The Developer expects that the money he raises from the first sales will help to secure financing for the rest of the project. The preliminary reports indicate that the soil is badly contaminated by pesticides, including pesticides such as DDT that have since been banned. Developer, who is concerned that these reports may scuttle the project, tells no one about the results. He chooses the least contaminated portion of the property for initial construction, replaces the topsoil, and builds two new homes. The deeds are recorded.
Tests indicate contamination just below the levels permitted by law.
The general warranty deeds to Lots 3 and 4 are recorded. Shortly thereafter, the grantor enters into contracts of sale for Lots 5 and 6. The inspection of Lot 5 discloses pesticide contamination levels above those permitted by law. Tests on Lot 6 indicate levels just below those legally permitted. Standard title insurance policies are available for both lots.