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Lead Paint: What’s the Deal?

by Peter Scherman of The B&B Team

The reality of selling a bed and breakfast is a complex one. There are offers, counter offers, discussions of price and terms, lawyers or agents to prepare contracts, accountants to confirm financial information, inspectors to determine soundness, and numerous other professionals who all play a role in the transaction.

While some innkeepers have worked with real estate or inn brokers, some have elected to sell “by owner.” In years past, this was a fairly simple process, but as our world has become more litigious and fraught with regulation, most innkeepers are unaware of state and federal regulations which can affect the transfer of real estate, whether a private or brokered sale.

Specifically, new federal regulations requiring disclosure of information pertaining to lead based paint hazards touch the Innkeeping community with grave seriousness. For those with an agent to advise you, this article may not be critically important, but for the innkeeper going it alone to sell your B&B, take note of some things which could get you into trouble and/or void your transaction if ignored.

Many states today have regulations regarding the disclosure of known defects in residential property. Real estate agents will routinely provide you with the forms that pertain to your state. However, even if you aren’t working through a broker, you may still be required by law to make the necessary disclosures, and you should find this out before entering into a transaction to sell or buy. Whether your state has disclosure requirements or not, one thing is certain, the Federal Government now requires virtually EVERYONE who sells or leases residential property that was built prior to 1978 to disclose what they know or don’t know about the existence of lead based paint hazards in their home. Here’s a summary:

Section 1018 of the Residential Lead-Based Paint Hazard Reduction Act of 1992 directs EPA and HUD to jointly issue regulations requiring disclosure of known lead-based paint and/or lead-based paint hazards by persons selling or leasing housing constructed before the phase out of residential lead-based paint use in 1978. Under that authority, EPA and HUD have established the following requirements, effective December 6, 1996 for everyone in the United States:

(1) Sellers and lessors of most residential housing built before 1978 must disclose the presence of known lead-based paint and/or lead-based paint hazards in the housing;

(2) sellers and lessors must provide purchasers and lessees with any available records or reports pertaining to the presence of lead-based paint and/or lead-based paint hazards;

(3) sellers and lessors must provide purchasers and lessees with a federally approved lead hazard information pamphlet;

(4) sellers must provide purchasers with a 10-day opportunity to conduct a risk assessment or inspection for the presence of lead-based paint and/or lead-based paint hazards before the purchaser is obligated under any purchase contract;

(5) sales and leasing contracts must include certain disclosure and acknowledgment language; and

(6) agents must ensure compliance with these requirements.

Does this sound silly? Don’t think this pertains to you? It is true that the regulations were intended, primarily, to protect children and the elderly from lead based hazards, but consider this real life example from the Innkeeping world.

In 1990 John and Susan Lang bought Killahevlin, a wonderful Edwardian home on the historic register, and commenced to renovate it to exacting standards in order to have one of the finest bed & breakfast inns in Virginia. A longtime handyman, John personally removed doors for stripping, stripped mantels and molding and trim of old paint, restoring this fine old mansion to its former glory. The process was exhaustive and thorough.

After several months John wasn’t feeling well. He was experiencing unexplainable nausea, headaches, and light headedness. At first his doctor couldn’t find anything wrong, but at John’s suggestion he tested for lead in John’s blood. Bingo!

After a costly treatment, John recovered completely, but lead is a cumulative poison, and he must use care to avoid additional exposure. Subsequent renovations were handled with other methods and adequate preventative measures. The problem was easily solved, but had he known about his risks from the beginning, he could have avoided a serious and potentially dangerous illness.

Before becoming unduly alarmed, however, let’s keep things in perspective. If you own an old home or are considering buying one, it is almost certain that there will be lead based paint somewhere in the house, probably beneath layers of newer paint. Under most circumstances, this will never be a hazard to you, and certainly not to your guests, especially if you are as fastidious as most innkeepers are. But if you are renovating, be aware of the probable existence of lead paint which, like old asbestos covering pipes in the basement, could be a hazard if handled improperly. Know what you are doing. A little bit of education goes a long way in protecting your health.

And if you are selling your bed & breakfast, keep this in mind: Be aware of and comply with all state property condition and federal lead based paint regulations which apply to your sale, whether private or brokered. When buying, be sure you receive all the information and disclosures you are entitled to. If you are working with a broker and these points have not been brought to your attention, ask. If you’ve been asked by an agent to comply with the requirements, cooperate. And if you are “going it alone,” just make sure you don’t get caught in the regulatory minefield without a sweeper!

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