C.R.S. 38-35.7-101, et. seq., mandates certain disclosures in connection with the sale of “residential real property.” However, a close reading of that statute reveals that certain of those disclosures apply not only to traditional residential properties (e.g. single family homes), but to commercial, multi-family projects, as well. While it’s common practice in Colorado to include the so-called “special taxing district” disclosure (C.R.S. 38-35.7-101) in all commercial purchase and sale agreements, it appears that this statute also requires that disclosures concerning methamphetamine laboratories and the potable water source be included in contracts for the sale of commercial, multi-family projects. Consider adding these “residential” disclosures to your next multi-family purchase and sale agreement. The form of potable water source disclosure is set forth in C.R.S 38-35.7-104; an illustrative methamphetamine disclosure is set forth below.
Methamphetamine Disclosure. If the Property is residential, and Seller knows that methamphetamine was ever manufactured, processed, cooked, disposed of, used or stored at the Property, Seller is required to disclose such fact. No disclosure is required if the Property was remediated in accordance with state standards and other requirements are fulfilled pursuant to § 25-18.5-102, C.R.S. Buyer further acknowledges that Buyer has the right to engage a certified hygienist or industrial hygienist to test whether the Property has ever been used as a methamphetamine laboratory. If Buyer’s test results indicate that the Property has been contaminated with methamphetamine, but has not been remediated to meet the standards established by rules of the State Board of Health promulgated pursuant to § 25-18.5-102, C.R.S., Buyer shall promptly give written notice to Seller of the results of the test, and Buyer may terminate this Contract, notwithstanding any other provision of this Contract.