Lead-paint liability rules are about to change

Nation's Housing

August 25, 1996|By KENNETH R. HARNEY

MANY HOMEOWNERS and small-scale property owners may not have the slightest idea about the new legal liability they face starting Sept. 6.

On that date, the first of two categories of homes for sale and rent becomes subject to new federal regulations governing lead-based paint. Even if you feel certain that the property you own -- or plan to sell or rent -- doesn't contain lead-based paint, you need to know how the real estate rules change nationwide, first on Sept. 6, and then on Dec. 6.

Beginning Sept. 6, certain property owners who are selling or plan to lease out a home must comply with the disclosure regulations issued March 6 by the federal Environmental Protection Agency (EPA) and the Department of Housing and Urban Development (HUD). Failure to comply could subject you to civil penalties of up to $10,000, criminal prosecution, as well as a court-imposed award equal to three times any damages incurred by an individual buying or renting your property.

Who is directly affected by the Sept. 6 trigger date? You are if you own more than four residential dwelling units of whatever age, type or location. For owners of four or fewer dwelling units, the rules kick in Dec. 6.

What do the rules require you to do? Several things. First, if your property was constructed before 1978, you will now be required to disclose any information you have about lead-based paint in the dwelling. You also have to provide purchasers and renters with a copy of a federally approved lead-based paint hazard pamphlet. And you also have to allow any purchaser of your LTC pre-1978 property up to a 10-day contingency period to bring in a qualified inspector to search for lead-based paint.

Although the wording of the contingency language in your contract will be up to you and the potential purchaser, the bottom line is this: The purchaser can waive his or her right to inspect the property, but you as a seller cannot refuse to permit the buyer up to a 10-day period to check the house out before becoming legally bound by the sales contract.

Since some buyers might be tempted to play contract negotiation games during the 10-day period, your best bet will be to use contingency-clause language that clearly spells out both parties' rights.

The National Association of Realtors has distributed guidance to its 700,000-plus members suggesting "typical testing contingency" language that allows:

The buyer to cancel the contract if the test results reveal "unacceptable" amounts of lead-based paint in the house.

The seller to get rid of the offending lead-based paint.

Best advice about what to do: Take the Sept. 6 and Dec. 6 deadlines very seriously.

Pub Date: 8/25/96

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