Lead based paints were commonly used in the United States until it was found that the lead in the paint posed serious health risks. In 1977, the Consumer Product Safety Commission banned the use of lead in paint. Because of this, all properties built before 1978 require a Lead Based Paint Disclosure which is mandated by the federal government. Here in Texas, the form we use is a form from the Texas Real Estate Commission, Addendum for Seller’s Disclosure of Information on Lead-Based Paint and Lead Based-Paint Hazards as Required by Federal Law. Thanks to its rather lengthy title, most people simply call it the Lead Based Paint Disclosure.
The Dangers of Lead Based Paint
If you know anything about lead paint, you will understand that lead in lead based paint is highly toxic and has been found to cause many health issues, particularly in children. When ingested or absorbed into the body, lead can cause brain damage as well as kidney, nerve, and blood issues. Lead is also linked to behavioral problems, learning disabilities, seizures, and death in children and infants. You can learn more about both the the dangers of lead as well as some of the ways you can help protect you and your family from lead in the informational brochure, Protect Your Family From Lead in Your Home (PDF).
Lead Based Paint Disclosure
Let’s take a look at the Lead Based Paint Disclosure form, what it means, and break it down for you so that you can better understand what it is you’re being asked to sign and why.
A. LEAD WARNING STATEMENT: “Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. According to studies, lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller’s possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-paint hazards is recommended prior to purchase.”
NOTICE: Inspector must be properly certified as required by federal law.
Like most forms, the first section provides the groundwork of the form, in this case explaining why the form exists and what its purpose is. This section sets forth the requirement of disclosure of lead based paint and gives a basic warning about why lead is dangerous. It also recommends the buyer conduct a risk assessment or inspection for lead based paint hazards prior to purchasing the home. As with anything in bold on a contract form, it is important to note the last line, which states that any inspector must be properly certified as required by federal law. Remember, the law behind this disclosure is on the federal level and as such, the inspectors involved in the process must meet federal certification standards (ie your Uncle Bob is probably not qualified to tell you if there are lead based paint hazards in the home).
B. SELLER’S DISCLOSURE:
1. PRESENCE OF LEAD-BASED PAINT AND/OR LEAD-BASED PAINT HAZARDS (check one box only):
(a) Known lead-based paint and/or lead-based paint hazards are present in the Property (explain): __________________________________________.
(b) Seller has no actual knowledge of lead-based paint and/or lead-based paint hazards in the Property.
2. RECORDS AND REPORTS AVAILABLE TO SELLER (check one box only):
(a) Seller has provided the purchaser with all available records and reports pertaining to lead-based paint and/or lead-based paint hazards in the Property (list documents): __________________________________________.
(b) Seller has no reports or records pertaining to lead-based paint and/or lead-based paint hazards in the Property
This section covers the seller’s knowledge of lead based paint hazards in the home. Under Section 1, the seller should choose either (a) or (b) indicated whether they have any knowledge of lead based paint hazards. If the seller selects (a) they will need to provide an explanation of what they know.
Section 2 covers any reports or records (such as previous inspections or lead abatement information) the seller might have. If the seller has any records, they would check box (a) and then be required to list those items and provide them to the buyer. If the seller has no knowledge of lead based paint hazards in the home, they would check box (b) as they would not have any records.
The two sections check boxes should match – if you check box (a) in Section 1, you should check box (a) in Section 2, same with checking box (b). It is possible to check Section 1.(a) indicating you have knowledge of the presence of lead based paint hazards and still check Section 2.(b) indicating you have no records or reports of this fact, but that’s probably going to bring some questions to you as a seller since you should keep good records of things like this and be able to produce them to future buyers. Not having the records will most likely raise a red flag to the buyers and their agent, because if you didn’t keep track of those documents, the logic follows that you may not have kept good records of other things in the home and that kind of thinking always scares buyers (the “what else didn’t you do” kind of thinking).
C. BUYER’S RIGHTS (check one box only):
1. Buyer waives the opportunity to conduct a risk assessment or inspection of the Property for the presence of lead-based paint or lead-based paint hazards.
2. Within ten days after the effective date of this contract, Buyer may have the Property inspected by inspectors selected by Buyer. If lead-based paint or lead-based paint hazards are present, Buyer may terminate this contract by giving Seller written notice within 14 days after the effective date of this contract, and the earnest money will be refunded to Buyer.
This section is to be filled out by the buyer and indicates whether they want to have an inspection for lead based paint done on the property. If they check the first box, they are deciding not to conduct such an inspection. Checking the second box, opens up a new timeline within the contract, giving them 14 days with which to inspect the property and determine whether or not they want to proceed with the purchase. If they decide to terminate the contract within those 14 days, they will receive a refund of their earnest money. This notification must be in writing and it is suggested that the buyer use the Notice of Buyer’s Termination of Contract form along with a Release of Earnest Money form.
D. BUYER’S ACKNOWLEDGMENT (check applicable boxes):
1. Buyer has received copies of all information listed above.
2. Buyer has received the pamphlet Protect Your Family from Lead in Your Home.
Once again, this section is to be filled out by the buyer. If the seller indicated there were any reports or records available, the buyer should receive copies of those items and check the first box. The buyer should check the second box once they have received the pamphlet Protect Your Family from Lead in Your Home, which we provided a link to earlier in this post. This box should always be checked as the buyer should be given this information by the sellers when buying any property built before 1978.
E. BROKERS’ ACKNOWLEDGMENT: Brokers have informed Seller of Seller’s obligations under 42 U.S.C. 4852d to: (a) provide Buyer with the federally approved pamphlet on lead poisoning prevention; (b) complete this addendum; (c) disclose any known lead-based paint and/or lead-based paint hazards in the Property; (d) deliver all records and reports to Buyer pertaining to lead-based paint and/or lead-based paint hazards in the Property; (e)provide Buyer a period of up to 10 days to have the Property inspected; and (f) retain a completed copy of this addendum for at least 3 years following the sale. Brokers are aware of their responsibility to ensure compliance.
This section is for the brokers, who also have to sign the form – both the seller’s broker and the buyer’s broker. This helps keep everyone in check and make sure everyone is being notified of their rights and obligations when it comes to lead based paint disclosure. This serves as a reminder to all parties that the brokers have a duty to disclose and work with their clients to do so as well. It also notes that the broker must keep a record of this form for 3 years. These are occasionally audited by the government and failure to have them or have them filled out properly carries with it stiff penalties.
F. CERTIFICATION OF ACCURACY: The following persons have reviewed the information above and certify, to the best of their knowledge, that the information they have provided is true and accurate.
The final section before the signatures, it simply states that everyone has reviewed the information and that the information pertaining to the lead based paint disclosure is true and accurate. This statement covers the sellers and buyers as well as their brokers. All parties are required to sign and date the form below this and their signatures serve as certification of this paragraph.
That’s the whole Lead Based Paint Disclosure form. It’s rather simple, but carries with it a lot of weight and responsibility. Failure to properly disclosure lead based paint hazards can come at a hefty price as it is a federal law and required on most real estate transactions. There are only a few times when this form is not required – homes sold as foreclosures, homes and/or rentals where the living area and sleeping area are not separate (ie efficiency apartments), and housing for the eldery or disabled where no children under 6 are expected to live. If you’re buying or selling a home that was built before 1978, you will need to utilize this form and make sure that you disclose any knowledge you might have about lead based paint or lead based paint hazards in the home.
image courtesy of Identity Photogr@phy