Volume 18, Number 3
Lead Paint: Beyond the Landlord/Tenant Context
Catherine A. Potthast
Many practitioners assume that lead paint is a concern only to property owners or tenants in inner-city rental dwellings. In fact, federal legislation and regulations also govern buyers and sellers of real property, real estate agents, construction workers, contractors, renovators, home improvement contractors, and home inspectors.
Lead is a naturally occurring element used as an additive in paints, solders, plumbing fixtures, ammunition, gasoline, and other products. Concern about the health effects of lead has led to a variety of federal, state, and local regulations. According to the Centers for Disease Control and Prevention (CDC), there is no established safe level of lead in the human body. Reported health effects of lead exposure include damage to the brain and nervous system, interference with the formation of red blood cells, kidney damage, reproductive system damage, hearing impairment, learning disabilities, and motor coordination impairment. Children under six years of age are of special concern because their nervous systems are developing and they are more susceptible to the adverse effects of lead. Children tend to absorb lead more readily than adults, and their normal hand-to-mouth activity increases the likelihood of lead ingestion through dust or chipping paint.
Lead was used for many years as a gasoline additive, and residual lead fallout from gasoline or industrial sources remains in many soils. Lead can be ingested through diet, canned foods, dust inhalation, water, and a variety of other sources. Paint is also a potential source of lead through ingestion and exposure to lead dust generated by paint removal, deteriorating surfaces, or friction against painted surfaces such as doors and windows.
Although in 1978 the residential use of lead-based paint was banned by the Consumer Product Safety Commission (CPSC), estimates released by the Environmental Protection Agency (EPA) indicate that as many as 64 million homes may contain lead-based paint hazards. The greatest risk for lead poisoning is to children living in deteriorated pre-1950 housing.
Many jurisdictions require mandatory screening of children, and there has been an explosion in the number of personal injury claims alleging lead poisoning. Jury verdicts in favor of tenants in some cases have been unusually high. In response to the explosion of claims and the severity of claimed damages, many insurance policies have added lead paint exclusions that exclude liability coverage for bodily injury or property damage caused by lead or lead paint.
Property Owners and Managers
Lead is regulated at the local, state, and federal levels. Lawyers should thoroughly research these when counseling on regulatory compliance. Regulation at all government levels affects property owners and managers-decedent's estates, landlords, investment property owners, banks in possession after foreclosure, bankruptcy trustees, trusts, and property management companies.
Clients or their counsel often find themselves in the position of being "landlords" even if they are not in the business of renting property to others. Clients may hold title to rental properties as personal representatives of estates or through inheritance. Lenders may take possession of rental properties upon a mortgagor's default. When two homeowners combine households, they may decide to rent the "extra" house. Bankruptcy trustees take possession and title to the assets of the bankruptcy estate, which may include properties rented to others. In each of these situations, property owners and possessors are obligated to comply with federal, state, and local regulations.
Specific areas of inquiry, particularly applicable to the "occasional" landlord, include:
- Is the home in compliance with applicable (usually local) housing quality standards? Is compliance documented by an independent inspector, photographs, tenant acknowledgment, or other checklist before the tenancy?
- Do state or local regulations require your client to register property or identify a local agent for housing notices?
- Does the local jurisdiction require a government inspection before the rental or an annual compliance inspection? (Multifamily units are subject to such local inspections.)
- Are leases up to date, with appropriate lead disclosures, and have the federally required lead disclosures and pamphlets been distributed, signed, and retained?
- Is any work needed on the property considered a "lead abatement"? If so, certified lead abatement contractors must be used. Lists of certified contractors, by state, are posted on the EPA's website at www.leadlisting.org.1
- Will repairs disturb painted surfaces? If so, the renovator must comply with federal disclosure requirements and have occupants sign lead warnings before starting the work.
- Has the client complied with applicable local or state property registration or lead safety regulations?
- Is the property adequately insured for fire and liability coverages, and do the policies cover a lead paint-related loss?
- Does your client employ workers who disturb painted surfaces (removing windows, moving walls, removing paint, renovating interiors)? If so, detailed Occupational Safety and Health Administration (OSHA) and certification requirements may apply.2
- Does your client receive federal assistance, or do any of the tenants participate in the section 8 rental assistance program? If so, HUD's housing standards may require additional lead abatement or other remediation measures.3
- Clients must be cautioned not to conduct lead abatement work or other work likely to disturb painted surfaces in occupied dwellings, due to the serious risk of spreading lead dust. Clients should not to attempt the work themselves and should use only certified contractors.
Buyers, Sellers, Lessors, and Agents
The federal Residential Lead-Based Paint Hazard Reduction Act (title X) requires that a federally approved lead warning be furnished to all tenants and contract purchasers of pre-1978 housing. In addition, any known lead paint must be disclosed, and all reports of lead testing must be furnished to the lessee or contract purchaser.4 There is no requirement under the act that lead testing or remediation be conducted, but all testing conducted must be disclosed. HUD and the EPA require the disclosures even if the house has been abated of lead paint or lead hazards.
The act creates a statutory cause of action against property owners and real estate agents who knowingly fail to comply with the notification provisions. There are some minor and very limited exceptions. In general, the disclosures are mandatory for every tenant or every purchaser of pre-1978 housing, even if the owner has no knowledge of lead paint in the house. Disclosure must occur before the tenant or the contract purchaser is obligated under the contract. The seller or lessor has three basic disclosure requirements under the regulations:
- Provide the purchaser or lessee with a lead hazard information pamphlet and a "lead warning statement" in the form required by statute.6 The statement must be signed and dated by both the purchaser and seller. The statutory lead warning statement must be printed in large type on a separate sheet of paper attached to the contract.
- Disclose to the purchaser or lessee the presence of any known lead-based paint hazards and provide to the purchaser or lessee any lead hazard evaluation report available to the seller or lessor.
- Retain the signed acknowledgment form for at least three years after the transaction. A purchaser of pre-1978 property is entitled to a ten-day period (unless the parties mutually agree upon a longer period) to conduct a risk assessment or inspection for the presence of lead-based paint hazards.
Regulations under the act furnish more specific information concerning what must be disclosed and when. The federal form is available at the EPA's website. The EPA and HUD have published guidance documents that supplement the information presented in the regulations.8 For example, HUD and the EPA interpret the act to require that disclosures be furnished to tenants holding oral leases when the rent is increased, although this is not addressed in the regulations.
The statute provides three enforcement mechanisms against persons who knowingly violate the disclosure requirements: (1) civil monetary penalties, (2) injunctive relief enforced by HUD, and (3) a private action for treble damages incurred by an aggrieved purchaser or lessee. In addition, the statute allows a prevailing plaintiff to recover court costs, attorney fees, and expert witness fees in a suit brought under the act. If a seller or lessor is represented by a real estate agent in the sale or lease transaction, the statute places an additional burden of compliance upon the agent.9 The EPA has issued enforcement guidelines and may seek penalties of up to $11,000 per disclosure violation.
Renovators and Contractors
The EPA regulates the construction and renovation industries, activities relating to lead-based paint, and certification of lead paint abatement contractors. Companies affected by these regulations include clients in the construction, renovation, building, demolition, rehabilitation, window replacement, and other businesses with employees that work in structures or homes with painted surfaces.11 The EPA has established guidelines for the conduct of renovation and remodeling activities, applicable to both commercial buildings and residential dwellings constructed prior to 1978.
Before undertaking renovation efforts in pre-1978 residential and commercial buildings, renovators must distribute a pamphlet, Protect Your Family from Lead in Your Home, to occupants under the EPA rules governing rehabilitation work. The pamphlet is available at www.epa.gov/lead/leadprot.htm.
The EPA regulations governing renovation activities took effect on June 1, 1999.12 "Renovation" is broadly defined and includes removal or modification of painted surfaces or components; modification of painted doors; surface preparation activity such as sanding, scraping, or other activities that may generate paint dust; the removal of large structures such as walls and ceilings; large surface replastering; major re-plumbing; and window replacement that may generate paint dust.13 Exempt from the applicability of the regulations are minor repair and maintenance activities that disrupt two square feet or less of a painted surface or component, emergency renovation operations, and renovations in certified lead-free housing. Consult the EPA website (www.epa.gov/lead/leadrenf.htm) for additional guidance documents, because included and excluded activities may be difficult to determine.
The renovator must obtain written acknowledgment that the owner or adult occupant received the lead-hazard information pamphlet or obtain a certificate of mailing at least seven days before renovation.14 If the renovator cannot obtain written acknowledgment, a certificate is required. The regulations contain sample forms for the acknowledgment and certification statements, as well as detailed record retention requirements.15 "Renovators" subject to the rules include general building contractors; renovation firms; special trade contractors such as carpenters, painters, or drywall workers; and home-improvement contractors. Owners and managers of rental property should carefully review the regulations, because in-house maintenance and operations employees are considered renovators subject to the regulations.16 Penalties of up to $25,000 per day, as well as criminal penalties, are set forth in the regulations. Employers should also be aware of the regulations promulgated by the OSHA governing lead exposure in the construction industry.
The EPA guidelines for conducting renovation and remodeling activities that may create a risk of exposure to dangerous levels of lead are available in a booklet, Reducing Lead Hazards When Remodeling Your Home.
The Lead Abatement and Testing IndustryThis category includes environmental consultants, home inspectors, and, potentially, workers in the construction, renovation, building, demolition, rehabilitation, window replacement, home improvement, or painting industries.
The EPA's 1996 rules govern "lead-based paint activities" in pre-1978 housing or buildings occupied by children. Separate regulations apply to lead-based paint activities in public buildings, commercial buildings, and steel structures. The regulations clarify that "while this subpart establishes specific requirements for performing lead-based paint activities should they be undertaken, nothing in this subpart requires that the owner or occupant undertake any particular lead-based paint activity."19 All "lead-based paint activities" as defined in the regulations are required to be performed by certified individuals and firms. Lists of certified inspectors and contractors are available at 888/532-3547 or www.leadlisting.org.
Regulated lead-based paint activities include inspection, risk assessment, and abatement as further defined in the regulations. A risk assessment is an "on site investigation to determine the existence, nature, severity and location of lead-based paint hazards," culminating in a report explaining the investigation and the options for reducing lead-based paint hazards. "Abatement" is any measure or set of measures designed to eliminate lead-based paint hazards permanently.20 Individuals and firms offering lead-based paint services must be EPA certified.
New EPA standards establishing the threshold for dangerous levels of lead in dust and soil, and defining the term "lead hazard," were issued this past January.22 The new federal standards are more stringent than most existing state standards and should be consulted when interpreting lead paint risk assessments or testing results. (For example, a consultant's risk report might conclude that there are no lead hazards, but if the consultant used the wrong standard, the conclusions are not reliable.)
Disposal of leaded waste. Renovation and abatement efforts in older housing may generate leaded waste. Proposed regulations were issued in 1998 that would change current requirements for disposal of waste generated by abatement and renovation efforts.23 The proposed rules are generally less burdensome than the current regulations, but the requirements are still costly. Improper disposal of toxic waste can result in substantial liabilities, and standard liability insurance policies issued in recent years no longer provide coverage for pollution claims. Property owners and abatement contractors should therefore keep abreast of federal toxic waste disposal regulation.
State and Local Regulation
Disclosure provisions. Many states have promulgated warning provisions. Maryland, for example, requires that all rental properties be registered, interim remediation be undertaken, and tenants receive a lead paint warning and tenant rights package. The Maryland law requires insurers to include liability coverage for lead paint injuries up to the amount of a statutory cap on damages, provided the property owner is in compliance with the statutory requirements.24 Other states require that information about lead-based paint be disclosed in reports furnished to buyers under residential real property disclosure acts.25 Common law principles governing negligent or fraudulent omission of material facts may also be pertinent.26 Lawyers handling residential transactions should research state and local requirements to determine whether state or local statutes, regulations, and common law decisions impose a duty to investigate for lead hazards and whether the parties may waive any disclosure requirements.
Inspection and remediation requirements. Massachusetts, New York, Connecticut, New Jersey, and Maryland are among states having legislation or regulations concerning lead-based paint identification or remediation.27 At least 26 states have programs to certify individuals and firms performing lead-based paint activities to ensure that the work is done correctly.28 Concern about leaded dust generated during abatement efforts has prompted several states to consider or promulgate lead-dust clearance standards that must be met upon project completion. The new federal dust clearance standards are more stringent than many existing state standards and preempt less rigorous standards.29 In addition, some states have detailed worker-safety regulations governing any renovation, painting, or construction work that is likely to expose workers to lead.
There is little uniformity among those states that have regulations as to the appropriate methods for stabilizing, treating, or removing lead-based paint or lead-based paint hazards from a property. Creation of uniform "standards of care" governing the maintenance of property or uniform approved methods to reduce lead-based paint hazards in residential property has been a subject of debate among regulators and advocacy groups. No real consensus among the interested parties has emerged, except that routine maintenance minimizes the potential for lead hazards to develop.Lawyers representing clients in connection with a sale or purchase of residential property should research state and local requirements to ascertain whether (1) warnings in addition to federal requirements are necessary or advisable, and (2) provisions other than federal law specify permitted methods of lead detection and qualifications of lead inspectors. In addition, if lead is detected upon inspection, it is necessary to research state or local requirements regarding appropriate abatement methods and to determine whether state or local requirements govern worker certification, training, and protection, as well as occupant protection. Finally, lawyers should be familiar with federal and state toxic waste disposal requirements because leaded debris from an abatement project might be subject to environmental disposal and storage regulations.
Practical Issues Regarding Remediation
The lack of uniform national guidelines applicable to all lead abatement projects has caused confusion among homeowners and purchasers. Because some states permit encapsulation of leaded surfaces (with specified materials) as a method of complying with lead abatement regulations, a dwelling may be deemed "lead safe" or in compliance with state or local lead regulation yet not be completely "deleaded" or "lead free." Further, because exterior soils and ambient air contain residual lead that can be tracked into the home, even a home that has never been painted with lead-based paint may contain residual lead dust and not be lead free. Title X introduces the concept of interim controls-measures that can be taken short of a complete removal of all lead-based paint-to increase the safety of a leaded house. Title X defines abatement as the permanent elimination of lead hazards as opposed to the permanent elimination of lead paint, a standard that is less than lead free in some cases. Other state or local regulators permit property owners to respond to lead violation notices merely by ensuring that painted surfaces are free from flaking paint, covering painted surfaces below a four-foot level, or removing paint from surfaces accessible to children.
Because of the confusion in the terminology associated with lead abatement, lawyers who prepare leases, contracts, proposals, or specifications should take care to specify the standards referenced in their documents. Those who hire outside contractors to test or abate a property should specify the project's scope in detail and ask exactly what a lead certificate of compliance entails. Is the consultant certifying that no leaded surfaces were located in the property, or that the painted surfaces are in good condition, inaccessible to children, or do not present any immediate hazards? Is the consultant using the correct standards for interpreting test results?
HUD published guidelines in 1995 that provide "detailed and comprehensive technical information on how to identify lead-based paint hazards in housing and how to control such hazards safely and efficiently." Although the guidelines do not apply to housing that has no federal connection, they have been used by many local authorities or contractors as a prototype for local compliance, particularly in the absence of any updated state regulations. National certification requirements now require that all inspections, lead hazard screens, risk assessments, or abatement activities must be performed by certified individuals in accordance with certain "documented methodologies."
Lawyers representing parties to residential transactions should recognize that lead-based paint testing and remediation is much more expensive than, for example, a termite or radon inspection or remediation. Lead abatement is a complex, time-consuming, and extremely expensive process. Until a lead paint risk assessment is conducted and a lead remediation expert consulted, it is nearly impossible to predict the cost of a complete abatement. Thus, there is a wide range in the estimated cost of lead remediation. HUD estimates the average cost to be $7,700, within a range from $5,500 to $12,000. Other groups have reported much higher abatement costs.33 Lawyers representing sellers or buyers in residential transactions should be aware of the potential costs of remediation or abatement of lead-based paint hazards, because they could present a huge stumbling block in negotiations or jeopardize the transaction.
Lawyers representing residential sellers or real estate agents for properties affected by lead-based paint need to make certain that the client's contract forms comply with the law's disclosure provisions. Clients should also be advised that reports containing information on lead-based paint and hazards must be furnished in accordance with the regulations, and that records must be kept in compliance with the regulations.
More importantly, lawyers involved in residential transactions should clarify which party will bear the cost of an inspection, risk assessment, or remediation if lead-based paint is identified. Clients in the renovation and construction industries also should be made aware that their activities may be subject to federal regulation and state and local requirements.
- E.g., Md. Regs. Code § 09.12.32.01-.16; 40 C.F.R. §§ 745.220-745.239 (Aug. 29, 1996) (federal work practice standards).
- 29 C.F.R. pt. 1926.
- 24 C.F.R. pt. 35 (HUD regulations); 24 C.F.R. §35.1 (requiring HUD to notify tenants of "HUD associated housing" of hazards of lead-based paint). See also 42 C.F.R. pt. 882 (standards for housing quality and lead testing). Current HUD requirements available from HUD USER, P.O. Box 6091, Rockville, MD 20850 800 245-2691; or National Lead Information Clearinghouse, 800/424-LEAD.
- 42 U.S.C. §§ 4851-4856 (Supp. 1993).
- 61 Fed. Reg. 9,064-9,088 (Mar. 6, 1996), codified at 24 C.F.R. pt. 35 and 40 C.F.R. pt. 745.
- "Protect Your Family from Lead in Your Home," GPO 055-000-00507-9; multiple copies available through Government Printing Office, 202/512-2233. Also available as EPA747-K-94-001 (May 1995) from Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. See also www.epa.gov (search Publications).
- 35 C.F.R. §§ 35.80-35.98; 40 C.F.R. §§ 745.000-745.119.
- HUD, Guidance on the Lead-Based Paint Disclosure Rule, (Aug. 21, 1996) (available at www.hud.gov/lea/leahome.html; see also HUD and EPA, Interpretive Guidance for the Real Estate Community on the Requirements for Disclosure of Information Concerning Lead-Based Paint in Housing, Pt. II, (Dec. 5, 1996).
- See 42 U.S.C. §4852d (Supp. 1993).
- See 42 U.S.C. § 4852d (Supp. 1993).
- EPA, Office Reg. Enforcement, Title X: Residential Lead-Based Paint Hazard Reduction Act of 1992 Interim Enforcement Policy (Jan. 1998).
- 15 U.S.C. § 2601 et seq.
- 63 Fed. Reg. 29,907-29,921 (June 1, 1998); 40 C.F.R. §§ 745.80-745.88.
- 63 Fed. Reg. 29,919 (June 1, 1998); 40 C.F.R. § 745.83 (1998).
- 63 Fed. Reg. 29,920 (June 1, 1998); 40 C.F.R. § 745.85.
- 63 Fed. Reg. 29,920 (June 1, 1998); 40 C.F.R. §,745.86.
- 63 Fed. Reg. 29,908 (June 1, 1998).
- 29 C.F.R. pt. 1926.
- Available at www.epa.gov or National lead Information Clearinghouse (EPA 747-K-97-001), supra note 3.
- 61 Fed. Reg. 45,813 (Aug. 29, 1996).
- 40 C.F.R. § 745.223 (1996).
- 66 Fed. Reg. 1,205; 40 C.F.R. pt. 745 (Jan. 5, 2001).
- 63 Fed. Reg. 70,190 (Dec. 18, 1998) (to be codified at 40 C.F.R. pt. 745). EPA fact sheets and explanatory materials for determining proper methods of leaded debris disposal available at www.epa.gov/lead/leaddebr.htm.
- H.B. 760, 1994 Md. Laws 114 (1994) (codified at Md. Envir. Code Ann. §§ 6-801 to 6-852; Md. Real Prop. Code Ann. § 8-208.2; Md. Ann. Code art. 48A §§ 734-737.
- See, e.g., Illinois: Ill. Rev Stat. ch. 765 § 77/35 (1994); Wisconsin: Wisc. Stat. Ann. § 709.03 (1993); California: Cal. Civ. Code § 1102.6 (West 1991).
- See, e.g., Ford v. Goffstein Realty, Inc., 687 S.W.2d 195 (Mo. App. 1985) (dismissing complaint filed by purchasers of leaded home against vendor and real estate agent; ordinances only applied to owners of property; negligence, nuisance, and claim based on city ordinances failed, but court allowed amendment to allege intentional misrepresentation).
- E.g., Mass. Gen. Laws ch. 111 §§ 189A-199A; N.Y. Public Health Law § 1370 et seq. (McKinney 1995); Md. Regs. Code § 26.02.07.01-.14. (1988).
- HUD, Office of Lead Hazard Control, Moving Toward a Lead-Safe America: A Report to the Congress of the United States (Feb. 1997).
- 66 Fed. Reg. 1,205-1,240 (Jan. 5, 2001).
- See, e.g., Md. Regs. Code § 9.12.32.01-.16; 8 Cal. Code Regs. § 1532.1; Wash. Admin. Code § 296-155-17609.
- See, e.g., American Society for Testing and Materials (100 Barr Harbor Dr., West Conshohocken, PA 19428-2959) ASTM PS 53 (Provisional Standard Guide for Identification and Management of Lead Hazards in Facilities).
- The HUD Guidelines are available from HUD USER, supra note 3. See 40 C.F.R. § 745.227 (work practice standards require use of certified individuals).
- The author has seen written reports estimating abatement costs as low as $2,500 and as high as $50,000.
Catherine A. Potthast is a shareholder of Nolan, Plumhoff & Williams, Chartered, in Baltimore, Maryland. The primary emphasis of her practice is on lead paint defense, insurance coverage disputes, environmental and toxic tort matters, professional liability claims, and appellate practice. She can be reached via e-mail at firstname.lastname@example.org.