Enforcement of lead-based paint (LBP) regulations has become a priority for the Environmental Protection Agency (EPA) and the U.S. Department of Housing and Urban(HUD). Federal regulators recently indicated that there may be widespread noncompliance with the LBP disclosure rules that went into effect in 1996, which suggests many in the apartment industry still do not understand what is required of them. To add to the burden, as of June 1, apartment owners and managers also must undertake additional disclosure activities for certain maintenance and renovation activities.
The 1996 regulations The first LBP disclosure regulations went into effect in September 1996 and affect owners and managers of pre-1978 properties. (Properties found to be LBP-free by a certified lead inspector are exempt.) The rules require residential property owners to disclose known LBP paint hazards to prospective renters or purchasers and provide them a copy of the HUD/EPA pamphlet, Protect Your Family from Lead in Your Home. The regulations are administered jointly by HUD and EPA, and noncompliance, which can involve civil penalties and criminal action, can be very expensive.
HUD has stepped up its enforcement activities under the new disclosure rule for maintenance and renovation work. The agency has already found one property liable for $4 million in fines, in addition to civil penalties, while a second property in the same portfolio was found liable for more than $1.5 million in fines. Several other owners in the Washington, D.C., area have received notices alleging noncompliance with the disclosure rule, and steep fines have been projected. In cases where no child has been poisoned but paperwork deficiencies exist, HUD appears to be forcing apartment owners remove the LBP on the premises as a condition for settling the case with reduced penalties.
The EPA also has enforced the disclosure rule and reports at least 13 cases across the country in various stages of resolution. The largest penalty EPA has assessed to date has been $408,375 against the U.S. Department of the Navy, although the case is currently pending before the EPA appeals board. The Agency also has issued letters of non-compliance to warn other owners across the country. In many instances, compliance with the disclosure rules is now being "tested" in the same sense that compliance with the Fair Housing Act is often "tested."
Despite this activity, noncompliance appears to be widespread. A recent U.S. Census Bureau survey reports that only 12% of purchasers or renters say they received appropriate LBP disclosure and notification. Another 37% report receiving no information, while 51% said they were unsure.
New disclosure rules effective June 1 Armed with federal agency research identifying renovation and remodeling activities as primary sources for the dispersal of lead-contaminated dust in the residential environment, the EPA has issued additional disclosure regulations to increase public awareness of potential risk. Effective June 1, activities in a pre-1978 apartment community performed by maintenance staff or outside contractors that may disturb two or more square feet of painted surface must comply with additional disclosure regulations.
Emergency repairs are exempt from advance notification requirements, as are properties found to be lead-free by a state-certified inspector. Failure to comply with the regulation may result in civil and criminal penalties, such as:
* Owners/managers or their agents performing "regulated renovations" in apartment units must, no more than 60 days before beginning renovation activities, provide the adult occupant of the unit with the EPA pamphlet, and obtain a signed acknowledgment from the resident stating they received the pamphlet. Owners/managers or their agents are permitted to mail the pamphlet, but if they do so, they must retain a certificate of mailing dated at least seven days prior to the renovation. If they cannot obtain a signature, they must self-certify in writing that delivery was attempted, and the owner/occupant refused or was unavailable to sign.
* Regulated renovations performed in common areas (e.g. laundry room, hallways, pools, tennis courts, lobbies and rental offices), also require written notification forcommunities. No more than 60 days before beginning renovation activities in common areas, the renovator must provide the building owner with the EPA pamphlet and obtain, from the owner, a written acknowledgment that the owner has received the pamphlet or obtain a certificate of mailing at least seven days prior to the renovation.
* Additionally, the renovator (or apartment owner/manager if the work is done by the owner/manager's maintenance staff) must notify, in writing, each individual unit about the renovation and make the EPA pamphlet available upon request to residents. The notice should describe the general nature and locations of the renovation activity, the expected start and stop dates, and directions for obtaining the free EPA pamphlet. Owners, managers and contractors must retain the following for at least three years: the signed and dated acknowledgment; the certificate of mailing or self-certification form; records of notification activities performed regarding common area renovations; and reports certifying that an accredited inspector determined that LBP is not present in the renovation area.
NMHC and its joint legislative partner, the National Apartment Association (NAA), were successful in securing several changes in the EPA's final rule to reduce the burden of the regulations on the apartment industry. However, the notification and record keeping requirement for each instance of repair is excessively burdensome. NMHC/NAA continue to work with Congress and the EPA to seek a more practical and realistic approach within the confines of the law.
Forming an action plan Property owners/managers should attempt to identify all information that is reasonably available regarding the presence of LBP on their property. One often overlooked source isgenerated during refinancing, in particular the Phase I Environmental Site Assessment. While such reports cannot be relied upon to certify a property as being free of LBP, they can be used against the property owner/manager in an enforcement action.
For example, if an owner indicates on the disclosure statement provided to residents that the owner/manager is not aware of the lead status of the property, when testing reports are actually available, federal regulatory bodies may view this as a willful violation of the disclosure provision. Property owners are cautioned that such reports may even be on file with HUD as a result of owner participation in certain federal programs. These regulations stress the importance of paperwork. Even property owners/managers who believe they are complying with the requirements should review the disclosure forms they have on file. An NMHC review of these files on several properties turned up forms filled out improperly, as well as forms lacking signatures and dates. Remember, owners/managers do not have to have a lead-poisoned resident on their properties to run afoul of the real estate disclosure law.
The difficulties some owners/managers have experienced in complying with the initial disclosure requirements will be compounded exponentially by the new regulations covering maintenance work. Owners/managers should review these regulations and develop a reliable system for making the required notification and disclosure events a routine part of maintenance.
Additional information - including copies of the regulations, EPA/HUD-prepared interpretive guidance documents, the sample disclosure form for www.nsc.org/ehc/lead.htm.and work orders, and the brochure - can be obtained from the National Lead Information Clearinghouse at (800) 424-5323 or at