LBP addendum required
An agent is about to write an offer on a co-broke residential property built in 1960. The listing agent says the LBP addendum is not necessary because the home has been gutted.
The federal LBP disclosure rule applies to target housing, which is housing constructed prior to 1978. Exceptions to the rule include housing for the elderly or persons with disabilities (unless any child who is less than six years of age resides or is expected to reside in such housing), and 0-bedroom dwellings such as lofts, efficiencies, and studio apartments.
No offers on residential housing built prior to 1978 can be accepted without a LBP disclosure giving the buyer the opportunity to conduct a LBP inspection or a risk assessment for LBP hazards. If the seller does not provide a LBP addendum, the buyer may prepare an addendum on the assumption that the seller has no notice or knowledge of LBP hazards and use it with the offer. If this information were incorrect, the seller would need to counter the offer to correct the information. The federal penalties for non-compliance can range up to $10,000 for each violation and apply not only to the seller, but also to the real estate agents involved in the transaction who must ensure compliance.
This law applies regardless of what work was done on the home. Unless the work was done in a lead-safe manner, the work may have created lead hazards that otherwise might not have been present. Information regarding home renovations, repairs and lead-safe work practices is available online on the WRA Lead Resource Page at www.wra.org/LBP.
LBP inspection and risk assessment
Should a buyer always test for LBP? Can the seller reject an offer if there is a LBP contingency?
According to federal law, the buyer must be given the opportunity to have a LBP inspection or risk assessment conducted. A LBP inspection tells the lead content of painted surfaces, while a risk assessment identifies any LBP hazards and provides hazard reduction suggestions. A buyer is not required to have a LBP inspection, but must be given the opportunity. It is not the seller’s decision whether to allow LBP inspections and risk assessments, and a seller cannot counter out a LBP inspection contingency or reject an offer solely because it includes a LBP inspection contingency. A seller may, however, limit a buyer’s right to void the sale if LBP is found.
A listing of certified lead professionals is available at
dhfs.wisconsin.gov/lead/CompanyList/index.htm.
Rental units
A broker’s client is purchasing a two-unit property built during the 1950’s and plans to rent one or both of the units. Does a landlord have to provide tenants with a LBP disclosure?
Yes, the federal LBP disclosures and pamphlets must be provided for all leases and rentals of target housing. Verbal rental agreements, periodic tenancies such as a month-to-month tenancy and subleases are included, but the rule does not apply to leases for 100 days or less. LBP disclosures must be given at the beginning of a lease or rental term, but need not be repeated for the renewal or extension of existing leases where the landlord previously disclosed all information required by the rules and no new information concerning LBP on the premises has come to the attention of the landlord.
The broker may suggest that the client use the WRA Addendum L, “Lead-Based Paint Addendum to Lease,” together with the mandatory EPA brochure, “Protect Your Family From Lead in Your Home.” For additional information, see Legal Update 03.07, the “Residential Rental Primer,” online at www.wra.org/LU0307.