological data is generated. Presently, the federal ‘advisory’ level is 70 ppt; the level in various states for the most common 3 to 4 PFAS compounds ranges from 8 to20 ppt, depending on the individual PFAS compound in question. New Jersey is in the 10 to 14 ppt range.
So, what types of sites do you find these PFAS compounds, if you test. Well, typical 'red flag' PFAS sites are: manufacturers, airports, firehouses, refineries, defense sites, wastewater treatment plants, landfills, and metal finishing plants. However, that list is certainly not exhaustive, and, given their ubiquitous use, PFAS are pretty much showing up on just about any commercial, industrial, and retail site where testing is performed, even residential sites (especially ones that have present, or prior onsite septic systems). It is a sobering fact that PFAS compounds will likely be found in virtually every real estate setting where testing is allowed to occur.
Adding to the misery is that PFAS compounds are very stable once out in the environment; they do not naturally degrade and are therefore commonly labeled as ‘forever chemicals.’ To that end, unless the PFAS contaminant plume is very small, most of the common, more cost-effective remedial techniques will not work. Current remedial ‘options’ simply include long-term containment and monitoring, versus actual cleanup. This can get expensive, and can easily complicate real estate deals, because longer-term escrow accounts, or significant price set-offs, usually are resultant.
In summary, PFAS:
Are ubiquitous in the environment and the food chain - everyone is exposed to them and they are likely present in some form on every property you encounter;
Have been around and been deposited into the environment for the past 90 years;
Don't degrade over time (forever chemicals);
Compounds, most of them, are still relatively a mystery as to what concentrations are safe to ingest/remain in the environment;
Have very low regulatory cleanup levels;
Are presently the ‘it’ contaminant/hot button issue for most environmental regulatory agencies; and
If found, can be very expensive to investigate, delineate, and ultimately remediate or capture and long-term monitor.
Bottom line… what does all this mean for property owners and real estate buyers/sellers?
As a seller, we would strongly caution against allowing any unnecessary/random PFAS testing on your parcel as part of any transactional due diligence or financing-related assessments by third-parties — if/once you find PFAS, you are stuck dealing with it (even if the deal tanks), unless you are lucky enough to be below regulatory standards, or can assign the issue solely to one or more offsite sources (not easy);
As a property owner or tenant deemed to be a responsible party for some environmental regulatory action, you may want to consider fighting any unreasonable request by the NJDEP or regulatory agency to test for PFAS compounds (at times these requests can be technically rebuffed) — we have been finding regulators regularly asking for PFAS testing, without any prompts or real reason other than they are likely there; and
As a buyer, tenant, or bank, before you buy, lease, or lend, you may want to know if there is an existing PFAS issue you are stepping into.
Of course, these PFAS goals are, many times, contradictory between buyers, sellers, landlords, tenants, borrowers, and banks – everyone is wearing a different hat and many times have competing interests. And if you add an insurance component into the mix, their eyes on the PFAS issue and whether coverage can be secured makes the whole project even messier. This sort of conflict is true in most environmental-related real estate/financing matters, but given the relative newness, complexity, and cost of dealing with a myriad of different PFAS compounds, this is the type of contamination you really don't want to encounter if at all avoidable. And if you do, you need to have a well-thought plan of how to deal with the consequences if PFAS is found above regulatory action levels, which is easy to accomplish.
If you want to learn more about PFAS, and want some guidance on other resources, or have specific questions, based upon the 'hat' you might be wearing at any given time, give us a call.
Enjoy your cocktail party; but watch those coated paper plates!