Lead Paint Liability Is On The Rise: Property Owners and Others Should Review Their Management Practices by Philip E. Karmel Bryan Cave LLP New York, New York Published in the New York Law Journal June 17, 2002 Note: This Article reprinted with permission from the June 17, 2002 edition of New York Law Journal. 2002 NLP IP Company. On April 5, 2002, the manager of an apartment building in Manchester, New Hampshire was sentenced to 15 months imprisonment arising from his failure to comply with federal regulations that required his real estate management firm to warn the mother of a young child about lead paint hazards in her apartment. 1 The prosecution came on the heels of the child s death from lead intoxication. New York City verdicts in individual lead paint poisoning cases have been reported as high as $3.4 million, 2 $6.6 million, 3 $11 million, 4 and $50 million, 5 and the New York Court of Appeals, on November 15, 2001, affirmed the tort doctrine that renders a landlord potentially liable for damages resulting from its failure to repair a dangerous lead paint condition of which it has notice. 6 On March 26, 2002, the Appellate Division reversed a lower court decision and upheld the Lead Poisoning and Prevention Control Law enacted by the New York City Council in 1999. 7 And it has also been held that a residential tenant is entitled to an abatement of rent if the landlord fails to correct a lead paint condition in the apartment that poses a threat to the tenant s children, since failure to correct the condition is a breach of the implied warranty of habitability imposed on residential leases by New York State statute. 8 In this legal climate, those who own, lease, manage or perform construction work on residential buildings built before lead paint was banned in 1978 would likely benefit from reviewing their lead paint management practices to ensure that they comply with potentially applicable regulatory requirements, a number of which are outlined in this article. Health Hazards of Lead Paint In 1991, the Secretary of Health and Human Services characterized exposure to harmful levels of lead as the number one environmental threat to the health of children in the United States. 9 In large doses,
2 lead exposure can cause convulsions and even death. Lead exposure at more moderate doses may also have serious and largely irreversible effects. According to the U.S. Environmental Protection Agency (EPA), blood-lead levels as low as 10 µg/dl (micrograms of lead per deciliter of blood) can retard the mental and physical development of children, reduce their attention span, cause learning disabilities, and damage the brain and nervous system. 10 New York City Department of Health data show that more than 10,000 children in the City have elevated blood-lead levels in excess of this standard. 11 Lead exposure to mothers before or during pregnancy may also damage the fetus or cause a miscarriage. 12 Now that most other sources of lead exposure, such as leaded gasoline, have been effectively regulated, lead paint is the top cause of harmful lead exposure in children. This is especially true in New York State, which boasts the highest number of older housing units in the nation, 13 most of which were painted with lead paint before the federal government banned its use in residential buildings in 1978. 14 Identifying Hazardous Conditions The mere presence of lead paint in a residential building is not itself a condition that is either hazardous in fact or deemed to be hazardous by regulation. Potential adverse health effects occur only if lead enters the body through ingestion or, less frequently, inhalation. Young children can swallow lead paint chips or swallow lead dust or lead contaminated soil from crumbling paint when they put fingers, toys or pacifiers in their mouths. This normal hand to mouth behavior in children under six makes them more likely to be exposed to lead paint that is flaking or otherwise in poor condition. According to EPA, even very tiny amounts of deteriorated lead-based paint are sufficient in certain circumstances to result in adverse health effects. 15 As explained below, separate regulations identifying lead-based paint hazards have been promulgated by EPA and the City and State of New York. The EPA regulations, which are promulgated under the Residential Lead-Based Paint Hazard Reduction Act of 1992, 16 establish discrete hazard standards for dust, paint and soil lead. 17 Dust is defined as hazardous if it contains a lead concentration of 40 µg/ft 2 on floors or 250 µg/ft 2 on interior window sills. 18 Paint is considered to be lead-based if its lead levels equal or exceed 1.0 mg/cm 2 or 0.5% by weight 19 and is deemed to pose a hazard if it is peeling, chipping, chalking or cracking or otherwise damaged or separated from the substrate ; or on a surface, such as wood, that is capable of being dented by the bite of a child and there is evidence of teeth marks; or on a friction surface subject to abrasion, such as windows, floors or doors, and hazardous dust is found on the nearest window sill or floor. 20 Soil is defined as hazardous if it is bare (uncovered) and contains lead concentrations of 400 µg/g or more in a play area (defined as an area of frequent soil contact by children of less than 6 years of age ) or, in the rest of the yard, has average lead concentrations of 1200 µg/g or more. 21 The EPA regulations apply to target housing, which is defined as all single family or multi-family housing constructed prior to 1978, excepting only housing for the elderly or disabled (unless a child under six years of age resides or is expected to reside in such housing) or zero bedroom dwellings, such as efficiencies,
3 studio apartments, dormitories, military barracks, and rentals of individual rooms in residential dwellings. 22 The regulations also apply to child-occupied facilities, such as day-care centers, preschools and kindergartens, that are located in a pre-1978 building and are regularly visited by the same child, under six years of age, at least twice a week for three or more hours per visit. 23 The lead concentration thresholds in New York City s definition of lead-based paint are similar to those in EPA s regulations, 24 but the City regulations state that, in addition, all paint in a dwelling unit in a multiple dwelling constructed prior to 1960 (the year lead-based paint was banned in residential buildings in the City) is presumed to be lead-based, unless the presumption is rebutted by testing. 25 The City regulations define a lead-based paint hazard as lead-based paint or paint presumed to be lead-based that is peeling in a dwelling unit occupied by a child under six years of age in a multiple dwelling building or on a deteriorated surface of such a unit. 26 These regulations do not designate lead contaminated dust or soil as hazardous. The New York State Public Health Law, which authorizes local health departments to issue lead paint abatement orders in residential buildings and in child care facilities for children under six years of age, 27 vaguely defines a condition conducive to lead poisoning as paint... containing lead in a condition accessible for ingestion or inhalation or where peeling or chipping of the paint... occurs or is likely to occur and other environmental conditions which may result in significant lead exposure. 28 Duty to Identify and Abate Lead Hazards The EPA regulations do not require a property owner (or anyone else) to evaluate their properties for the presence of lead-based paint hazards or take any action to control such hazards even if they are identified. 29 Thus, the preamble to the EPA regulations states that EPA s regulatory definition of lead hazards is but a strong recommend[ation] constituting the Federal government s best judgment concerning lead dangers in residential paint, dust and soil. 30 At the same time, in recognition of the hazards of improper lead abatement, the EPA regulations contain requirements for the inspection, risk assessment, and abatement at target housing and childoccupied facilities. 31 Such lead-based paint activities must be undertaken by certified personnel. 32 For abatements, the EPA regulations require pre-abatement notice to EPA 33 and a written occupant protection plan. 34 The regulations prohibit machine sanding or grinding or abrasive blasting or sandblasting of leadbased paint unless the machine is used in connection with a High Efficiency Particulate Air (HEPA) exhaust control, 35 generally prohibit dry scraping of lead-based paint, 36 and require any heat gun used on lead-based paint to operate below 1100 F. 37 The abatement of soil lead hazards, if undertaken, must remove the soil giving rise to the hazard or permanently cover such soil with a barrier of solid, relatively impermeable materials, such as pavement or concrete. 38 The regulations also contain clearance levels, which are values that indicate the maximum amount of lead permitted in dust on a surface following completion of an abatement activity. 39 The clearance levels
4 for lead in dust are 40 µg/ft 2 for floors, 250 µg/ft 2 for interior window sills and 400 µg/ft 2 for window troughs. 40 The EPA regulations contain two important qualifications to limit their scope. First, the term abatement is narrowly defined as any measure... designed to permanently eliminate lead-based paint hazards. 41 The term excludes renovation, remodeling, landscaping or other activities... not designed to permanently eliminate lead-based paint hazards or interim controls... designed to temporarily, but not permanently, reduce lead-based paint hazards. 42 Second, EPA s abatement standards do not apply to small paint hazard abatement projects those that involve less than 2 square feet of deteriorated paint per room, 20 square feet of exterior deteriorated paint, or 10% of the total surface area of deteriorated paint on window sills, baseboards and trim or other building components with a small surface area. 43 The New York City regulations, which, as noted above, contain their own definition of lead-based paint hazards, are much more demanding. They require the owner to correct all such hazards. 44 To do so, the owner must use interim controls that include wet scrap[ing of] all peeling paint using a scraper and water misting to reduce dust and the repair [of] all deteriorated subsurfaces... covered with [lead or presumed lead] paint and follow certain work practices to reduce the danger of lead contaminated dust and debris associated with such work. 45 Alternatively, at the owner s discretion, 46 an owner may correct a leadbased paint hazard by following the abatement standards set forth in the New York City Health Code. 47 (These standards must be followed if the owner is undertaking abatement as a result of an order issued by the City Health Department. 48 ) Unlike EPA s regulations, the City s regulations require that a property owner take affirmative action to seek to identify lead paint hazards. The owner of a multiple dwelling unit built prior to 1960 must communicate with its tenants, at the initiation of a lease and annually thereafter, to inquire as to whether a child under six years of age resides in the dwelling unit and must keep records pertaining to such communications. 49 In those cases in which the property owner is on notice that a young child does reside in the unit, the owner is required to perform an annual visual inspection for lead-based paint hazards. 50 If such hazards are present, they must be addressed through interim controls or abatement. Non-Abatement Renovations The EPA regulations do not regulate work practices associated with non-abatement renovations, such as the repainting of the interior of an apartment building and associated scraping of loose lead paint. The regulations do, however, impose notification and recordkeeping practices for target housing renovations. 51 (As discussed above, target housing includes most residences constructed prior to 1978.) The renovation contractor (or, the property owner itself, if the work is done by its maintenance staff) must provide written notice to the owner and occupant of a dwelling unit of the planned renovation work in his or her unit, and provide the owner and occupant with an EPA-approved pamphlet that discusses the hazards of lead contaminated dust and debris. 52 Renovations in common areas of the building require notification to
5 each dwelling unit. 53 De minimis and emergency renovation work, as defined in the regulations, are excepted from the notification requirements. 54 The City regulations prohibit dry scraping or dry sanding of lead-based paint or paint of unknown lead content in any dwelling unit. 55 Water misting or another approved method must be used to reduce dust levels. Proper Disposal of Lead Paint Waste In general, lead contaminated waste must be tested to determine whether it must be manifested and disposed of as hazardous waste under Subtitle C of the Resource Conservation and Recovery Act (RCRA). 56 EPA has suspended this requirement, however, for lead-based paint waste generated as a result of the abatement, renovation or remodeling of single family homes, apartment buildings and other residences (such waste is deemed to fit within the regulatory exemption for household waste ). 57 The New York State Department of Environmental Conservation, which administers the RCRA program in New York, has concurred with EPA s view. 58 Accordingly, in New York, lead contaminated waste from residential buildings must be disposed of as construction and demolition debris or regular household garbage, depending on the nature of the waste and local laws. Disclosure Upon Sale or Lease EPA regulations require a seller or lessor of target housing to disclose to the prospective purchaser or lessee the presence of any known lead-based paint or lead-based paint hazards, provide available records and reports and a lead hazard information pamphlet to the prospective purchaser or lessee, give a prospective purchaser a 10-day opportunity to conduct a risk assessment or inspection, and attach specific disclosure and warning language to the sales or leasing contract before the purchaser or lessee is obligated under a contract to purchase or lease target housing. 59 In New York State, the recently enacted Property Condition Disclosure Act became effective on March 1, 2002. 60 That law requires disclosure to the buyer of a one to four family residential property of a variety of potential environmental hazards. With respect to lead paint, the mandatory disclosure form states that the seller must disclose the age of the structure and then states note to buyer if the structure was built before 1978 you are encouraged to investigate for the presence of lead based paint. Housing Receiving Federal Assistance Pre-1978 buildings that receive federal housing assistance must comply with additional federal regulations promulgated by the U.S. Department of Housing and Urban Development ( HUD ). 61 Elements of these regulations apply to: (i) project-based assistance for residential properties by HUD or other federal agencies, (ii) HUD-owned single family housing sold with a HUD-insured mortgage, (iii) the disposition of residential properties owned by a federal agency other than HUD, (iv) multifamily residential properties, or
6 properties that are being converted to such use, that have received mortgage insurance administered under a HUD program, (v) HUD-owned multifamily properties, (vi) residential properties receiving rehabilitation assistance from HUD or receiving federal assistance under HUD programs for acquisition, leasing, support services, or operation, (vii) properties receiving tenant-based rental assistance for units to be occupied by children under 6-years of age, and (viii) public housing. Conclusion Those who own, manage or lease residential properties built before 1978, and their contractors, are potentially subject to numerous federal, state and local lead paint regulations. Entities subject to these regulations need to review them to identify all applicable requirements and put together and implement an effective lead paint management plan for their facilities. 1 U.S. Environmental Protection Agency Headquarters Press Release dated April 5, 2002. 2 Jackson v. Chetram, Index No. 45967/95 (Sup. Ct. Kings County, verdict date February 14, 2001) (reported New York Jury Verdict Review & Analysis, available on Lexis).) 3 Woolfalk v. NYCHA, Index No. 112405/93 (Sup. Ct. New York County) (as reported in NYLJ, April 21, 2000, p. 5). 4 Jones v. City of New York, Index No. 7630/92 (Sup. Ct. New York County, verdict date July 31, 1997) (reported New York Jury Verdict Review & Analysis, available on Lexis). 5 Perkins v. Cosmopolitan Care Corp., Index No. 18199/92 (Sup. Ct. Kings Co.) (as reported in NYLJ, Aug. 11, 2000, p. 5). 6 Chapman v. Silber, 97 N.Y.2d 9, 734 N.Y.S.2d 541 (2001). 7 New York City Coalition to End Lead Poisoning, Inc. v. Vallone, 2002 WL 458475 (App. Div. 1 st Dep t 2002) (upholding NYC Local Law 38 of 1999, codified at NYC Admin Code 17-179, 17-181, 27-2056.1 et seq.). 8 Chase v. Pistolese, N.Y.L.J., May 10, 2002, p. 23 (Watertown City Court) (citing Real Property Law 235-b[1]). 9 61 Fed. Reg. 9064, 9065 (March 6, 1996). 10 Id. 11 NYS Department of Health, Protecting Our Children from Lead: The Success of New York s Efforts to Prevent Childhood Lead Poisoning, Appendix H (2001). 12 Supra n.9. 13 Supra n.11 at 1. 14 16 C.F.R. Part 1303. 15 66 Fed. Reg. 1206, 1208 (Jan. 5, 2001). 16 Pub. L. 102-550, Title X, Oct. 28, 1992, 106 Stat. 3912, 15 U.S.C. 2681-92. 17 40 C.F.R. Part 745, Subpart D. 18 Id. 745.65(b). 19 15 U.S.C. 2681(9). 20 40 C.F.R. 745.65(a), 745.63 21 Id. 745.65(c), 745.63. 22 15 U.S.C. 2681(17); 40 C.F.R. 745.103, 745.61(b). 23 40 C.F.R. 745.223; 745.61(b). 24 NYC Admin. Code 27-2056.1(3). 25 Id. 27-2056.4. 26 Id. 27-2056.1(2). 27 New York Public Health Law 1373. 28 Id. 1370[3]. 29 40 C.F.R. 745.61(c). 30 66 Fed. Reg. 1206, 1210 (Jan. 5, 2001). 31 40 C.F.R. 745.223 (defining lead-based paint activities ). 32 Id. 745.227. 33 Id. 745.227(e)(4).
34 Id. 745.227(e)(5). 35 Id. 745.227(e)(6)(ii). 36 Id. 745.227(e)(6)(iii). 37 Id. 745.227(e)(6)(iv). Open-flame burning or torching of lead-based paint is prohibited. Id. 745.227(e)(6)(i). 38 Id. 745.227(e)(7) & 745.223 (defining permanently covered ). 39 Id. 745.223. 40 Id. 745.227(e)(8)(viii). 41 Id. 745.223. 42 Id. 43 Id. 745.65(d). 44 NYC Admin. Code 27-2056.2(a). 45 Id. 46 Id. 27-2056.2(b). 47 NYC Health Code 173.14. 48 Id. 173.14(a)(1), 173.13(d)(1). 49 NYC Admin Code. 27-2056.3(a), (b) & (c). 50 Id. 27-2056.3(d). 51 40 C.F.R. Part 745, Subpart E. 52 Id. 745.85(a). 53 Id. 745.85(b). 54 Id. 745.82(b). 55 NYC Admin. Code 17-181. 56 42 U.S.C. 6921-29; 40 C.F.R. 261.24. 57 EPA Policy Memorandum signed by Elizabeth A. Cotsworth, Director of the EPA Office of Solid Waste, Regulatory Status of Waste Generated by Contractors and Residents from Lead-Based Paint Activities Conducted in Households, July 31, 2000. 58 Letter from William A. Yeman, P.E., DEC Bureau of Hazardous Waste Management, June 1, 2001. 59 40 C.F.R. Part 745, Subpart F. 60 New York Real Property Law, Art. 14. 61 24 C.F.R. Part 35. 7