NEW LEAD REGULATIONS - WHAT YOU NEED TO KNOW Do you list, buy, manage, own or lease residential rental property that was built before 1978? A major new lead law will go into effective on November 1, 2005. This law requires owners of most pre-1978 rental property to comply with new education, inspection, and mitigation requirements. The law is triggered by tenant turnover of a unit or the tenancy of a child under six or pregnant woman (“at risk” tenants); therefore, most landlords will not be required to bring all of their rental units into compliance by this date. The law was recently amended to exempt certain types of properties. Protect yourself and your clients by making sure that you understand the basics of this new law. To read the latest version of this law, click here:
1. Mandatory Lead Class for REALTORS and Landlords 2. Exemptions/Changes to the Lead Law:
If property that does not have a Certificate of Compliance is transferred, the new owner has sixty (60) days from the date of transfer to bring the property into compliance if there is a child under six or pregnant woman is living in the property and must have a visual inspection performed within thirty (30) business days after transfer. Otherwise, the owner need not bring a rental unit into compliance until tenant turnover occurs. The new lead notification requirements are similar to the existing federal and state regulations. The seller (or listing agent) must provide a prospective buyer with the following:
The new lead notification requirements are similar to the existing federal and state regulations. A landlord and/or rental agent must provide a prospective tenant with the following:
A buyer has a legal right to have a period of ten days in which to have a lead inspection conducted within ten days. A seller cannot refuse to allow this inspection but the parties can agree to a shorter period of time. Be careful when referring or arranging for inspectors. While anyone who has completed a three-hour class approved by the Housing Resources Commission may perform a visual inspection, only Environmental Lead Inspectors and Environmental Lead Inspector Technicians who are licensed by the RI Department of Health (DOH) can perform an Independent Clearance Inspection. You can refer buyers and/or landlords to this web site for a list of licensed lead inspectors: http://lead.health.ri.gov/list/leadlicense.php?type=mit Buyers and owners need to know what type of lead inspection to request. The vast majority of rental property was built before 1978. Most buyers who wish to have a lead inspection should request a Conformance or Independent Clearance Inspection, which typically range from $100 - $175 per unit. A Comprehensive Lead Inspection can cost considerably more money. Landlords who intend to gut and rehab their properties in order to meet more stringent Lead Safe standards may choose to request a Comprehensive Lead Inspection instead of the Conformance or Independent Clearance Inspection standards
The new lead law requires affected landlords to obtain a Certificate of Conformance for each rental unit at the time of the first tenant turnover after November 1, 2005 or if a child under six or pregnant woman is living in the unit. The Certificate means that the rental unit meets mitigation standards. There are two higher standards that a landlord can voluntarily choose to meet: lead safe and lead free. According to the HRC, “A Lead Safe Certificate is issued by the Rhode Island Department of Health once a property has undergone a Comprehensive Inspection and all lead hazards are abated. A Lead Free Certificate is issued by the Rhode Island Department of Health to properties that are free of lead.” When arranging for mitigation work or referring a property owner to a mitigation contractor, keep in mind that only a licensed Lead Safe Remodeler/Renovator, who has completed an approved eight-hour class, or a Lead Hazard Reduction Contractor, who has completed even more intensive training, can perform full-scale lead mitigation work. When an inspector issues a Certificate of Conformance, the owner will need to periodically have the unit reinspected. Only a Lead Hazard Reduction Contractor can perform mitigation if a child has been poisoned in the property. Contact Donna Poissant of DOH at 222-7750 for a list of licensees or look up an individual licensee on-line at http://www.health.state.ri.us/hsr/professions/License.htm
Encourage buyers of pre-1978 rental property to begin shopping for insurance early in the process to make sure that they can obtain property/casualty insurance and separate lead coverage, if desired, at an affordable rate. This is especially important for investors who are purchasing four or more units since the pool of insurers is limited for larger properties. If an insurer agrees to provide casualty insurance, the company must offer lead coverage if desired by the insured. This has resulted in insurers forcing property owners to obtain insurance through the state’s FAIR plan. Contact your insurance agent with questions about insurance availability and rates. If you believe that an insurer has wrongfully cancelled or refused to renew a policy, contact Mr. Boulay at the RI Department of Business Regulation at (401) 222-5465 and/or download a complaint form:
If you’re a rental agent or property manager, think carefully before accepting compensation to lease a unit which is not in compliance with the new lead regulations, particularly if there are notices of violation against the property. Although complying with the lead mitigation requirements is the owner’s responsibility – just as it is to comply with building and zoning requirements - the stakes are much higher with lead. Lead lawsuits have resulted in claims in the millions of dollars. If a child under six or pregnant woman is poisoned, and the property owner does not have lead insurance coverage, a plaintiff’s attorney could view you as the deep pocket and claim that you acted negligently by placing an at risk tenant in a non-compliant property.
Property owners, who are concerned about liability issues, may pressure you to help them avoid renting to families with children or pregnant women. Rhode Island fair housing laws prohibit discrimination based on familial status; be careful! Refer qualified, screened applicants to the landlord; let him/her make the final decision. Landlords cannot refuse to rent to families with children or evict tenants because they have given birth to or adopted a child. The only exemptions are for owner-occupied two-families; owner-occupied three and four-family dwellings if one of the units is occupied by a senior citizen or “infirm” person for whom children would be a hardship or property set aside for senior citizens. Bear in mind that some of the properties that qualify for one of these exemptions are still legally required to comply with the new lead law – regardless of whether they rent to families with children
Think long and hard before you agree to perform visual inspections and complete an Affidavit of Completion of Visual Inspection on behalf of a property owner. While it may make sense for a property manager to perform or arrange for this type of work on a regular basis; if you’re a rental agent or listing broker with an out-of-state client, do you want to do this type of work? In order to perform a visual inspection, you must first complete a three-hour Housing Resource Commission (HRC)-approved class. If you make a mistake, and the unit is later found to have chipping or peeling paint that results in a poisoning, both you and the owner could be held responsible. If you decide to perform these inspections, check with your insurance carrier to make certain that your liability insurance covers this type of work. Designated REALTORS – consider establishing an office policy about whether you will allow your agents to perform inspections.
Think even longer and harder about performing mitigation work on behalf of a client. Make sure that you have liability insurance to cover your work if you plan to do this on a regular basis. The lead regulations impose new legal requirements upon owners of pre-1978 rental property. RIAR strongly encourages you to take, at minimum, one of the three-hour lead classes to make sure that you understand these regulations. 13. Resources/Contact Information Most of the information that you or your clients will need to know about the new lead law can be found on the Rhode Island Housing Resources Commission web site. This site contains a list of schools that offer lead classes, licensed inspectors, fact sheets, loan and grant programs, tax credits, and “Frequently Asked Questions” (FAQ’s) about the new lead law (updated on August 23, 2005). http://www.hrc.ri.gov/mitigation.html The lead law was recently amended, so you will find that some of the information on the HRC web site is outdated. The Rhode Island Housing Resources Commission is in the process of writing new regulations to interpret these changes and to adopt fact sheets and other information on its web site. When in doubt, phone the HRC Technical Support Line at (800) 570-0768. REALTORS may also contact the RIAR Legal Department at (401) 785-3650 x 245 or x 246 or email the Legal Hot Line. Please do not refer your customers and clients to RIAR to discuss the lead law. This service is for members only. 14. Conclusion The recent amendments to the lead law are a step in the right direction. Debate about this controversial new law will continue during the 2006 legislative session. If you have concerns about this law or would like it to be changed contact your state elected officials. To contact the Governor, go to http://www.governor.state.ri.us/contact/. To contact your state representative and state senator, go to http://www.sec.state.ri.us/elections/findyourofficials/index.html |