By way of background, in the past several years, the potential impact of vapor intrusion - defined as vapor from volatile organic or inorganic compounds making their way into the indoor air of occupied structures from contaminated soils or groundwater located beneath them - has received increasing attention of governmental regulators, including the New York State Department of Health (“DOH”) and the New York State Department of Environmental Conservation (“DEC”). In October 2006, DOH issued the final version of a guidance “recommending” that measures be implemented to address vapor intrusion due to potential adverse health impacts from such compounds to indoor air. The DOH guidance recommends that owners of affected properties take actions to prevent the potential for vapor intrusion when test results indicate vapor intrusion may occur, including recommending that certain actions be taken including implementing venting systems. The DOH guidance is controversial because it is triggered (requiring measures to be undertaken) by contaminant levels significantly lower than those levels requiring action under other governmental regulations targeting indoor air contamination (including the regulatory measures promulgated by the federal Occupational Health and Safety Administration).

The Notice Requirements
Property owners (including “their agents”) that receive test results from an “issuer” indicating indoor air contamination above threshold levels established by DOH guidelines (or above levels prescribed in guidelines issued by the Occupational Safety and Health Administration) must notify tenants and occupants of those results and, upon request, provide copies of such results. See ECL§ 27- 2405(2). The Tenant Notification Law only requires disclosure of test results received from what the law specifically defines as “issuers,” defined as the DEC, municipalities undertaking environmental restoration projects, “participants” (but not “volunteers”) carrying out activities under New York’s Brownfields Cleanup Program, as well as persons or entities subject to an order issued pursuant to New York’s hazardous waste or oil spill cleanup laws. See ECL § 27-2405(1)(B). In addition, when

sampling results for indoor air quality identify compounds that exceed referenced guideline levels, owners are also required to provide generic “fact sheets” prepared by DOH for those compounds present exceeding the DOH and/or OSHA guidelines. DOH has recently published fact sheets (dated February 2009) for certain compounds on its website (www.health.state.ny.us).

A landlord must provide notice to tenants/occupants within 15 days of receipt of the test results from such issuers, and such notice must include a NYSDOH fact sheet that identifies the compounds as well as any associated health risk posed by the exposure. Id.

The landlord’s duty to give notification to tenants/occupants may also be triggered even absent evidence of actual indoor air contamination. Because the Tenant Notification Law defines “test results” which are required to be disclosed as including not only actual indoor air sampling results, but in some circumstances test results from sub-slab vapor, soil or groundwater contamination (though it is less clear what contaminant level triggers notification for such soils and groundwater sample results), those kinds of test results are also required to be provided to occupants/tenants. Further, if a property has an engineering control in place to mitigate indoor air contamination (such as a deed restriction) or if the property is subject to ongoing remediation, the landlord must provide notice to prospective tenants prior to executing a rental or lease agreement and must also provide notice of ongoing hearings and other proceedings associated with the cleanup of such properties. See ECL § 27-2405(3). In such cases, a statutory notice must be included on the first page of a rental or lease agreement.

Ambiguities and Complications Presented by the Tenant Notification Law
In the brief time since its enactment, our experience has shown that there are significant complications associated with attempts to comply with the Tenant Notification Law, including those summarized below:

1. How Far Back in the Past Must an Owner Go in Disclosing Test Results? Read literally, the Tenant Notification Law could require any owner who has ever received test results above the applicable threshold levels to notify its tenants and occupants, even if the test results were obtained before the law came into affect. If the disclosure requirement applies to such past test results without regard to how long ago they were obtained, is there then a requirement for landlords to research whether their properties have historic indoor air quality test results that exceed the established thresholds?

2. Scope of the Persons to be Informed by the Notice Requirement: Who is a Tenant and Occupant Entitled to Notice from the Landlord/Owner? The Tenant Notification Law requires owners to provide notice to both tenants and “occupants,” yet no definition of “occupants” is included. Does “occupant” include customers of a retail tenant? Are a tenant’s employees entitled to the same notification given to the tenant employer? Even a well-intentioned landlord/owner would have a difficult time complying with notification requirements to “occupants” absent clarification of the meaning of that term.

3. Changes to the Criteria Triggering Notice. The threshold triggering notice is based on test results showing contaminant levels exceeding DOH and/or OSHA guidelines (as opposed to basing such notification requirements on exceeding levels set forth in regulations), and such guidelines (unlike regulations) can change without any statutorily required comment period or notice to the public. Thus, the threshold level requiring such notification may change quickly requiring notification where previously none was required.

4. Obligations of Sub-landlords/Assigns. In addition, it is not clear whether the Tenant Notification Law would apply for each subsequent sub-landlord/assignor which enters into subleases or assignment agreements for leasing a particular premise, even if there was initial compliance with the Tenant Notification Law by the original owner or landlord.