Protect yourself and your clients with proper lead-based paint disclosures

The Residential Lead-Based Paint Hazard Reduction Act of 1992 requires certain property sellers and lessors to disclose the known presence of lead-based paint, and also places a burden on agents to ensure compliance with the regulations. Let’s review some of the main things to remember:

1. Target housing

The act applies to “target housing,” which is for the most part any housing constructed prior to 1978. There are certain small exceptions in situations that may involve target housing, such as lease renewals where a disclosure has already been made and no new information is available to the lessor, but for the most part, brokers should ensure that sellers and lessors fill out a disclosure form for every property built before 1978.

2. Lead Warning Statement & information pamphlet

A specific Lead Warning Statement must be used for sales and leases. The statements are printed on the Residential Lead-Based Paint Disclosure Form (Form LPD) and in the body of the Residential Lease (Form RL).

The warning statements – which are different for sales and leases – must be provided verbatim, and in the case of a sale must be in an addendum to an Agreement of Sale. Providing the warning statement in any other way is not compliant.

A separate written statement must be made by the seller/lessor that either discloses the presence of any known lead-based paint hazards or indicates no such knowledge. There must also be a statement made that all information available to the seller/lessor about the presence of lead-based paint hazards has been provided to the buyer/tenant. If records and reports have been provided (and they must be), those documents must then be listed. Questions about lead-based paint and lead-based paint hazards are also included in Paragraph 19(C) of the Seller’s Property Disclosure Statement (Form SPD), but even if disclosed there, the information should still be provided separately along with the Agreement of Sale.

The seller/lessor must also provide an EPA-approved lead hazard information pamphlet.  The EPA pamphlet, Protect Your Family From Lead in Your Home, can be purchased from the U.S. Government Printing Office online and is available in PAR’s online library. The receipt of this pamphlet, and any records or reports provided by the seller/lessor indicated above, must be affirmed by the purchaser/lessee in writing.

3.  Broker/agent requirements

Any agent involved in the transaction must make a written statement acknowledging that the agent has a duty to ensure compliance with the act and that he has informed the seller/lessor of the requirements of the act. This statement by the agent is found in the Residential Lead-Based Paint Disclosure Form (Form LPD).

4. Record retention

The act requires the seller/lessor and any agent to keep a copy of the disclosure statements for at least three years from the completion date of the sale or from the start of the lease period. At any time, it’s possible that a federal investigator might appear at your doorstep asking to see your paperwork.

5. Failure to make full disclosure

Failure to make full disclosure does not create a defect in title, nor does it affect the validity of the sale or lease contract itself. Purchasers or tenants seeking recovery for non-disclosure will have to use the legal system and the civil remedies provided by the act, and other legal remedies under the seller disclosure or fraud laws might apply as well.

But violators, which may include the agent, can be subject to civil and criminal sanctions for failure to comply. PAR has been made aware of PA brokers who were fined for non-compliance, but in most cases the fines were not for outright non-compliance, but for ‘technical’ compliance issues. For example, incomplete forms (signed only by one party), or forms with missing information have generated fines on more than one occasion. But if you take the time to comply and keep track of your records you should be able to avoid problems later on.