CONCERNING LEAD-BASED PAINT IN HOUSING

INTERPRETIVE GUIDANCE FOR

THE REAL ESTATE COMMUNITY ON THE

REQUIREMENTS FOR DISCLOSURE OF INFORMATION

CONCERNING LEAD-BASED PAINT IN HOUSING

PART II

December 5, 1996

Prepared by the

Office of Pollution Prevention and Toxics

U.S. Environmental Protection Agency

Washington, D.C. 20460

and

Office of Lead Hazard Control

U.S. Department of Housing and Urban Development

Washington, D.C. 20410

TABLE OF CONTENTS

TOPIC QUESTION #

INTRODUCTION

EFFECTIVE DATE OF RULE 29

APPLICABILITY

Trusts 30

Gifts 31

Housing in Lieu of Compensation 32

Mobile Homes 33

Rehabilitated Property 34

DISCLOSURE

Who Must Disclose 35, 36, 37

What Must Be Disclosed 38, 39, 40, 41, 42

Disclosure Process 43, 44, 45, 46, 47

LEAD-BASED PAINT FREE HOUSING 48, 49

INSPECTIONS

Auctions 50

Certified Inspectors 51

PAMPHLET ISSUES 52, 53

INTERPRETIVE GUIDANCE FOR

THE REAL ESTATE COMMUNITY ON THE

REQUIREMENTS FOR DISCLOSURE OF INFORMATION

CONCERNING LEAD-BASED PAINT IN HOUSING

PART II

INTRODUCTION

On March 6, 1996, the Environmental Protection Agency (EPA) and the Department of

Housing and Urban Development (HUD) published a final rule, "Lead; Requirements for

Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards in Housing," (61 FR

9064-9088). This final rule requires persons selling or leasing most residential housing built

before 1978 to provide purchasers and renters with a federally approved lead hazard information

pamphlet and to disclose known lead-based paint and/or lead-based paint hazards. The specific

requirements of the final rule are discussed in detail in the March 1996 notice. Other documents

used in the development of this rule are included in a public docket available for inspection at

EPA.

The requirements of the final rule are applicable as follows: (1) For owners of more than

four residential dwellings, the requirements were applicable beginning on September 6, 1996, and

(2) For owners of one to four residential dwellings, the requirements are applicable beginning on

December 6, 1996.

Subsequent to the publication of the final rule, EPA and HUD have received questions

from the real estate community about implementation of the rule. EPA and HUD developed the

first "Interpretive Guidance" document, dated August 20, 1996, containing questions 1-28, to

supplement the information presented in the final rule. EPA and HUD have developed this Part II

of the "Interpretive Guidance" to answer additional questions received from the real estate

community. This guidance will be expanded and updated as necessary.

The August 20, 1996 Interpretive Guidance, and other support documents, may be

obtained from the National Lead Information Clearinghouse (NLIC) at (800) 424-LEAD, or

TDD(800) 526-5456 for the hearing impaired. Requests may also be sent by fax to (202) 659-

1192 or by Internet E-mail to ehc@cais.com. The Interpretive Guidance documents and other

lead information can also be accessed electronically as follows:

EPA's web site at http://www.epa.gov/opptintr/lead/index.html

HUD's web site at http://www.hud.gov/lea/leahome.html.

EFFECTIVE DATE OF RULE

29. If a contract is signed before the effective date of the rule but contingencies are satisfied

after the effective date, would the contract be subject to the disclosure requirements of the

rule?

EPA and HUD wish to clarify the discussion of the point of obligation as it relates to

contingencies in questions numbered 3 and 5 in the August 20, 1996 document for

sellers and lessors. Only contracts or leases signed on or after the effective date are

subject to the rule. Contracts signed before the applicable effective date are not

subject to the requirements, even if they have contingencies that are satisfied or

otherwise lifted after the effective date or the closing occurs after the effective date.

This is because the terms and conditions of the contract were negotiated, agreed

upon, and endorsed by the parties before the 1018 rule became effective, and the

rule cannot be applied retroactively to require a change in those terms and

conditions.

APPLICABILITY

Trusts

30. In the rule, the term "owner" is defined to include trusts. However, trustees are not

specifically listed as "owners." Are trustees intended to be exempt from the rule

requirements? In the case of a trust, which party (the beneficial owner or the trustee) is

expected to comply with the rule?

In cases where a trustee has been given authority to sell or lease target housing by a

beneficial owner, the trustee would have the responsibility to comply with the

requirements of this rule. Otherwise, the responsibility would rest with the

beneficial owner. In both cases, the effective date for compliance would be

determined by the number of units owned by the beneficial owner involved in the

particular transaction.

Gifts

31. Does the rule cover owners who give property away, i.e., there is no sale or exchange of

money or other consideration?

No. The rule does not cover a situation where property is transferred as a gift.

Housing in lieu of compensation

32. Is housing that is provided in lieu of monetary compensation included in the rule?

Yes. Housing that is provided in lieu of monetary compensation to employees,

pastors, etc. is not exempt.

Mobile homes

33. Are mobile homes included in the definition of "target housing" under the disclosure rule?

Yes. Mobile homes (manufactured housing) built before 1978 are included in the

definition of "target housing". Although these units may have been constructed

largely of pre-finished materials, some surfaces, both interior and exterior, may have

been painted with lead-based paint. Therefore, EPA and HUD cannot exempt

mobile homes as a class. Houseboats, recreational vehicles, etc. are not considered

"target housing."

Rehabilitated property

34. Is a pre-1978 residential property subject to the rule if the property has been completely

rehabilitated, such that all pre-1978 painted components have been removed or replaced

after 1977?

EPA and HUD will consider amending the disclosure rule to exempt residential

properties in which all interior and exterior architectural components, such as

doors, windows, walls and all other painted surfaces (including any outbuildings,

fences, signs, etc) that were painted prior to December 31, 1977 have been removed

or replaced after December 31, 1977.

DISCLOSURE

Who Must Disclose

Co-ops and condos

35. Who is responsible for disclosure in the case of cooperatives or condominiums ("co-ops or

condos")? What about common areas?

This question originally appeared as number 10 in the "Interpretive Guidance"

document dated August 20, 1996. EPA and HUD recognize that the response to

question 10 was confusing and, upon further reflection, now offer the following

guidance in lieu of the response to question 10.

Under the final rule implementing Section 1018, the disclosure responsibility rests

with the owner(s) of the target housing which is being sold or leased. Generally, the

"owners" in co-op and condo arrangements are the persons who purchase shares in

the co-op and possess occupancy rights to individual units or purchase a condo unit

and a percentage of the common area, or lease individual units from the co-op or

condo. The co-op corporation or condo association represents the joint interests of

these owners. EPA and HUD believe that, in such situations, the responsibility for

disclosure regarding the unit being sold or leased should reside with the individual

owners of the unit. This responsibility also includes disclosure of information

concerning common areas.

Lead-based paint information, particularly regarding common areas, may not be in

the hands of the individual owners. In such cases, it may be administratively more

efficient for individual owners to arrange for disclosure of information through the

corporation or association. But in no instance should information held by the

corporation or association be withheld, as it is considered known information held

by the individual owners or reasonably obtainable by the owners, i.e. the

corporation or association simply holds such information for the benefit of the

individual owners and in no way does the representative arrangement shield the

individual owners from disclosure responsibility.

On occasion, a co-op or condo association, rather than an individual unit owner,

may possess occupancy rights (however denominated) to a unit being transferred at

the point of transfer. In these cases, the co-op or condo association, rather than a

unit owner, must comply with the disclosure requirements of the rule.

In co-op arrangements where owners purchase shares and also lease access to

individual units from the co-op, EPA and HUD consider the purchase of shares to

be the primary transaction for purposes of the disclosure rule. Therefore, in those

cases, EPA and HUD do not consider the co-op to be a lessor and the individual unit

"owner" to be the lessee and would not impose separate disclosure requirements on

the co-op as lessor under this rule.

Timeshares

36. Who must disclose in sales or leases involving timeshares?

Timeshares, like co-ops and condos, can be structured in a variety of ways.

Nevertheless, the owner(s) of a timeshare must disclose in any sale or lease of the

timeshare, if the unit qualifies as target housing. Thus, as with all sales or leases

under the final rule, the disclosure responsibility rests with the owner(s) of the

target housing who is selling or leasing a timeshare, and such an obligation is not

affected by multiple-ownership arrangements.

Owners who are selling or leasing a timeshare should disclose any information they

have about the presence of lead-based paint or lead-based paint hazards in the

timeshare. In this case, EPA and HUD would consider "reasonably obtainable"

records to include those records retained by the management company for the

timeshare.

Owners of timeshares who lease the unit should note the relief from disclosure

responsibility provided in 24 CFR § 35.82(c) and 40 CFR § 745.101(c). These

provisions exclude short-term leases of 100 days or less, where no lease renewal or

extension can occur, from coverage under the final rule. In the case of timeshares,

EPA and HUD have interpreted this exclusion to mean leases of 100 consecutive

days per visit.

New owners

37. Does the purchase of a rental unit require the new owner (buyer), who has received

disclosure, to disclose that information to the current renter?

In this situation, disclosure is required only if there is a new lease or when renewal

of the lease takes place. If there is a significant change in the lease, i.e., a new owner

decides to change the name on the lease or the amount of rent is changed, this

constitutes renewal, and disclosure of any information not previously disclosed

should take place at that time.

What Must Be Disclosed

Property

38. Does the disclosure requirement extend to garages, tool sheds, other outbuildings, signs,

fences, and mechanical equipment on the property?

Yes, if these items are affixed to the residential portion of the property. The Lead

Warning Statement required by the statute states that the purchaser is notified that

the residential real property may present exposure to lead. Thus, disclosure of

known lead-based paint or lead-based paint hazards associated with any items that

are affixed to the property must be made. However, because section 1018 is limited

to contracts for sale or lease of housing, the regulations apply only to those items

that are located on that part of the real property that is used primarily for purposes

associated with residential use. EPA and HUD consider garages for personal

vehicles, storage sheds, play areas and play equipment, air conditioners, storage

tanks for home fuel, yards, driveways, fences and signs to be examples of items that

are associated with residential use, in addition to structures actually used by people

as living quarters. For most urban and many suburban residential lots, the entire

property is normally considered as being devoted to residential use. In the case of

real property that is used for nonresidential as well as residential purposes, a

judgment should be made as to which part of the property is used primarily for

residential purposes.

Mini-blinds

39. If a home has lead-containing non-glossy vinyl mini-blinds, must this be disclosed to

fulfill the 1018 disclosure requirements?

No. For purposes of section 1018, lead-containing mini-blinds in and of themselves

are not a lead-based paint hazard and their mere presence need not be disclosed.

The lead in lead-containing non-glossy mini-blinds is not a component of paint or

any other surface coating and, therefore, does not fall within the definition of "lead-

based paint" under 24 CFR § 35.85 and 40 CFR § 745.103. Further, because a

"lead-based paint hazard" as defined under 24 CFR § 35.85 and 40 CFR § 745.103

is a condition that causes exposure to lead in paint, or lead-contaminated dust or

soil, the lead in mini-blinds could not constitute a lead-based paint hazard by virtue

of its presence in the mini-blinds. However, if the lead stabilizer in lead-containing

mini-blinds breaks down into dust, it could contribute to lead contaminated dust

and, therefore, could become a lead-based paint hazard which would have to be

disclosed. Lead-contaminated dust, by definition, means dust with lead above

certain levels regardless of the source.

Home test kits

40. EPA's pamphlet "Protect Your Family from Lead in Your Home" states that recent studies

suggest that home test kits for lead are not always accurate, and that consumers should

not rely on home test kits to assure safety. Therefore, does the use of home test kits for

lead constitute knowledge of lead-based paint for disclosure purposes?

Yes. If an owner has information obtained from the use of a home test kit for lead,

that information must be disclosed; however, the owner should also disclose

information about the reliability of the test kit results.

Information subject to disclosure

41. Must records/reports involving lead-based paint or lead-based paint hazards that no longer

exist be disclosed?

Yes. Lessors and sellers are obligated to disclose all known information, including

information which shows that the lead-based paint or lead-based paint hazards have

been corrected. Section 1018 provides for disclosure of any available lead hazard

evaluation reports, and the rule requires the disclosure of the existence of any

available records or reports pertaining to lead-based paint or lead-based paint

hazards.

Existing summaries

42. When lessors provide a summary of an inspection report or risk assessment, in lieu of a

full report, may they use a summary prepared before the effective date of this rule?

Yes. A summary prepared prior to the effective date of the section 1018 rule may be

used in lieu of a paint inspection or risk assessment report, since the rule cannot be

applied retroactively to summaries done before the rule. In question #13 of the

August 20, 1996 Interpretive Guidance Document, EPA and HUD discussed

generally how lessors may provide summaries in lieu of complete inspection and risk

assessment reports.

Disclosure Process

Disclosure forms

43. May sellers, lessors, and agents develop their own disclosure forms?

Sellers, lessors, and agents may develop their disclosure forms as long as the forms

meet the requirements of 24 CFR § 35.92 and 40 CFR § 745.113. Persons

developing disclosure forms are advised to determine whether they must meet

additional state requirements before finalizing their forms. For example, in some

states, licensed real estate agents must have forms which they develop approved by

an attorney before any forms may be used as part of a real estate transaction.

Type size

44. How large must the type size be for the Lead Warning Statements included on the

disclosure forms?

The type size of the Lead Warning Statements must be as large or larger than the

predominant type size on the disclosure form. This is illustrated in the sample

disclosure forms included in the preamble to the final rule (60 FR 9074-75, March 6,

1996).

42 U.S.C. 4852d

45. The regulations at 24 CFR § 35.92(a)(6)(i) and (b)(5)(i) and 40 CFR § 745.113(a)(6)(i)

and (b)(5)(i) require agents to sign the disclosure forms, indicating that they have

informed sellers or lessors of their obligations under 42 U.S.C. 4852d. What does 42

U.S.C. 4852d refer to?

The citation 42 U.S.C. (United States Code) 4852d is the authority under which the

section 1018 disclosure rule was written. Therefore, the agent is certifying that the

seller or lessor has been informed of the requirements of the statute as implemented

by the final rule.

Some copies of the sample disclosure forms that have been distributed have

incorrectly listed the citation as 42 U.S.C. 4582d. EPA and HUD have corrected

subsequent versions of the sample disclosure forms, but are aware that some persons

may still be using copies of the forms containing the incorrect cite.

Multiple lessees

46. How many lead information pamphlets must be distributed in a lease transaction involving

multiple lessees? In college towns, large living units are frequently rented on a yearly

basis by groups of students, all of whom are required to sign as lessees. In those cases,

must each individual lessee be given a pamphlet, or can one copy be provided per lease

transaction?

Lessors must provide one copy of the pamphlet per lease transaction; however, in

cases involving multiple lessees, lessors should make additional copies of the

pamphlet readily available and offer them to everyone who signs the lease.

Lessee refusal to sign

47. How do lessors fulfill their disclosure requirements when lessees refuse to accept the lead

information pamphlet and/or refuse to sign the disclosure forms?

When a lessee is unavailable for signature or refuses to accept the pamphlet and/or

sign the disclosure form, lessors may certify attempted delivery of the pamphlet,

disclosure information, and disclosure form. This certification may be included on

the copy of the disclosure form retained by the lessor or attached to that disclosure

form and should indicate exactly how delivery was attempted and what occurred

(e.g., sent material certified mail and never heard from lessee; lessee refused to sign

disclosure form).

For example, lessors may deliver the pamphlet, disclosure information, and

disclosure form by certified mail, return receipt requested. Lessors should then

retain the signed certified mail receipt in their records as evidence that the material

was delivered to the lessees. In cases where the lessee refuses to sign the disclosure

form, lessors may certify in writing that the delivery was attempted and indicate

why a signed and dated disclosure form could not be obtained.

LEAD-BASED PAINT FREE HOUSING

Recordkeeping for exemption

48. What type of paperwork should a rental property owner maintain to prove that the

property is lead-based paint free? Should the inspector or risk assessor provide a

lead-based paint free certificate, or a letter to the owner?

A rental property owner should maintain a copy of the inspection report that is

prepared by a certified inspector and indicates there is no lead-based paint in or on

the target housing in order to prove that the property is lead-based paint free.

Abatement

49. If I own a number of pre-1978 homes which I lease to the public, and I "abate" them

through encapsulation and/or enclosure, can I take advantage of the lead-based paint free

exemption?

The regulations at 24 CFR § 35.82(b) and 40 CFR § 745.101(b) exclude from

coverage leases of target housing that have been found to be lead-based paint free

by an inspector certified under the Federal certification program or under a

federally accredited State or tribal program. Lead-based paint free housing is

target housing that has been found to be free of paint or other surface coatings that

contain lead equal to or in excess of 1.0 milligram per square centimeter or 0.5

percent by weight.

Lead-based paint that has been encapsulated or enclosed would not result in a

finding by a certified inspector that the target housing is free of lead-based paint.

Therefore, the lead-based paint free exemption would not be available to excuse a

lessor from the disclosure requirements under the final rule.

INSPECTIONS

Auctions

50. How does the 10 day inspection period apply to real estate sold at auctions? Real estate

auctions take place at a set time and set place. Typically, there is a period of "due

diligence" prior to the auction when all potential buyers are permitted to view the

property, ask any questions and conduct any testing, such as a termite inspection or a test

of structural soundness. Would it be permissible for the seller to give potential buyers any

information on lead-based paint and allow lead-based paint inspections during this period

as well?

Prior to an auction not associated with a foreclosure proceeding (which would be

exempted under the rule), there is typically a period of "due diligence" that allows

all potential buyers to view the property, ask any questions and conduct any testing,

such as a termite inspection or a test of structural soundness. EPA and HUD have

determined that during this due diligence period, the seller may give potential

buyers any information on lead-based paint, allow lead-based paint inspections, and

otherwise comply with this rule.

EPA and HUD are considering the appropriate way to address auctions lacking a

"due diligence" period.

Certified Inspectors

51. Where can I find a certified inspector or information on certified inspections?

HUD has a current list of certified inspectors available electronically. HUD's

website address is http://www.hud.gov/lea/leahome.html. EPA is in the process of

developing a pamphlet entitled "Finding a Qualified Lead Professional for Your

Home" (EPA-747-F-96-006), which will assist owners in asking appropriate

questions when hiring professional to do this work. This information will be

available in the near future from the National Lead Information Clearinghouse

(NLIC) (see information in Introduction).

PAMPHLET ISSUES

Information changes

52. Has any of the information in the Federal pamphlet changed?

Yes. Some of the telephone numbers for State agencies have changed. The

following list provides the status of numbers only for States which have had

changes. If a state is not listed below, the phone number listed in the pamphlet

remains the primary contact number.

State Phone as listed Status of phone line

Alabama 205-242-5661 Change to 334-613-5373

Alaska 907-465-5152 Also 907-745-3236

Arizona 602-542-7303 Change to 602-230-5830

Connecticut 203-566-5808 Change to 860-509-7299

Hawaii 808-832-5860 Also 808-586-5800

Idaho 208-332-5544 Change to 208-334-6584

Illinois 800-972-2026 Not accessible from outside state

Indiana 317-382-6662 Change to 317-232-8219

Iowa 800-972-2026 Not accessible from outside state

Kentucky 502-564-2154 Also 502-564-4537

Louisiana 504-765-0219 Also 504-765-2547

Massachusetts 800-532-9571 Not accessible from outside state

Minnesota 612-627-5498 Also 612-215-0890

Mississippi 601-960-7463 Also 601-961-5011

Missouri 314-526-4911 Also 800-575-9267

Montana 406-444-3671 Also 406-444-5267

Nebraska 402-471-2451 Typo 402-471-2541

New Mexico 505-841-8024 Change to 505-768-4390

New York 800-458-1158 Not accessible from outside state

North Carolina 919-715-3292 Also 919-715-5381

Oklahoma 405-271-5220 Change to 405-290-8247

Pennsylvania717-782-2884 Change to 717-783-8451

Tennessee 615-741-5683 Also 615-532-7778

Virginia 800-523-4019 Not accessible from outside state

Washington 206-753-2556 Change to 360-753-3855

Wisconsin 608-266-5885 Change to 608-266-5817

Different formats

53. Is the Federal pamphlet, "Protect Your Family from Lead in Your Home" available in

different versions?

Yes. See the list below for information about the availability of both the Federal

pamphlet and sample disclosure forms from various sources.

1018 DOCUMENT AVAILABILITY

PAMPHLET -- "PROTECT YOUR FAMILY FROM LEAD IN YOUR HOME"

(1) 3-Color, 8.5 x 5.5", in English or Spanish

(2) B&W, 8.5 x 11", "double sided double", in English or Spanish

(3) 3-Color or B&W, 8.5 x 5.5", "Internet single sided on 11" paper",

in English or Spanish

(4) B&W, 8.5 x 14", "quad version", in English or Spanish

(includes sample disclosure forms for rental & sales)

SAMPLE LEAD DISCLOSURE FORMS

(5) 8.5 x 11", for rental leases, in English or Spanish

(6) 8.5 x 11", for home sales, in English or Spanish

SOURCE

Single copies of (1) available free from:

National Lead Information Clearinghouse (NLIC)

Phone: 800-424-LEAD

Fax: 202-659-1192

Multiple copies of (1) available from:

U.S. Government Printing Office

Phone: 202-512-1800

$26.00 for 50 copies

Printable electronic files of (3) through (6) available from:

Internet at Internet address: http://www.epa.gov/lead-pm

Available for loan to public from the U.S. EPA:

Color separated negatives of (1)

B&W camera ready copy of (2), (4)-(6)

FAX to U.S. EPA at 202-260-0770

Attention: 1018 Lead Document Control Officer