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April 2007 Newsletter         
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The Lion (EPA) Roars!

The back page of the March 2007 Alban
newsletter contained a brief reminder about
complying with both Maryland and Federal
lead-based paint laws affecting rental and sale
transactions in Maryland. Let me repeat
this information:

There is a catch-22 that many Realtors, residential investment property owners, managers and leasing agents are not aware of. This twist results from application of both the Maryland HB 760 and Federal Title X to a rental unit that had been previously rented.

Maryland law requires that the current preoccupancy lead- aint inspection report be delivered to the tenant prior to occupancy, together with the EPA/HUD pamphlet and the Maryland lead disclosure notice. However, Federal Title X compliance requires delivery of ALL lead-related reports on the building and that dwelling unit. Consequently, if the dwelling has turned over eight times since 1996 when the law became effective, there are nine reports that should be delivered.

HUD/EPA has recently issued a memorandum regarding this, allowing the manager to deliver a summary of those reports, so long as the inspection company prepares the summary. All reports must be easily available to the tenant and, if requested, copies of the reports must be physically given to the tenant.

Concurrently with the brief article in the Alban Home Inspection Insights Newsletter being published, EPA issued a Notice of Non-Compliance to one of our clients, a very respected and responsible Real Estate firm with a property management division. As a result of a tenant complaint, EPA sent lead investigators into their office to review all leases, disclosure forms and related documents. The investigators found six lease files with incomplete disclosure information and proposed a maximum fine of $11,000 per violation.

Non-compliance was due to two record keeping deficiencies and I quote:

1. The lease agreement did not include, either as
an attachment or within the lease itself, a list
of any records or reports available to the lessor pertaining to lead-based paint and/or lead-based paint hazards in the property or an indication that no such reports or records exist.

2. The lease agreement did not include in the lease agreement the signatures of the lessor, agent, and the lessee certifying to the accuracy of their statements. All six tenant files contained full documentation that Maryland’s Lead Based Paint Poison Prevention Law, known as HB 760, was complied with. Pre-occupancy dust wipe inspections had been properly conducted and documented; and, the tenant had received the Maryland Tenant Notice form and the EPA/HUD pamphlet on lead- ased paint. Compliance with the Maryland law did not provide a pass on compliance with Title X, the federal law.

The good news in this case is that since the EPA Non-Compliance Notice was this company’s first violation, the fee was waived with the admonition that any future violation would result in sterner action.

Getting a nasty letter from someone whose title is Chief, Toxics Programs and Enforcement Branch, U.S. EPA-Region III/Waste and Chemicals Management Division is a discomforting experience. And such a letter can result in significant expense, not only from fines, but in legal expense to try to limit the damage. One case we are aware of started at a $60,000 fine that was negotiated down to $10,000 of lead inspection work and remediation of leaded areas. Another firm in the metropolitan area spent more on legal fees than the proposed fine to avoid further complications.

These are sobering stories. The message is that anyone, whether an owner, manager, Realtor or leasing agent, involved with rental properties built before 1978 need to understand the requirements of both Maryland and Federal law to ensure they and their firm are in full compliance with both laws. Realtors representing buyers or sellers of properties built on or before 1978 must comply with the Federal Title X requirements, including the requirement of full disclosure.

From the Desk of
Arthur Lazerow

Miracle of miracles, the State of Maryland has issued me a Home Inspector License! The State Commission of Real Estate Appraisers and Home Inspectors licensed us old folk first. By being certified by ASHI and having performed over 100 inspections, I qualified under the grandfathering clause for anyone submitting an application prior to July 1, 2002.

Effective January 1, 2008 in Maryland, no one except Maryland licensed home inspectors may legally perform a home inspection for compensation that will be valid for the homebuyer. By extension, sellers quite likely will take the position that if the non-licensed inspector’s report is not valid for the homebuyer, it is also not valid to establish any responsibility for the seller. That puppy has consequences for real estate transactions.

Most Maryland Realtors know the history of home inspector licensing. The law was passed in 2001 but not funded by the General Assembly, so the Attorney General took the position that with no money there would be no enforcement, which put licensing on hold.

Nearly 600 applications have been submitted. Of those 200 were rejected outright, 200 applicants received letters requesting additional information and about 140 applicants were approved for licensing. The Executive Director established this past April 1 as a goal date to complete review of the applications claiming grandfather status.

Given that anyone with a clipboard and flashlight can now call themselves a home inspector, the January 1, 2008 date is as important to responsible, professional home inspectors as it is to Realtors and their home buyer clients.

In the Legal Corner

All New-Construction Purchase
Agreements in Montgomery County
MD Must include the Right
to a Pre-Settlement Inspection by
A Home Inspector.

Section 40-15 of the Montgomery County Code gives any buyer of a new home the right to inspect prior to settlement, and the buyer may be accompanied by a buyer’s agent (read: home inspector) no less than 24 hours nor more than 72 hours before settlement. Although this Code section gives the seller a right also to be present, the seller must allow a reasonable time to conduct the inspection. These provisions must be in the written purchase contract.

The Montgomery County Consumer Affairs Office enforces this provision. Eric Friedman, who heads to enforcement division, is the consumer’s best friend and the recalcitrant offender’s worst nightmare. Realtors representing buyers of new homes should ensure that their buyers exercise this right. The Consumer Affairs office wants to hear of any instance of non-compliance.

Rodney Shull heads Alban’s new construction inspection division. With his background of 16 years as a new construction superintendent, he understands new construction from the inside. Call Alban for new construction staged inspections. 


Alban is proud to offer FREE Continuing Education Courses in Real Estate Offices!
Call Tina to schedule one of our educational seminars, for additional information, or to schedule our services at 800-822-7200 or 301-662-6565.


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