Beware of homes built before 1978

Most buyers, sellers, landlords and realty agents stilldon’t understand the simple, but potentially costly, liability disclosure rulesfor pre-1978 houses, condos and apartments. “What the heck is he talkingabout?” I can hear you say.

If you are involved with selling or leasing a residentialproperty built before 1978, chances are nine in 10 the property containslead-based paint, which can be potentially dangerous to residents unless thepaint is in good condition.

Purchase Bob Bruss reports online.

The Federal Consumer Product Safety Commission bannedlead-based paint in 1978. The reason is that lead-based paint can be harmful toindividuals — especially small children — who are exposed to contaminateddust, soil or deteriorated paint.

In 1992, to enforce the ban, Congress enacted theResidential Lead-Based Paint Reduction Act (RLPHRA) to establish the simpledisclosure rules. This federal law does not require sellers and landlords toremove lead-based paint, just disclose it.

However, RLPHRA requires sellers and landlords to (a) revealif they know of lead-based paint on the premises, and (b) provide prospectivebuyers and tenants with a federal lead-based-paint disclosure form andinformation booklet.

MOST LEAD-BASED PAINT IS NOT A HEALTH HAZARD. Millionsof U.S. houses, condos and apartments built before 1978 contain lead-basedpaint. It is not a serious health problem unless the paint is peeling and/orits dust gets ingested, especially by small children who are most vulnerable tolead poisoning.

Since 1992, the RLPHRA has required home sellers, landlordsand their real estate agents of pre-1978 residences to provide buyers andtenants with a lead-based-paint disclosure and the federal information booklet.

More specifically, the federal law requires (a) a LeadWarning Statement required by federal regulations, (b) the property owner’sdisclosure 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-basedpaint inspection at the buyer’s expense, if desired.

Residence buyers can waive their 10-day inspection period inwriting. Short-term vacation rentals less than 100 days are exempt from thisfederal law.

But long-term residential leases and month-to-month rentalsover 100 days of pre-1978 rental property must include the landlord’s writtenlead-based-paint disclosure stating whether he or she knows about lead-basedpaint on the property.

This disclosure form requires the lead-paint warningstatement, the landlord’s report of any known lead-based paint on the premises,and the signatures of the landlord, tenant and real estate agent (ifapplicable).

DISCLOSURE PREVENTS SELLER, LANDLORD AND REALTY AGENTLIABILITY. There have been several federal court decisions imposingliability on residence sellers, landlords and their realty agents for failureto disclose known lead-based paint on the properties. Older residences withpeeling interior paint are especially troublesome.

For example, in the case of Mason v. Morrisette (403Fed.3d 28), minors Jason and Natasha Mason were diagnosed with elevated leadlevels in their blood. Mental retardation and other physical problems oftenresult, especially in small children.

Their mother was not provided the federally requireddisclosure or the lead-based-paint information booklet before she rented thepre-1978 lead-ridden apartment. However, on a technicality the U.S. Court ofAppeals ruled the landlords were not liable to the children because RLPHRAcreates liability only to the actual tenants and not to their minor children.

However, the landlords incurred defense costs that couldhave been avoided. If they had been found liable, their penalty would be trebledamages as determined by a jury. That lawsuit could have been prevented if thelandlords provided the federal disclosure form and a lead-based-paintinformation booklet before the tenants moved in.

Real estate sales agents are not immune from similarliability 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 herhome seller that a lead paint test be made on a house built in 1860. The testwas positive.

Although the seller completed the lead-based-paintdisclosure form, it was not given to the buyer. The broker, acting as a dualagent representing both seller and buyer, orally told the buyer about the leadpaint and the existence of the report but it was not provided until the saleclosing. The court held the realty agent’s oral disclosure was not adequate.

HOW TO PROVIDE THE REQUIRED DOCUMENTATION. Thepurpose of RLPHRA is to be certain buyers and tenants of pre-1978 residentialbuildings are informed there might be lead-based paint on the premises. Thisfederal law does not require sellers or landlords to investigate or removelead-based paint.

All that is required for sellers, landlords and theirrealty agents to comply with RLPHRA is (a) provide a copy of the EnvironmentalProtection Administration (EPA) lead hazard information booklet “ProtectYour Family from Lead in Your Home” and (b) have the owner provide awritten disclosure of the lead-based-paint warning and any specific informationabout known lead-based paint on the property.

The EPA lead-based-paint booklet is available on theInternet at www.epa.gov.

FAILURE TO COMPLY PENALTIES. If alandlord or seller of a pre-1978 residence fails to comply with RLPHRA, thepotential liability is three times actual damages suffered by the tenant orhome buyer, plus court costs and attorney fees.

The simple solution is to provide the disclosure form andthe booklet to prospective buyers and tenants, thus avoiding potentialliability.

In most situations, unless the lead-based paint is peelingand in very bad condition, disclosure of the possibility of lead-based paintusually won’t harm the residence seller or landlord. However, when a dangerous,lead-based-paint condition exists, the required disclosures will alert thebuyer or tenant to take precautions and seek further information. Furtherdetails about complying with RLPHRA are available from local real estateattorneys.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2006 Inman News

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