COME SEPTEMBER, DISCLOSURE RULES FOR LEAD PAINT WILL TAKE EFFECT BY JOSEPH P. MCCARTHY Reed McClure Beginning on Sept. 6, 1996, most owners of single-family and multi-family housing built before 1978 will need to inform prospective purchasers or tenants of the hazards of lead-based paint on the premises. This obligation is imposed by new federal regulations under the Residential Lead-Based Paint Hazard Reduction Act of 1992. The regulations are intended to combat a significant environmental hazard which is little known in the Pacific Northwest. Unfortunately they contain no exception for the Northwest, and anybody who is selling or renting pre-1978 residential housing, including single-family residences, will need to comply. Lead was commonly used in gasoline, tin cans and house paint from the turn of the century until 1978 when it was banned in most consumer products by the U.S. Consumer Product Safety Commission. Concerns regarding lead exposure are not new. The scientific community has agreed for over 50 years that ingested lead is especially harmful to women of childbearing age and young children. In small doses, lead can cause learning disabilities, growth impairment, sensory impairment and neurological damages. In higher doses, it can cause brain damage, convulsions and death. Although the blood level of lead in American children has decreased significantly since the 1970's, the scientific community now believes that blood levels thought safe then are actually harmful. It has been estimated that 1.7 million U.S. school children under the age of six have harmful blood lead levels. It has also been determined that the pre-1980 housing stock in the United States contains three million tons of lead in the form of lead-based paint, and that 83 percent of the privately owned housing units in the U.S. contain some lead-based paint. The housing stock in Washington state, however, is generally newer and in better shape than the housing stock in eastern states, and Washington has a relatively low incidence of lead-induced illness. Current health concerns focus on the normal wear and tear of lead-based paint that creates a dusty film on walls and other interior surfaces. Exterior lead paint also flakes and leaches into the soil. Lead in these forms can be inhaled or transferred to the mouth by the hands. There is a growing consensus in the scientific community that these forms of lead pose a greater environmental hazard than the eating of lead-based paint chips. In order to inform the public about the potential risks, the new regulations impose four general duties on owners or lessors of housing built before 1978. They must: disclose all information they have regarding the use of lead-based paint on the premises; give the prospective purchaser or tenant an EPA-approved pamphlet, about lead hazards; include a warning of lead hazards in the written sale contract or lease; and provide prospective purchasers a 10-day lead hazard inspection contingency period. What is covered? The regulations apply to "all transactions to sell or lease" pre-1978 housing. There are exemptions, but the regulations will apply to most sales and leases of residential units. One exemption is for leases of less than 100 days, such as hotel stays and vacation housing, provided that the lease cannot be renewed or extended beyond 100 days. Another exemption is for leases of rental housing which has been certified to be free of lead-based paint by a federally certified inspector are exempt. The federal government has not yet, however, developed a certification program for such inspectors. In the meantime, owners and managers can use state-certified inspectors to gain the exemption. The state of Washington has not, however, developed a certification program. This exemption does not apply to any sale of housing on the theory that the 10-day lead hazard inspection period would be illusory if the purchaser did not know the history of the home. The regulations also exempt the sale or lease of housing for the elderly or disabled, or any "zero-bedroom dwelling." Housing for the elderly and disabled means community retirement homes, group homes and similar housing. A "zero-bedroom dwelling" is a dwelling where the sleeping area is not separate from the living area, such as efficiencies, studios, dormitories, and the rental of individual rooms in residential dwellings. There are additional exemptions in the regulations. The disclosures can occur at any time during the sale or lease process as long as they occur before the time the purchaser or lessee becomes legally bound. Mass disclosure of information to prospective purchasers or tenants is not required. Sellers or lessors must disclose to the purchaser, lessee and any agent, the presence of any known lead-based paint hazards on the property as well as the location and condition of the hazard, the way the seller or lessor came to know about it, and other information which is available to the seller or lessor. In addition, the seller or lessor must give the purchaser, lessee and agent copies of any available records which pertain to the paint hazards on the premises. The sale or lease contract document must also set forth the known lead-based paint hazards, or state that the seller or lessor has no knowledge of any paint or hazards, and must list all the records or reports provided, or state that no records are available. Importantly, however, a seller or lessor has no obligation to search for, treat or remove any lead-based paint. Purchase contracts and leases must also now contain a one paragraph Lead Warning Statement. The exact language of the statement is set forth in the regulations. The regulations contain various enforcement mechanisms, including civil monetary penalties, federal enforcement actions, criminal sanctions and liability to a purchaser or lessee for treble damages and attorneys' fees. The failure to comply with the regulations or statute has no effect, however, on the validity or enforceability of any sale or lease. Persons selling or leasing any home or apartment built before 1978 should consult with a knowledgeable attorney. Nothing in these regulations requires sellers and lessors to rid their properties of lead-based paint. However, in June of 1996, HUD published proposed regulations on that subject. The federal government is now taking comments on the proposed regulations, which won't become final for at least a year. Joseph P. McCarthy is a partner with the Reed McClure law firm. McCarthy focuses his practice on real estate law, housing and land use law.