Most buyers, sellers, landlords and realty agents still don’t understand the simple, but potentially costly, liability disclosure rules for pre-1978 houses, condos and apartments. “What the heck is he talking about?” I can hear you say.
If you are involved with selling or leasing a residential property built before 1978, chances are nine in 10 the property contains lead-based paint, which can be potentially dangerous to residents unless the paint is in good condition.
Purchase Bob Bruss reports online.
The Federal Consumer Product Safety Commission banned lead-based paint in 1978. The reason is that lead-based paint can be harmful to individuals — especially small children — who are exposed to contaminated dust, soil or deteriorated paint.
In 1992, to enforce the ban, Congress enacted the Residential Lead-Based Paint Reduction Act (RLPHRA) to establish the simple disclosure rules. This federal law does not require sellers and landlords to remove lead-based paint, just disclose it.
However, RLPHRA requires sellers and landlords to (a) reveal if they know of lead-based paint on the premises, and (b) provide prospective buyers and tenants with a federal lead-based-paint disclosure form and information booklet.
MOST LEAD-BASED PAINT IS NOT A HEALTH HAZARD. Millions of U.S. houses, condos and apartments built before 1978 contain lead-based paint. It is not a serious health problem unless the paint is peeling and/or its dust gets ingested, especially by small children who are most vulnerable to lead poisoning.
Since 1992, the RLPHRA has required home sellers, landlords and their real estate agents of pre-1978 residences to provide buyers and tenants with a lead-based-paint disclosure and the federal information booklet.
More specifically, the federal law requires (a) a Lead Warning Statement required by federal regulations, (b) the property owner’s disclosure statement of any known lead-based paint, and (c) a notice to buyers (but not tenants) giving buyers 10 days to obtain a professional lead-based paint inspection at the buyer’s expense, if desired.
Residence buyers can waive their 10-day inspection period in writing. Short-term vacation rentals less than 100 days are exempt from this federal law.
But long-term residential leases and month-to-month rentals over 100 days of pre-1978 rental property must include the landlord’s written lead-based-paint disclosure stating whether he or she knows about lead-based paint on the property.
This disclosure form requires the lead-paint warning statement, the landlord’s report of any known lead-based paint on the premises, and the signatures of the landlord, tenant and real estate agent (if applicable).
DISCLOSURE PREVENTS SELLER, LANDLORD AND REALTY AGENT LIABILITY. There have been several federal court decisions imposing liability on residence sellers, landlords and their realty agents for failure to disclose known lead-based paint on the properties. Older residences with peeling interior paint are especially troublesome.
For example, in the case of Mason v. Morrisette (403 Fed.3d 28), minors Jason and Natasha Mason were diagnosed with elevated lead levels in their blood. Mental retardation and other physical problems often result, especially in small children.
Their mother was not provided the federally required disclosure or the lead-based-paint information booklet before she rented the pre-1978 lead-ridden apartment. However, on a technicality the U.S. Court of Appeals ruled the landlords were not liable to the children because RLPHRA creates liability only to the actual tenants and not to their minor children.
However, the landlords incurred defense costs that could have been avoided. If they had been found liable, their penalty would be treble damages as determined by a jury. That lawsuit could have been prevented if the landlords provided the federal disclosure form and a lead-based-paint information booklet before the tenants moved in.
Real estate sales agents are not immune from similar liability for non-disclosure of lead-based paint. In the case of Smith v. Coldwell Banker (122 Fed.Supp.2d 267), a real estate agent suggested to her home seller that a lead paint test be made on a house built in 1860. The test was positive.
Although the seller completed the lead-based-paint disclosure form, it was not given to the buyer. The broker, acting as a dual agent representing both seller and buyer, orally told the buyer about the lead paint and the existence of the report but it was not provided until the sale closing. The court held the realty agent’s oral disclosure was not adequate.
HOW TO PROVIDE THE REQUIRED DOCUMENTATION. The purpose of RLPHRA is to be certain buyers and tenants of pre-1978 residential buildings are informed there might be lead-based paint on the premises. This federal law does not require sellers or landlords to investigate or remove lead-based paint.
All that is required for sellers, landlords and their realty agents to comply with RLPHRA is (a) provide a copy of the Environmental Protection Administration (EPA) lead hazard information booklet “Protect Your Family from Lead in Your Home” and (b) have the owner provide a written disclosure of the lead-based-paint warning and any specific information about known lead-based paint on the property.
The EPA lead-based-paint booklet is available on the Internet at www.epa.gov.
FAILURE TO COMPLY PENALTIES. If a landlord or seller of a pre-1978 residence fails to comply with RLPHRA, the potential liability is three times actual damages suffered by the tenant or home buyer, plus court costs and attorney fees.
The simple solution is to provide the disclosure form and the booklet to prospective buyers and tenants, thus avoiding potential liability.
In most situations, unless the lead-based paint is peeling and in very bad condition, disclosure of the possibility of lead-based paint usually won’t harm the residence seller or landlord. However, when a dangerous, lead-based-paint condition exists, the required disclosures will alert the buyer or tenant to take precautions and seek further information. Further details about complying with RLPHRA are available from local real estate attorneys.
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Real Estate Center).