Lead Based Paint And The Perils For Real Estate Agents | Mastroianni Consulting

The Law

Approximately ¾ of the nation’s housing built prior to 1978 contains some lead-based paint. When properly maintained and managed, this paint poses little risk. However, more than 1.7 million children have blood-lead levels above safe limits, mostly due to lead-based paint hazards. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women.

To protect the public from exposure to lead from paint, dust, and soil, Congress passed the Residential Lead-Based Paint Hazard Reduction Act of 1992, also known as Title X. Section 1018 of this law directed HUD and EPA to require disclosure of information on lead-based paint and lead-based paint hazards before the sale or lease of housing built before 1978.

As real estate professionals, the EPA & HUD Real Estate Notification and Disclosure Rule states that we are responsible for ensuring sellers and landlords are made aware of their obligations to disclose all known lead-based paint and lead-based hazards in housing and that we are to provide any reports on lead in the housing.

This impacts us with the Lead-Based Paint Disclosure Form and the Lead-Based Paint Renovation, Repair and Painting Program (RRP). Both are enforced by the EPA.

Lead-Poisoning

LEAD-BASED PAINT DISCLOSURE

To be in compliance with the Disclosure Rule it is our responsibility, as agents, to ensure that the Lead-Based Paint Disclosure is completed correctly and that all parties have signed prior to, but not later than the contract offer date. This is why the sales contract date is at the top left of the form. When the EPA conducts an audit of your office’s Lead-Based Paint Disclosures they are checking to see (among other things) that all of the dates beside the signatures occur no later than the contract date at the top of the page. They are also looking for the form to be correctly completed and that it contains all of the necessary initials.

Federal Law stipulates a purchaser’s or lessee’s right to be informed of the existence of lead-based paint prior to signing a contract or lease. They are then given 10 days to conduct an inspection at their own cost if they choose to.

Errors, incorrect signature dates, missing information or initials on the LBP can result in fines of $11,000 per instance. Further, a seller, lessor, or agent who fails to give the proper disclosure information can be sued for triple the amount of damages. In addition, they may be subject to civil and criminal penalties.  Click here for more information.

How do we protect ourselves, clients and broker/office?

Listing Agents, it all begins with you. Make sure that you have all of the disclosures, including the Lead-Based Paint completed by the Seller and uploaded to the MLS prior to making your listing Active. This will ensure that the Seller and Listing Agent’s signatures are dated prior to any offer. It also permits the Buyer Agent to have the Lead-Based Paint Disclosure signed prior to submitting an offer.

What if you are a Buyer Agent and the Disclosures have not been uploaded?

Prior to submitting an offer, reach out the Listing Agent for a copy of the disclosures including the Lead-Based Paint. This way you will be in compliance with the law. According to the National Association of Realtors, the EPA has sued or threatened to sue buyers’ agents who failed to comply with the disclosure requirements of the act. One recent EPA claim filed under the act involved a single-family residence and included both the salesperson and the broker.

It should be noted that as the EPA levies penalties or fines, these are often not covered by errors and omissions insurance.

LEAD-BASED PAINT RENOVATION, REPAIR AND PAINTING PROGRAM (RRP)

RRP is a federal regulatory program affecting contractors, residential property owners/managers, and others who disturb painted surfaces. It applies to residential homes, apartments, and child-occupied facilities such as schools and day care centers built before 1978.

RRP is aimed at protecting against lead-based paint hazards associated with renovation, repair and painting activities. The rule requires workers to be trained to use lead-safe work practices and requires renovation firms to be EPA-certified. It also requires that the reduction measures taught are implemented at every job site.

Lead+Paint+Removal

As real estate professionals, we often represent investors and rehabbers or, in many cases, we are the rehabbers or flippers. RRP is something that we need to be cognizant about in our day to day interactions with buyers and sellers, and the contractors that they/we employ. Any activity that disturbs paint in pre-1978 housing and child-occupied facilities requires RRP certified contractors. These contractor activities include: remodeling, conducting repairs and/or maintenance, electrical work, plumbing, painting preparation, carpentry, and window replacement. Minor repair and maintenance activities that disturb less than 6 square feet of paint per room are excluded.

The EPA uses a variety of methods to determine whether individuals and businesses are complying, including inspecting work sites, reviewing records and reports, and responding to citizen tips and complaints. Non-compliance can result in fines of $37,500 per day. Click here to learn more.

Things to Consider

What if you have been working with a rehabber who isn’t RRP certified? What if several remodels have been completed and safe-lead practices were not employed? What if a young family moves in completely unaware that their children could be playing in a yard that could be lead contaminated?

Remember, ignorance is not an excuse. If you know of work that is being completed without the proper safeguards and you don’t correct, report or disclose it, then you too could be implicated in a legal case. The law is very clear.

Final Thoughts

As Agents, our responsibilities cannot be over-stated. The Real Estate Notification and Disclosure Rule specifically addresses our responsibilities by requiring us to ensure compliance with the provisions of the law. The penalties are harsh because compliance is critical.

Please spread the word.  Fines are a deterrent for those who disregard the law, but knowledge and lead exposure prevention has so much better an outcome for the children of our city.

Other articles that you may find interesting:
10 MOST COMMON VIOLATIONS CITED BY MREC | MASTROIANNI CONSULTING
Ten Business Relationships Every Realtor Should Have | MASTROIANNI CONSULTING
Essential Business Skills for Realtors | MASTROIANNI CONSULTING

One comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s