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How PFAS Contamination is Affecting Area Property Values

Nearly two years since PFAS groundwater contamination in northern Kent County became public, more details are emerging that will affect property marketability and value. 

The Kent County Health Department (KCHD) and Michigan EGLE (formerly DEQ) will not issue new well permits at properties in which the water source is contaminated above 70 ppt total PFAS (and the state is currently considering lowering this criteria), or if the property is located too close a known dumping area. Applicable Michigan regulations provide that "a well shall be constructed to exclude all known sources of contamination from the well." Similarly, the KCHD regulations authorize denial of a well permit that would "endanger public health and safety." To date, KCHD has denied approximately six permit requests.

According to EGLE geologist Mark Worrall, "If the plume is through the property and the current well fails, those people have no source of drinking water from … that point" except for "trucking in water." This is true even if the property is or can be serviced by a whole-house water filter. And as for the filters, both the state and local health departments have said that water filters are not an acceptable long-term solution due to maintenance and failure issues. 

This is not a hypothetical issue. In late 2018, a family on House Street in Belmont experienced a well failure that required drilling a replacement well. A well permit was denied for the property and the homeowners now rely on a tanker truck and external tank system to provide water for daily needs. Not only does this require expensive infrastructure built onsite and the expense of water hauling, but it has exponentially raised their electric bill as well.

All homes with contamination above 70 ppt combined PFOA/PFOS are considered Part 201 facilities under Michigan environmental law. EGLE is currently evaluating the criteria and may expand the types of PFAS included as well as lower the acceptable level of PFOA and PFOS. Owners of facilities are required to disclose the existing contamination to potential buyers, provide reasonable access to the property for any response activities and comply with land use restrictions.

Finally, there are no definitive plans to expand municipal water to affected residents. Wolverine Worldwide has refused to pay for any extension and Plainfield Township estimates the cost to be up to $62 million, which is approximately $200,000 per affected home. Further, even the most expansive extension of municipal water would not reach all affected homes due to engineering and geographic restrictions.

Potential buyers, sellers and lenders should be aware of these issues when participating in the affected market.

© 2019 Varnum LLP

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About this Author

Kyle Konwinski, Litigation lawyer, Varnum
Associate

Kyle’s practice is commercial litigation. He has represented clients in a wide array of litigation, including trials, administrative trials, and on appeal. He has unique experience in environmental/land-use litigation and Employee Retirement Income Security Act litigation. Kyle has recovered millions of dollars for companies throughout the state that were victims of Blue Cross Blue Shield of Michigan's ERISA violations.

As for the environmental and land use area, Kyle has trial and appellate experience with contested case hearings in the Michigan Administrative...

616/336-6894
Aaron M. Phelps, Varnum, litigation attorney
Partner

For over 15 years, Aaron's practice has been focused on complex commercial and environmental litigation - in Michigan and around the country. Aaron has represented clients in contract and corporate governance disputes, telecommunications and energy matters, health care litigation, and tort actions.

Over the last five years, Aaron has represented over 200 companies in lawsuits against Blue Cross Blue Shield of Michigan for ERISA violations. The first trial resulted in a $6 million judgment, and subsequent judgments ranged from $315,000 to over $8 million. Currently, Aaron represents Rockford area residents in lawsuits against Wolverine Worldwide related to massive groundwater contamination.

Aaron also has a strong background in the environmental area, having represented clients in a variety of matters, including air permit disputes, civil enforcement proceedings, and contested case hearings. Aaron has prosecuted appeals of permit denials and successfully challenged MDEQ rules as unconstitutional. 

616-336-6257