The Federal government, in a relatively unheralded administrative move, has imposed lead-based paint requirements on all residential real estate transactions involving sale or rental of homes built before 1978.

The standard takes effect September 6, 1996 for owners of more than 4 dwelling units, and December 6, 1996 for the rest. However, since the standard has in fact been promulgated, it is fair to assume that potential claimants may use it for private claims at any time.

The Federal Government estimates annual compliance costs in the $100 million range. Our experience is that the Government underestimates the cost of compliance with its pronouncements, as it does not fully appreciate, typically, the scope of the burdens it creates.

The Rule deals among other things with what housing is covered, when disclosure must be made, what decision opportunities must be afforded purchasers and renters, what kind of disclosures must be made, and what happens if the rule is violated.

We believe that disclosure causes litigation. That principle is applicable here as well.

This article is not intended, and should not be used, as legal advice. Legal advice properly must be obtained in direct consultation between attorney and client. I hope, however, that the information herein will be helpful to you.

The Rule requires that residential real estate sales agreements leases not be entered into until after disclosure of lead (and, in the case of sales, opportunity to inspect for lead) is afforded. Specific and detailed rituals and forms are specified. "Available records" must be furnished. And treble damages and actual attorneys' fees are available for violations.

Agents are charged with the responsibility of "ensuring" that the act is complied with. Therefore, agents become contingently liable for clients' lead poisoning cases.

Most of the United States' legal precedent has underlying it a concept of reasonableness and materiality. However, public safety and welfare statutory pronouncements are not typically viewed through these filters. That is why we see so many unreasonable decisions elevating the trivial to the significant, and the bizarre outcome becomes expected in these environments.

The typical result of chronic lead poisoning is chronic physical illness and mental retardation. Thus the claims for damages for violation of the rule can be expected to be extreme, since the rule allows them to be tripled, and actual attorneys' fees are provided for.

I expect that this statute will have as its battleground the state of the seller's or lessor's knowledge, and the completeness of the documentary submissions provided, should a lead poisoning claim arise. Although the administrative history of the provisions appears to use an "actual knowledge" test, the proof of knowledge is notice, and thus a person can be found to have known something he or she never heard of.

The records requirement of the rule holds that all relevant records must be listed and copied for the purchaser/lessee. Although the rule speaks in terms of reports and evaluations, such as by risk assessors, the language of the rule is not limited to that. The terms could well include painting contractors' invoices, and paint invoices. Though these will not disclose the lead content, they will disclose the product.

The typical homeowner's records will consist of canceled checks and paid invoices. However, these are not, of course, filed under "lead". Typically, they are not filed all by residential owner-occupiers, but retained in bulk, at best. Sifting through these repositories, while moving from one residence to another, will place significant burdens on sellers and lessors. And the test of availability will be imposed retroactively, when lead claims are made against nondisclosure possibly years previous.

Certainly, this new pronouncement merits careful attention.

We have available at Fisher Law Office copies of the EPA/HUD Real Estate Notification and Disclosure Rule Questions and Answers booklet, the EPA/HUD Fact Sheet, the National Lead Information Center order form, as well as the EPA pamphlet "Protect Your Family From Lead in Your Home. Simply email to fisherv@fisherlaw.com, or mail to P. O. Box 83, St. Joseph, Michigan 49085, call 616-983-5511, or fax to 616-983-5571.

The full text of the Rule is at 24 CFR Part 35, 40 CFR Part 745.

Copyright 1996, Vance A. Fisher

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