I just heard a horror story about lead paint where the seller was a municipality and the buyer had a 4 year old son. The municipality assured the buyer that there was no lead paint in the 1890 structure. Two years later, the son tested positive for lead paint levels above normal!
The following answers some common questions about lead paint.
It’s Always A Good Time To Review
the Massachusetts Lead Paint Law Disclosure Requirements
By Rich Vetstein on May 08, 2014
05:00 pm
Fraught with liability and danger,
the Massachusetts Lead Paint Law is always a hot topic for Massachusetts
residential real estate professionals. Fortunately for us, my colleague Attorney Marc Canner recently
gave a seminar on the Lead Paint Law in which he prepared a very helpful
Frequently Asked Questions (FAQ) with Practice Pointers which he’s graciously
allowed me to share here.
The overriding policy of the Mass.
Lead Paint Law is to encourage full disclosure of all lead paint related issues
and give buyers the opportunity to test for lead paint before they purchase a
home with lead paint. Unlike rental properties, however, there is no obligation
on the seller to de-lead prior to a private sale. But common sense dictates
that a lead-free house may be more valuable and marketable,
and this is particularly true for multi-family properties where tenants with
children under six years of age may in any event trigger the
de-leading requirements of the law.
Further, penalties for
non-compliance with the disclosure requirements are quite stiff. Sellers and
real estate agents that do not meet the requirements can face a civil penalty
of up to $1,000 under state law and a civil penalty of up to $10,000 and
possible criminal sanctions under federal law for each violation. In addition,
a real estate agent who does not meet requirements may be liable under the
Massachusetts Consumer Protection Act, which provides up to triple damages.
What lead paint disclosures does a
listing agent have to provide?
Practice tip: It is a good idea to
combine the two forms as one document in DotLoop (or other transactional
software system) or on the MLS when the listing agent is providing these to the
Buyer.
Can the Buyer sign the Property
Transfer Notification Certification form before the Seller?
No. It is invalid. The Property
Transfer Notification Certification (“Property Transfer Form”) must be
completed and signed by the Seller before the Buyer can sign. The Buyer’s
signature acknowledges they are in receipt of the disclosure. Thus, the Buyer
cannot be in receipt of the disclosure until the Seller first completes the
form.
Practice tip: If the listing agent
is slow to send the Property Transfer Form, then the buyer’s agent should document
the requests by email. In addition, the buyer’s agent should email the listing
agent’s broker to request the timely receipt of the Property Transfer Form.
What disclosures and
acknowledgements have to be completed on the Property Transfer Form?
All disclosures and
acknowledgements have to be accurately completed, including the Seller’s
Disclosure, the Purchaser’s or Lessee Purchaser’s Acknowledgement and the
Agent’s Acknowledgement. Agents should be aware that HUD and the EPA have
audited broker’s files in the past and have at times found them deficient from
a compliance standpoint. Thus, it is critical to accurately fill out the form.
Practice tip: Make sure that the
Property Transfer Form includes the property address. The older form, “CLPPP
form 94-3 dated 6/30/94” does not include a line for the address. Both agents
working on the transaction should sign the form.
Does a listing agent have to
provide a Property Transfer Form for a property built after 1978?
No. The lead paint law only applies
to homes built after 1978. Therefore, testing for lead-based paint is not
required.
Practice tip: If the listing agent
provides a Property Transfer Form for a home built after 1978, neither the
buyer nor the buyer’s agent has to sign the form.
Does a Seller have to accept an
offer from a Buyer who is requesting lead paint testing?
A property owner or real estate
agent cannot sidestep the lead paint law simply by refusing to sell or rent to
families with young children. The purpose of the lead paint law it to protect
the health of children and pregnant women. An owner cannot refuse to sell or
refuse to renew the lease of a pregnant woman or a family with young children
just because a property may contain lead hazards that they do not want to spend
the money to remove. Any of these acts is a violation of the Lead Law, the
Consumer Protection Act, and various Massachusetts anti-discrimination statutes
that can have serious penalties for a property owner or real estate agent. A
case in point: a Boston area landlord was recently hit with a $75,000
penalty by the Mass. Attorney General’s office for lead paint
violations.
What is required to obtain a
Certificate of Compliance?
Owners of homes built before 1978
where children under six live should have the property inspected by a licensed
lead inspector. Typically, an inspector will look to remove peeling, chipping
or flaking paint. A full list of surfaces to be deleaded is available in the
CLPPP form.
Practice tip: To contact a licensed
lead inspector, click this link.
Does a listing agent need to
disclose a Letter of Interim Control?
Yes. A Letter of Interim Control is
only valid for one year. Thus, if a home built before 1978 that has a Letter of
Interim control but does not have a Certificate of Compliance, then the agent
needs to Disclose the Interim Letter of Control and likely engage a
professional to determine what work is needed to bring the property into
compliance.
What is the contractors’ role in
the lead removal process on home improvement projects?
In a previous article, I noted that new regulations
went into effect in 2010 that cover paid renovators who work in pre-1978
housing and child-occupied facilities, including renovation contractors,
maintenance workers in multi-family homes, painters and other specialty trades.
These regulations provide that most home improvement projects on homes built
before 1978 require certified lead paint removal project contractors to follow
strict lead paint removal precautions. Nothing in these new rules requires
owners to evaluate existing properties for lead or to have existing lead
removed.
Are there lead paint removal tax
credits and loans available?
In addition, Massachusetts has a
tax credit of up to $1,500 for each unit deleaded.
If an agent has a buyer purchasing
a home built before 1978, should the agent request lead removal be done before
the closing or after the closing?
If making these strategic
decisions, we recommend that you consult a real estate attorney in order to be
in full compliance with lead paint laws.
At closing, should Sellers sign the
form in the closing package that says the Seller agrees to remove all known
lead paint?
The form typically contained in
most lender closing packages states that the Buyer agrees to indemnify and hold
the lender harmless in the event of any non-compliance with lead paint laws.
___________________________
Richard Vetstein and Marc Canner
are Massachusetts real estate attorneys. Rich can be reached at
rvetstein@vetsteinlawgroup.com and Marc at mcanner@cannerlaw.com
