In an attempt to head off lawsuits, the nation's real estate firms plan to ask homeowners to say whether the houses they're selling are insulted with government-banned urea formaldehyde foam.
"Our basic concern is to protect the consumer," said Bill North, senior vice president and general counsel for the National Association of Realtors. "If we protect the consumer, we don't have any legal actions."
The Federal Consumer Products Safety Commission in February banned further sales of the foam insulation because it deemed the product a health risk. The agency had received more than 1,600 complaints blaming illnesses on formaldehyde gas emitted by the foam, and laboratory studies showed that high levels of the gas caused cancer in animals.
About 500,000 homes nationwide, including at least 4,000 in the Washington area, have the foam, which resembles shaving cream when pumped into walls, where it later hardens.
North said the real estate association plans to urge its 650,000 members to include existence of the foam insulation in their description of a home for prospective home buyers and in multi-listings shared with other agents.
But before going ahead, he said, the association wants the commission to spell out what realty agents should say to help a home seller identify the foam and to explain to a prospective buyer the insulation's hazards.
"This is a very delicate situation," North said. "We don't want to get caught in the middle between understating the significance of the ban and overstating the significance of the ban. We're not experts on whether the foam is a source of cancer or illness."
He said the association also is studying whether a homeowner would be legally obligated to disclose whether or not the home is insulated with the foam.
The association decided to seek disclosure of the insulation's existence in the home because "we're concerned that a real estate broker has made the best effort to tell a buyer about the foam," he said.
Failure to tell a customer about the insulation could be "legally dangerous" for an agent, seller or buyer, North said. "One could say it was a breach or omission to advise of a condition of a home," he said.
Before the CPSC ordered the ban in February, which had been proposed a year earlier, a group of the foam insulation's installers had warned that such a prohibition would devalue houses with the foam by $6,000 to $20,000. North said his association was studying the issue but had not reached any conclusions.
To check for the foam insulation, CPSC officials advise, homeowners can look for patched bore holes in a home's outside walls or for the typically white foam at wall joints in the basement and behind electrical outlet covers.
But "visual observation is tricky," noted Harry Cohen, the CPSC's program manager for household structural products. "There's the chance one could confuse the foam for something else."
The CPSC has published an eight-page booklet with answers to 17 questions commonly asked the agency's hot-line operators, Cohen said. Copies are available upon request.
After the insulation was banned, the hot-line received up to 1,500 calls a day about the foam, he said.
The ban will be the subject of May 4 and 5 hearings by the House Government Operations Committee's Commerce, Consumer and Monetary Subcommittee. Rep. Benjamin S. Rosenthal (D-N.Y.), chairman of the subcommittee, has said he wants to know what can be done to help owners of homes insulated with the foam and to check CPSC actions on other products, such as particle board and plywood, that emit formaldehyde gas.