All REALTORS® are aware that federal law requires certain lead-based paint disclosures be made in connection with the sale of a home built prior to 1978.  What some REALTORS® may not know is that under these federal regulations, real estate agents have an obligation to explain these requirements AND to make certain that the seller complies with these requirements.  Courts have held real estate agents liable for technical violations of these requirements such as providing a copy of a completed, but unsigned, disclosure form. Obviously, it is very important that REALTORS® have a clear understanding of the federal requirements as it relates to lead-based paint.

Lead-Based Paint Disclosure Form

Unlike other disclosure forms, the lead-based paint disclosure form is a three-party agreement. Sellers are required to acknowledge that they have disclosed any information they have regarding the presence of known lead-based paint/lead‑based paint hazards (or indicate that the seller has no knowledge). The seller must provide a list of available records pertaining to lead-based paint or certify that no such records exist.  Buyers are required to acknowledge whether they have received lead-based-paint information from the seller and that they are aware of their 10-day their inspection opportunity. Real estate agents are required to confirm that they have advised the seller of their disclosure obligations and that the agent is aware of their obligation to make certain that the seller complies with the law. All three parties must sign the lead-based paint disclosure form which should be attached to the purchase agreement

Here is a link to the federal government’s latest sample disclosure form.  https://www.epa.gov/sites/default/files/documents/selr_eng.pdf While the regulations do not require use of this exact form, Realtors who use a different form should make certain that their form has been reviewed by counsel to make certain that it complies with all of the regulatory requirements.

Federal Information Pamphlet

The federal government has created a pamphlet entitled “Protect Your Family from Lead in Your Home.” Buyers of pre-1978 homes must be provided with a copy of this pamphlet.. Purchase agreements should contain both the federally mandated Lead Warning Statement and a lead-based paint inspection contingency clause (which may give the buyer the option of waiving such an inspection).

Inspection Contingency Clause

A typical lead-based paint inspection clause in a purchase agreement reads as follows:

• Buyer shall have ______ days after the date of this Agreement to conduct an inspection of the property for the presence of lead‑based paint and/or lead-based paint hazards. (Federal regulations require a 10-day period or other mutually agreed upon period of time.) If Buyer is not satisfied with the results of this inspection, upon notice from Buyer to Seller within this period, this Agreement shall terminate and any deposit shall be refunded to Buyer. 
•  Buyer hereby waives his/her opportunity to conduct a risk assessment or inspection for the presence of lead-based paint and/or lead-based paint hazards.

Disclosures Must Be Pre-Contract

All lead-based paint disclosure requirements must occur prior to the seller’s acceptance of a buyer’s offer. Unlike the Michigan seller’s disclosure law, there is no mechanism for fixing late compliance with lead-based paint disclosure requirements. If the lead-based paint requirements are not timely met, the buyer may have a cause of action whether the disclosures are made later or not at all.  The buyers do not waive their rights by proceeding to close.

Remedies and Record Retention

Violations of the federal law can result in civil and criminal penalties and potential treble damages in a private civil suit.  Agents are required to keep disclosure records for a minimum of three (3) years.