Urea Formaldehyde Foam Insulation (UFFI) causes concern and confusion with both buyers and sellers and is potentially a serious liability issue if not properly acknowledged / disclosed during the course of selling a home in Ontario. I’ll attempt to provide you with the background information you need in order to better evaluate a property you may be considering for purchase or sale.
UFFI What is it?
UFFI is an insulation product made popular in Canada during the 1970s, particularly as part of the Canadian Home Insulation Program (CHIP) implemented by the Canadian government in response to the energy crisis of 1975-1978. UFFI is an industrial chemical insulation product that in its application state resembles shaving cream. Formaldehyde is a colourless (but not odourless) gas which occurs in nature in low concentrations. It is also used during industrial processes such as dry cleaning, the creation of paper products and emitted with automobile exhaust, smoke from wood burning appliances and cigarette smoke. UFFI is sprayed into empty cavities (primarily in walls of wooden residential structures) and expands to fill the area. It subsequently hardens into a rigid foam and provides increased insulation properties to the structure. As insulation retrofits go, it was a relatively effective and economic option.
The problem with UFFI
In 1973 an oil embargo initiated by OAPEC member countries in response to the US involvement with the six day war in the middle east caused the price of oil to rise from $3 to $12 per barrel. This oil shock occurred during a period of economic recession compounding the effect on consumers in Canada. As cheap energy disappeared the Canadian government encouraged home owners to improve the insulation properties of their houses through the CHIP program to reduce heat loss and improve energy efficiency. Crisis have a way of encouraging new technology and UFFI became an in demand home retrofit. Approximately 100,000 homes in Canada were insulated with UFFI during this period. As with other quickly adopted new technologies, benefits are sometimes accompanied by drawbacks which take time to appear. In the case of UFFI these draw backs centred around the off gassing of formaldehyde during the curing process. Some homeowners started reporting symptoms such as respiratory difficulty, eye irritation, nose bleeds, running nose, headaches and fatigue. A US laboratory study exposing lab rats to formaldehyde off gassing produced nasal cancers in the test subjects and raised public health concerns. In response, Canada prohibited the use of UFFI in December of 1980.
What science tells us about UFFI
Subsequent studies on the effects of UFFI off gassing have failed to substantiate reported health problems. The levels of formaldehyde off gassing decrease rapidly after application (usually within days of curing) to ambient levels typically found in an average home. Despite these findings symptoms were still reported by the public including those not possibly related to formaldehyde exposure. UFFI has been shown to deteriorate under wet conditions and may support the growth of mould if damp conditions continue. UFFI is still used in Europe to insulate homes today. UFFI is one of the most throughly investigated and innocuous products ever used in home retrofits however, public stigmatization of UFFI has prevailed in North America. Stigmatization has a direct effect on home value.
How UFFI impacts the process of home sales
Purchase agreements in Ontario require the home seller to warrant to the buyer that they have not insulated any building on the property for sale with UFFI during their time as owner. They also warrant that to their knowledge, no building on the property contains UFFI. This second point can become a critical liability if it can be proven that the owner in fact was aware of UFFI installation as the warranty survives the completion of the transaction and can be grounds for a lawsuit.
If the seller is aware of previous UFFI installation which has been removed by a licensed contractor, its important to provide certified proof of this removal during the transaction. Ultimately, according to a Carson-Dunlop study, owners of homes containing UFFI should enjoy their home and not lose any sleep over health concerns. The stigmatization and legal obligation to disclose the presence of UFFI however can have a direct impact on home value and how easy it will be to complete a sale now or in the future. Both buyer and seller need to carefully weigh the impact UFFI will have on their investment including the cost of any removal and decide on an appropriate course of action.