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  • Writer's pictureCCK

Good News: More Rights for Buyers to Inspect for Lead in Georgia. Bad News: Bigger Fines.

Reminder of Requirements and Update on Penalties

The federal Environment Protection Agency (EPA) requires the seller to disclose and provide any available information to buyers about lead-based paint hazards on properties that were constructed prior to 1978. That was the year that lead-based paints were banned for residential use.

Residential properties constructed well after 1978 may still require a lead-based paint disclosure. If "reclaimed" wood or other painted items are brought into the home for architectural effect, this may introduce lead into the home construction. For this reason, the Georgia Association of REALTORS® (GAR®) once recommended that agents use the lead hazard disclosure for all properties regardless of age. GAR®'s position has changed recently since there is a financial penalty to completing the forms incorrectly so they should only be used if the property requires it. The penalty was increased in 2022 to $19,507. Still - when in doubt, always disclose.

The buyer must receive the EPA pamphlet Protect Your Family from Lead in Your Home (available in English and Spanish) and the Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards. In the disclosure, the buyer acknowledges they received or are waiving their right to inspect for lead hazards for 10 days.

The 2023 Change in Georgia

Many buyers were regularly waiving their right to inspect. The reason is largely based upon the way the right is given in the federal form. Although the right can be waived, if the buyer and seller agree that the buyer has the right to inspect for lead hazards, the buyer must be given the opportunity to inspect before the buyer is obligated to purchase the property. No seller I have ever met would allow the buyer to inspect their property for 10 days before entering into a contract.

The GAR® Purchase and Sale Agreement now gives the buyer their 10 day right to inspect and the right to terminate if they find lead hazards. This right is independent of any due diligence or inspection period they have negotiated. The only caveat is that the buyer did not waive the right in the lead-based paint disclosure. Now buyers are not obligated to purchase if they do not waive their right and they find lead hazard.

The Practical Effect of the Change?

Time will tell. The single biggest determining factor in what due diligence any buyer does is their agent. The vast majority of buyers get home inspections. Why? Because they want to make sure the home is in good shape? NO. They get home inspections because their agents regularly suggest them and operate under the assumption that it will happen. It is built into the process and timeline. Why do some agents' clients regularly get surveys? They do it because that agent discusses how important they are and provides company names. Why do some agents' clients almost always inspect for radon? Same reason.

In preparation for the change, I polled a number of agent groups and asked if they had ever been in a transaction that involved a lead hazard inspection. Less than 5% had and more than half of those were purchases in which the agent was the buyer and considered it an important due diligence step. Agents should do for their clients what they would do for themselves. Consider that the Real Estate Golden Rule.

What is the Cost of Inspection and Remediation?

It varies by locality and the specifics of the home. The good news is that the EPA website has a search function so find companies within a certain distance of any property. All of these companies are certified by the EPA.

Do you think more people will or should get properties inspected for lead hazards?

Given the potential health effects of lead exposure, I would love to say yes. What do you think? Looking forward to your thoughts and comments.

Want to hear my discussion of the Lead based issues?

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