Most Realtors today are familiar with the requirements and forms needed to write a contract or lease and disclose certain information to buyers or tenants about the hazards of lead paint in a property. However, the liability for an individual licensee and his or her broker for failing to properly provide the required information can be so severe, including hefty monetary penalties and, yes, imprisonment, that the rules bear repeating. This issue provides you with a review of the requirements for lead paint disclosures.

Why do we have lead paint disclosures?
Approximately three-quarters of the nation’s housing stock built before 1978 (some 64 million dwellings) contains some lead-based paint. Lead poisoning can cause permanent damage to the brain and many other organs and causes reduced intelligence and behavioral problems. It can also cause abnormal fetal development in pregnant women. The Residential Lead Based Paint Hazard Reduction Act of 1992 requires disclosure of known information on lead-based paint hazards before the sale or lease of most housing built before 1978.

What is required?
Beginning September 6, 1996, to owners of more than 4 dwelling units and beginning December 6, 1996, to owners of 4 or fewer dwelling units, the following rules apply:

1. Seller and landlords must disclose known lead-based paint and lead-based paint hazards and provide available reports to buyers or renters.
2. Sellers and Landlords must give to buyers and renters the pamphlet called “Protect Your Family From Lead in Your Home.”
3. Homebuyers get a 10-day period to conduct a lead-based paint inspection or risk assessment at their own expense. The buyer and seller may negotiate the key terms of the evaluation.
4. Sales contracts and leases must include specific notifications and disclosures.
5. Sellers, lessors and Real Estate Agents share responsibility for ensuring compliance.

What is not required?

1. Testing for or removal of lead-based paint by sellers or landlords is not required.
2. The rules do not invalidate leases or sales contracts.

What property is covered?
Most private and public housing, Federally owned housing, and housing receiving Federal assistance.

What property is not covered?

1. Housing built after 1977.
2. Zero-bedroom units, such as efficiencies, loft and dormitories.
3. Leases for less than 100 days, such as vacation houses or short-term rentals.
4. Housing for the elderly (unless children live there).
5. Housing for the handicapped (unless children live there).
6. Rental housing that has been inspected by a certified inspector and found to be free of lead-based paint.
7. Foreclosure sales.

How can agents shield themselves from liability?
Realizing that you can’t stop anyone from suing you or your broker, over anything, at any time, here are some suggestions for protecting yourself, and your broker (and your E&O carrier) from potentially ruinous penalties.

1. Don’t list, sell or lease any property built prior to 1978. (Not very practical, but effective.)
2. Get the disclosure forms properly filled out and signed by all of the required parties.
3. Maintain your office file and a personal case file in your home office for each transaction, including copies of all signed disclosures.