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
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TABLE OF CONTENTS
TOPTC 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
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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 Ri l l
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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.
APPIJCABTIJTY
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?
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Yes. Housing that is provided in lieu of monetary compensation to employees,
pastors, etc. is not exempt.
Mohile 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
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"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.
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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
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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?
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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 II.S.C. 4852d
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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
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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 PATNT 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
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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 TSSTIES
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
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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
Pennsylvania 717-
-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 AVATLABTLTTY
PAMPHLET - "PROTECT YOUR FAMILY FROM I/EAD TN 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
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(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
Printahle electronic files of (3) through (6) available from:
Internet at Internet address: http://www.epa.gov/lead-pm
Available for loan to puhlic 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
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