Let's assume that a toxic dump is located within one mile of your home. There are newspaper and radio news broadcasts about the site. The soils and ground water are very contaminated. And, everyone in your State knows about the problem.

Is this your problem? Maybe not - if your drinking water and soil is ok. And if dirty air from the site isn't passing near your home.

But maybe this will become your problem as well. For example, if you try to sell your home and no one is interested because they heard its near a toxic dump, you have a problem.

In that case, welcome to the world of stigma damages. While there are many definitions of stigma damages used by lawyers and appraisers, I believe that it is best described as the reduction in property value caused by public perceptions relating to onsite or offsite property contamination or other environmental events of similar magnitude.

Appraisers have very intricate ways of evaluating stigma. But in my view, if two houses are perfectly equal in every regard, except that one is associated with an environmental release and the other has no such association, stigma represents the amount less that someone will pay for the house associated with the stigma than they will pay for the house perceived to be perfectly problem-free.

Affected homeowners may have no choice but to file a lawsuit to recover the reduction in property value caused by stigma. This might very well be in the form of a lawsuit alleging that this critical information relating to the toxic facility undergoing a massive, multi-year cleanup was not disclosed to the buyers before the purchase took place. In other words, this might be a fraud or failure to disclose lawsuit.

Or, the affected homeowner may have to sue the owner and operator of the dump seeking recovery of stigma damages. After all, they created this mess.

There are many factors that determine the extent of stigma associated with a particular toxic site. Perhaps the most important factor relates to the fear that buyers have relating to exposure from contaminants and carcinogens. How much information is known once the information becomes public? If there are more questions than there are answers relating to the toxicity of the site, it is reasonable to assume that the stigma might be greater. How well publicized has the information been?

Has the media recently been all over this story for one reason or another? For example, it would be hard to sell new homes with the names Three Mile Island, Love Canal, or Chernobyl included in the subdivision. The greater the notoriety the more likely one might expect stigma to be found.

Other than the extent of popular knowledge, experts consider a variety of factors in determining whether stigma exists and in placing a dollar amount on the stigma. They will look at the ability to obtain conventional financing for a particular piece of property, knowledge as to the extent of necessary remediation and a plan for addressing the remediation, and the level of government involvement in assuring that a cleanup is taking place.

The extent of stigma damages is often determined through the use of experts. Experts may consider comparable sales, replacement costs, as well as a reduction in income streams (when the property is used for commercial purposes) in determining the extent of stigma. In addition, experts very often knock on doors and take surveys of prospective purchasers, as well as real estate agents in the area, in an attempt to establish the level of stigma that has occurred with regard to a particular site.

Stigma is not just environmental in nature. Homes in which there have been notorious murders have been determined to suffer from stigma. And there have been cases involving claims of stigma relating to electromagnetic field lines.

You need to understand that stigma damages are not just awarded when the victim's own property is or has been contaminated. In addition, the contamination does not necessarily still have to be present in order for stigma to exist. Stigma may still exist even after a piece of property has been cleaned.

Again, think about what you would be willing to pay for a piece of property that is located next to a very well known, formerly contaminated piece of property. In some instances, you might be willing to pay the same amount that you would if the adjoining property was never contaminated. But in other instances, perhaps where the nature of contamination was potentially more lethal, or where there is a belief that all of the contamination was not removed, you might be insist on paying less.

In addition to resorting to litigation, affected property owners should determine whether any government funds might pay for stigma damages. Some funds will honor these kinds of claims, but there are often strict time limits. So, act very quickly .

The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.

Stuart Lieberman, Esq., and IRED.Com, Inc., will not accept any responsibilty for any reliance on the information in this column or any damages whatsoever resulting from reading this column.