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Water supply contamination in some areas

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Pat Butler

Senior Member
Jan 17, 2002
Professional Status
Certified Residential Appraiser
Just got a new order from a client who is getting divorced. It's in a village that was home to a mfg plant that leaked chemicals into the ground. There are a few dozen lawsuits pending, and the state and federal EPA are involved.

The subject property is 3 blocks south of an identifed contaminated area. Last week's newspaper had an article about new testing wells that will be drilled on the subject's street to make sure the contamination didn't go down that far. The biggest problem is that they still don't know for sure what the extent of the contamination is--- the identified contaminated area is their best guess of the worst of it.

I'm trying to decide on how best to handle this- other than charging a few thousands of dollars! A few problems I can foresee--

1. It's u/k whether the subject is contaminated. I guess I'll need an extraordinary assumption stating that it's assumed for right now that the subject is not contaminated-- at least based upon preliminary site work by the EPA and the preliminary boundaries of the known contaminated areas.

2. The bigger problem is comp selection. Hundreds of homeowners have had their wells tested privately. It's possible that some of those people sold with the knowledge of being contaminated but without disclosing it to the purchaser. Furthermore, some of the official notices from the village were private. So the sellers might have been aware of contamination from offical sources, but no one else might have known. Also, the contamination of the groundwater flowed with the underlying bedrock. So the contaimation pattern is really spotty--- only parts of some neighborhoods were affected.

I'm thinking the only way to choose comps is by looking at lots of data that is reported to be outside of a contaminated area then put in an assumption that it is assumed the comps weren't contaminated. Otherwise, it would just be a guess. By looking at lots of data, I can at least make sure that the comps that I use would appear to not have suffered the stigma of being in a contaminated area. I hate to load my report up with lots of assumptions but I don't see any other way to do this while the situation is still pending. Any other ideas?
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