Exposure to lead was first regulated in the workplace environment by the Occupational Safety and Health Administrations in the early 1970’s. Health researchers then turned their attention to children. Researchers found that children were especially susceptible to lead poisoning. As a result, Congress passed the Residential Lead-Based Paint Hazard Reduction Act of 1992 (“Lead Hazard Act”) as an adjunct to the Toxic Substances Control Act. The Act authorized the United States Environmental Protection Agency (“EPA”) to promulgate regulations regarding the “disclosure of lead-based paint hazards in target housing which is offered for sale or lease.” 42 U.S.C.A. Sec. 4852(a)(1). EPA promulgated the Real Estate Notification and Disclosure Rule (“Disclosure Rule”) in 1996. The Disclosure Rule can be found at 40 CFR 745, Subpart F and 24 CFR 35 Subpart A. Under the Disclosure Rule, lessors and sellers are required to provide lessees and purchasers of “target housing” with certain information. “Target housing” is defined as “any housing constructed prior to 1978…” 40 CFR 745.103.
The Disclosure Rule requires a Lead Warning Statement with the following language:
Housing built before 1978 may contain lead-based paint. Lead from paint, paint chips, and dust can pose health hazards if not managed properly. Lead exposure is especially harmful to young children and pregnant women. Before renting pre-1978 housing, lessors must disclose the presence of lead-based paint and / or lead-based paint hazards in the dwelling. Lessees must also receive a federally approved pamphlet on lead poising prevention.
The text of the regulation is clear that “[e]ach contract to lease target housing shall include a Lead Warning Statement with the following language…” 40 CFR 745.113(b)(1). There is no room to deviate.
Recently, the EPA successfully prosecuted a landlord for violating this Lead Warning Statement regulation. In Vidiksis v. EPA, 612 F.3d 1150 (11th Circuit), a Georgia landlord was sued by the EPA in an administrative action alleging 69 violations of the Act involving failure to provide the required Lead Warning Statement. The landlord was assessed a penalty of $97,545. The landlord appealed the adverse decision initially to the EPA’s Environmental Appeals Board and then to the Eleventh Circuit Court of Appeals where the administrative decision was upheld. The Vidiksis decision provides some valuable lessons to us all.
There shall be no deviation from the precise language of the Lead Warning Statement as provided in the regulation. Vidiksis had a real estate agent prepare the lease agreement which had a “Lead Paint Notice” but it did not specifically follow the prescribed language. Additionally, the lease did not effectively disclose Vidiksis’ knowledge or lack of knowledge of the presence of lead-based paint. In addition to suing the landlord, EPA also sued the real estate agent. The real estate agent settled with EPA and paid a civil penalty of $5,000.
Moral of the story, contracts and lease agreements must contain the Lead Warning Statement copied verbatim from the regulation. There is no extra credit for creativity or artistic license. Indeed, there can be a severe penalty for any deviations.