Understanding Rights and Responsibilities of Sellers and Buyers When Lead Paint Is an Issue In A Residential Real Estate Transaction

The Residential Lead-Based Paint Hazard Act of 1992, 42 U.S.C. §4851, also known as Title X, requires that all prospective purchasers of a home built prior to 1978 must receive a lead paint disclosure notice. Most real estate professionals and home buyers are probably familiar with this notice.  It advises the buyer of the risks of lead paint, which include permanent neurological damage, learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead paint is a particular hazard to small children and pregnant women. The notice also requires the seller to disclose whether the seller has knowledge of lead paint in the home.

In the greater Philadelphia area, it is common to find homes that are built prior to 1978.  Does this mean that a buyer should test any older home for lead paint?  If the buyer does test and the test reveals lead paint dust levels greater than the allowable limits under EPA guidelines, what happens then?  Are the sellers legally obligated to remove the lead paint?  Are they obligated to disclose the test results to future buyers?  We’ll take these questions in order.

First, a lead paint test probably doesn’t need to be ordered for every older home.  The mere presence of lead paint in a home may not pose a health hazard.  It’s the ingestion, either through breathing, or in the case of a small child, eating, of lead paint flakes or dust that presents the biggest hazard. Typically lead paint dust or flakes will be found on the floor or windowsill near a window or door.  Constant opening and closing of the window or door that causes the paint to flake and chip.  A buyer will want to check that the windows and doors operate cleanly, with no visible chipping or flaking of paint. Buyers should their licensed home inspector if he or she thinks further testing of these areas is necessary. Lead paint testing is a separate test from a typical home inspection test, and must be done by a contractor specifically licensed to perform lead paint inspections.  Under federal law, a home buyer must perform these inspections, and deliver the results to the seller, with ten days of the signing of the contract.  It is also important to know that foreclosure sales of residential property are exempt from the federal lead-based paint disclosure regulations, but a subsequent resale by the purchaser in a foreclosure sale is not exempt.

If you are a seller of a home in which a buyer has performed a test that reveals the presence of lead dust in excess of the allowable EPA limits, you are not obligated to remediate the condition; however if the seller refuses to remediate, most real estate contracts allow the buyer to terminate the contract and receive a return of the deposit.  It is important to know that, pursuant to federal law, the seller cannot refuse to allow the buyer to perform a lead paint test.  If the seller or buyer chooses to remediate, the removal of the lead paint must be done by a contractor licensed in lead paint removal.

Once a seller has actual knowledge of the presence of lead paint in the home, the seller is required under federal law to disclose this knowledge to prospective buyers.  This may mean that the seller has to amend a previously completed seller’s disclosure statement, or make sure that the information is disclosed directly in the agreement of sale.  Failure to disclose actual knowledge of lead paint to a prospective purchaser is a violation of federal law and could result in civil penalties of as much as $11,000 per violation and also up to three times the actual damages to any person injured as a result of the violation.  However, a violation of the disclosure requirements does not automatically invalidate the agreement of sale.

Armed with this basic knowledge of the rights and responsibilities of buyers and sellers when dealing with lead paint, each party can make the best decision for himself or herself in buying an older home.