Sellers and landlords of single-family and multi-unit housing constructed prior to 1978 now have new disclosure requirements to fulfill. The U.S. Department of Housing and Urban Development (HUD) and the U.S. Environmental Protection Agency (EPA) have jointly adopted final lead-based paint disclosure regulations to implement the Federal Residential Lead-Based Paint Hazard Reduction Act.

These new regulations became effective September 6, 1996 for owners of such housing containing more than four (4) units. Owners of housing containing one to four (4) units (including single family homes) will have to comply beginning December 6, 1996.

The regulations impose the following obligations on sellers and landlords of such housing:

a. Before a buyer or tenant becomes obligated under the sale contract or lease, the seller or landlord must:

- provide the buyer or tenant with the pamphlet prepared by the EPA entitled Protect Your Family from Lead in Your Home (copies may be ordered through the National Lead Information Clearinghouse, toll free, at 800/424-LEAD), and
- disclose to its selling or leasing agent and the buyer or tenant the presence of any known lead-based paint and/or lead-based paint hazards in the property, and
- provide its selling or leasing agent and the buyer or tenant any available records or reports pertaining to lead-based paint and/or lead-based paint hazards in the property.

- the seller must give the buyer a ten (10) day period to conduct a lead-based paint inspection or risk assessment (unless the parties have agreed in writing to a longer or shorter period or to waive such inspection rights).

c. Every sale contract or lease must include as a separate page:

- a disclosure form containing a specified lead warning statement and required acknowledgments, which must be signed by all of the parties to the transaction, including the owner's selling or leasing agent. Sellers, landlords and their agents must retain copies of the signed forms for three (3) years from the closing date of sale or the commencement date of the lease.

Any agent who enters into a contract with a seller or landlord for the purpose of selling or leasing such housing has an obligation to inform the seller or the landlord of its disclosure obligations under the regulations, and to ensure that the seller or landlord has taken the required disclosure actions outlined above.

The EPA and HUD have authority under the regulations to impose monetary penalties up to $10,000 on any seller, landlord or agent who knowingly violates the lead-based paint disclosure requirements. Such a person may also be subject to criminal fines and imprisonment and may be sued for an amount equal to three (3) times the actual damages incurred by the buyer or tenant.

The regulations impose only a duty to disclose. Sellers and landlords have no obligation under the regulations to inspect their properties for lead-based paint or to remove lead-based paint or abate any lead-based hazards that may exist on their properties.

The following types of housing are excluded from these regulations:

- housing for the elderly (reserved for persons 62 and over) and handicapped (unless occupied by a child under 6 years of age) and 0-bedroom units (efficiencies, studios, dormitories and single room occupancy units),
- foreclosure sales,
- housing found to be lead-based paint free by an inspector certified under a federal certification program (or, until a federal program is in place, a state program),
- short-term non-renewable leases of 100 days or less, and
- lease renewals when the landlord has previously provided full disclosure.

While violations expose an owner to civil and criminal penalties, failure to comply with the disclosure requirements will not invalidate a sale contract, lease or property transfer or give the buyer or tenant a right of rescission after the sale contract or lease has become effective.

Illinois landlords have been required under the Illinois Lead Poisoning Prevention Act to furnish existing and prospective tenants of housing-built before 1978 with a copy of a lead-based paint informational brochure published by the Illinois Department of Public Health ("IDPH"). Since the federal brochure is more comprehensive than the state brochure, IDPH has approved the use of the federal brochure in place of the state brochure.

In addition to the disclosure requirements described above, there are a variety of requirements at the federal, state, and local levels involving inspection and abatement of lead-based paint hazards. Holleb & Coff has experience advising building owners, sellers and landlords, as well as prospective buyers and tenants who may have lead-based paint issues at their properties. We can help you determine whether such laws and regulations apply to you. We also work with consultants and contractors capable of addressing lead-based paint problems and can assist you in selecting appropriate ones.

This bulletin provides readers with information on general issues, and not substantive legal advice or legal opinion on any specific facts or circumstances. If you have any questions about this Bulletin or desire copies of the warning statements, etc. described in this Bulletin, please contact your attorney.