Copyright Institute of Real Estate Management Nov/Dec 1999 Over the last decades, the amount of lead in the U.S. environment has decreased significantly, Environmental regulations have reduced or eliminated lead in gas, industrial emissions, and coatings. "At one time, there were 4.5 million children with high lead levels; today, that number is down to 890,000. But that still makes lead the number one environmental disease," says David Jacobs, director of HUD's Lead Hazard Control division.
And with approximately three quarters of the nation's housing stock still containing some lead-based paint, educating the public on the proper maintenance and care of painted surfaces remains a priority. Since the Residential Lead-Based Paint Hazard Reduction Act (Title X) took effect at the end of 1996, the owners and managers of multifamily housing have formed one of the first lines of defense against childhood lead poisoning.
Under Title X, sellers and lessors of almost all housing built before 1978 must inform buyers and renters of the possible presence of lead-based paints on a property and disclose the known presence of lead-paint hazards. "Known presence" means that sellers or lessors must disclose the results of any lead testing performed. However, they are not required to test for lead. All covered sellers or lessors also provide purchasers or lessees with a copy of the federally approved pamphlet, "Protect Your Family from Lead in Your Home" and to retain for a period of three years, proof (in the form of a signed acknowledgment) that the individual has received the pamphlet.
When these procedures are combined with responsible maintenance and repair practices, most experts agree that lead-based paint can be effectively managed in place. Indeed the Alliance to End Childhood Lead Poisoning notes that "lead poisoning and other indoor environmental problems can best be solved by the people already doing work on the house-property owners, maintenance workers, renovators, and homeowners... ."
Lead Enforcement in Action
In the nearly three years since the regulations under Title X went into effect, most real estate managers have developed comprehensive programs to comply with federal and state regulations and to ensure the health and safety of their residents. However, recent enforcement actions by HUD and the EPA have resulted in fines for several management companies in the Washington, D.C., area and pending investigations of at least 45 cases nationwide. Now is certainly a good time to reevaluate the effectiveness of lead-disclosure policies at every company.
According to Jacobs, the properties investigated thus far by HUD and EPA fall into one of several groups-properties where a child has lead poisoning, properties with financial or managerial problems that may not have the resources to keep lead paint in proper repair, and properties that have been cited in complaints through the lead hotline or other avenues.
"Generally, our first step is to send investigators to look through the files of a few units and determine if the appropriate forms are in place and if signatures and dates are correct," says Jacobs. He notes that if significant errors are found, a letter will be sent to the landlord requesting files for the entire property and sometimes even for all covered properties in the city Then, depending upon the severity of the offense and the responsiveness of the owner, HUD will either pursue an administrative solution or turn the case over to the Department of justice. However, Jacobs notes that HUD's goal is "not to collect fines but to ensure enforcement that will protect children from lead poisoning."
To assist managers in ensuring that their lead disclosure practices are correct, the EPA has provided compliance assistance, as well as an audit policy (at www.epa.gov/oeca/ ore/apolguid.html) and a small business policy (www.epa.gov/oeca/sm busi.html) that provide incentives for companies to voluntarily disclose and expeditiously correct violations. These policies encourage companies to conduct self-audits to determine if they are in compliance. Under these programs, participants may substantially reduce or even eliminate penalties.
"I think there is a good understanding of lead-disclosure regulations across the board. The regulation has been in place for three years and the brochures and warning notice language are readily available," says Jesse Baskerville, director of the EPA Toxics and Pesticides Enforcement Division. With this in mind, EPA is discontinuing its earlier policy of first issuing a notice of noncompliance to properties when no actual lead poisoning is present. Instead, noncompliance will trigger enforcement procedures immediately.
Confronting Problems
While most managers interviewed believe that they are in full compliance with the law, Patrick Connor, president of The Connor Group thinks differently. As a trainer and consultant in lead-paint disclosure practices, he regularly encounters firms that fall into noncompliance errors. In auditing your lead-disclosure policies, Connor suggests that you start at the beginning. "In many cases, the wording on the disclosure form itself is wrong; managers, printers, or attorneys have altered the verbiage so it is incorrect. Many people have mistakenly picked up the lead warning statement for the sales contract instead of the lease. If the language is wrong, the whole form is wrong."
Another common error is failing to check the box indicating the known presence of lead on the property, says Connor. In many cases, this may be an honest mistake by the site manager, who does not even know that when the property was refinanced two years ago, the required Phase I audit revealed the presence of lead. "The form could just be sitting in a file in the finance or accounting department, but technically, the company knows and has inadvertently created fraud," says Connor.
To help ensure that managers are informed, says Maureen Lydon, associate director of EPNs Chemical, Commercial Services and Municipal Division, the EPA has provided onsite compliance assistance, compliance-assistance mailings, seminars, and a web site (www.epa-gov/opptintr/lead). The agency also maintains a hotline with HUD (800-424LEAD). "EPA also partners with local community groups to inform citizens about lead. We encourage managers to call EPA if they need assistance in complying," says Lydon.
Especially when taking over a property, managers should check all files for environmental information. And if new knowledge is gained, the form must be modified to reflect it. While it is not required by the regulations, Connor advises owners and managers to do some investigative work about existing environmental knowledge.
"The health department is another source of possible information on lead. If a child has had lead poisoning, the local health department will have tested the unit and probably notified the owner of the results," says Baskerville. While the presence of lead in one unit does not indicate knowledge of the entire property, care must be taken to inform residents of the presence of lead paint in units where it is known to exist.
Ensuring that all residents have received the lead pamphlet and signed the acknowledgment is key to ensuring compliance. "Regional and district managers should aggressively look for lead compliance during reviews, says Connor. At Chicago's Draper and Kramer, Vice President Greg Martin, CPM(R), uses periodic shopping checks and file reviews to ensure that acknowledgments are in place. "We hand out the pamphlet to every prospect and include the acknowledgment and signature line as part of every new lease," says Martin.
Irma Schretter, CPM, and Cheryl Nichols, ARM(R), had been distributing the lead pamphlet and having the acknowledgment signed during move-in, but recently decided to change the procedure so that the tenant signs when the application is completed. "This change reflects a new regulation in Massachusetts that permits renters to decide not to lease after they are informed about the presence of lead," says Nichols. Their firm, S-C Management, manages primarily subsidized and taxcredit properties, so the annual recertification is an ideal time to check each file for the lead acknowledgment. "We have really had very few problems with residents getting forms signed; even in the family developments. Massachusetts had its own lead regulations before the federal statute, so residents are accustomed to the procedure," says Schretter.
Notification of existing residents who are renewing can be more problematic, according to Gary Holme, CPM, president of Los Angelesbased The Beaumont Company. "We trained our managers to make the procedure part of the new lease signing, but with long-time residents where there is no change in tenancy and no rent increase, we have some difficulty," says Holme.
Both Connor and Jacob advise sending the pamphlet certified with return receipt requested, but Holme sadly notes that sometimes residents even refuse to accept the certified letter or are not at home and won't make the trip to the post office. "Then keep the letter in the file as proof of effort," says Connor.
The End Result
With training and follow through, complying with lead paint disclosure regulations does not have to be difficult. Nor is the goal to frighten residents away from properties with lead. "When lead is properly maintained and managed, it is not a hazard. We just want to arouse interest and teach residents and owners to cope effectively," says Jacobs.
| [Sidebar] |
| Renovation and Lead |
| The need to notify residents does riot end with lease signing. Under the provisions of the EPA rule, "Requirements for Hazard Education before Renovation of Target Housing," which went into effect June 1, 1999, owners and managers of rental property built prior to 1978 must ensure that a pamphlet on lead safety is distribUted to all residents before renovation is done in their units or in common areas. Although the distribution of the pamphlet entitled "Protect Your Family from Lead in Your Home," is the responsibility of the renovation contractor, the definitions of renovation also may apply to some work done by in-house maintenance personnel. |
| Renovation Defined |
| The rule generally covers any renovation activity that disturbs more than two square feet of painted surface. Under the rule, renovation includes, but is not limited to, modification or removal of doors, windows, and other painted components, surface preparation activities such as sanding and scraping, and major replastering, rewiring, or replumbing work. In general, the size of the surface involved seems to be the deciding factor in determining whether work is a renovation subject to the rule. The rule excludes minor repairs or maintenance activity that disrupt less than two square feet of painted surface. |
| Emergency repairs, defined as operations necessitated by the unexpected failure of equipment, which if not immediately attended to would present a safety or public health hazard or would produce significant damage to the property, also are exempted. Work on components certified as lead free also are exempt from the notification rule. |
| For renovations in tenant-occupied units, the renovator must provide a lead pamphlet to the owner before renovation begins and obtain confirmation of receipt or mail the pamphlet to the owner seven days before renovation begins and document with a certificate of mailing. The renovator also must provide the lead pamphlet to the tenants either by delivering it to the apartments before renovation be-ins and documenting the delivery with either a confirmation or receipt of self-certification of delivery. Instead, a pamphlet may be mailed to each tenant seven days prior to renovation, again documented with a certificate of mailing (which is different than certified mail). |
| The procedure for notifying residents prior to renovations in common areas is slightly different, although the types of properties covered and the definition of renovation remain the same. Renovators must notify all residents of the renovation and make the lead information pamphlet available. However, the pamphlet does not have to be distributed to residents. In both cases, records demonstrating compliance must be kept for three years following the completion of the renovation. |
| Notification in Action |
| While the notification is really the responsibility of any subcontractor used, in most managers we spoke with have decided to handle notification themselves, even if it means added liability. "We send the pamphlet certified mail several days before the work is done. We also talk to the contractors to be sure that they understand the parameters of the regulations," says Greg Martin, CPM" vice president with Chicago's Draper and Kramer. "Most managers do not want contractors going door to door delivering notices@" notes Patrick Connor, president of The Connor Group. However, he cautions that by passing out the pamphlet, managers assume "a degree of knowledge" they might want to avoid. |
| "This new regulation brings in a group that before had little exposure to lead notification-the maintenance team, says Connor. He advises that the easiest way to ensure compliance is to keep a supply of lead pamphlets in each tool box and amend the lead acknowledgment to the back of the work order. "In this way, the resident can sign the acknowledgment before work is begun and the paperwork will be returned along with the completed work order," says Connor. "If work is done while the resident is out, the maintenance worker can leave the pamphlet on the table and initial the form him- or herself. The rule is fairly flexible." |
| [Author Affiliation] |
| Howard Franklin is a Chicago-based freelance writer. |
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