Buying a house with lead paint can still be a sound investment despite the risks. Here are 10 things you need to know about this real estate move.
As a real estate investor, you know that profit is often found in older homes. They often have the charm and character that residents look for. They also usually sell for a lower price depending on their age and condition. The catch here is, you will have to pay for renovations on the property. This is especially the case when you end up buying a house with lead based paint. The average homebuyer is not willing to put in this much work. Thus, it is up to you to do it at a profit.
In this article, you will find 10 things that will help you answer, “Should I buy a house with lead paint?” Homeowners who are thinking of selling a house with lead paint would also find this useful.
#1: The Federal Government Banned Lead-Based Paint in 1978
In the first half of the 20th century, buying a house with lead paint is not unusual. This is because lead helps speed up paint-drying times, resist moisture, and maintain a fresh look. But scientists later discovered that lead was a toxic metal that caused many health problems. It can affect almost every organ in the body when you eat or inhale it. They also found that lead was most dangerous to children aged six years and younger.
So in 1978, the federal government banned the manufacture, sale, and use of lead-based paint. By this time, many builders have already used this for their construction projects. But the law did not demand homeowners to get rid of the current lead content in their properties. Because of this, constructions that started before the ban are still likely to contain this toxic material. The older the property, the more likely you are at buying a home with lead paint.
Having lead-based paint in the house is the only disclosure that federal law mandates when the property is for sale. The health issues it could cause is why it is important to know whether the home you are buying or selling has this.
#2: Houses Built Before 1978 Have a High Chance of Containing Lead-Based Paint
Unless someone else has already repainted, renovated, or restored a house built before 1978, you might end up buying a house with lead paint. So when looking into an old property, it is best to ask if the seller knows that there is lead paint in their property. While they need to notify you about this, they do not always check for lead paint and are thus not required to do so before selling the house. They must only tell you if they already knew about its presence beforehand.
Real estate investors who want to repair old houses should at least try to understand the law surrounding the lead-based paint issue. You can also cut your risk of finding a house with lead paint by using a website like Mashvisor to filter your search to houses built after 1978. Our investment property calculator will help you decide if a certain home may still be worth buying for your intended purposes.
#3: Sellers Must Tell Potential Buyers That Their Property Contains Lead-Based Paint
In 1992, legislators passed the Lead Law, which requires sellers to inform you about any lead content in their property. They also outlined how concerned parties should deal with houses that contain lead-based paint. But sellers can only disclose this if they already knew about the issue in their home. They are also not required to do a test before putting their house up for sale.
Aside from federal law, several states and cities have enacted their own regulations surrounding this issue. In DC, for example, the local government has the authority to enter residences where children live and conduct a risk assessment. If they find any lead-based paint present, they will order the homeowner to get rid of it.
You can find regulations on lead paint specific to your city or state on the National Center for Healthy Housing’s website.
#4: Neither Buyer nor Seller Needs to Test for Lead-Based Paint
Despite the extensiveness of the 1978 federal ban and the 1992 Lead Law, they did not demand buyers or sellers to test a house for lead paint. But if you want to attract buyers or tenants with children under six years old, you need to get your house tested. And if the inspector finds this toxic material, you need to take the necessary steps to have it removed.
When buying a house with lead paint, the seller’s real estate agent will give you a pamphlet called Protect Your Family From Lead In The Home. It discusses what lead-based paint is and the danger it brings. It also tells you how to handle any potential hazards and what you need to do if you think that there is lead paint on the property.
But who pays for lead-based paint inspection? It is usually the buyer who handles the cost. If the inspection finds lead content, though, you as the buyer can negotiate for a lower price or have the seller handle the removal.
#5: A Licensed Risk Assessor Can Help You Check for Lead-Based Paint
When buying a house with lead paint, you need to have it checked by a licensed professional. Even though there are EPA-approved home test kits that you can use, they have their own limitations that may not get you accurate results. Meanwhile, a licensed risk assessor uses x-ray technology to detect lead deep into several layers of paint.
If they end up finding lead content, you could hire a licensed professional to remove it, but the cost could range from $8 to $17 per square foot, according to HomeAdvisor. It is worth the expense though, as going the DIY route could expose you to lead dust. Even small amounts of this can lead to short- and long-term health problems.
#6: Buyers Have 10 Days to Test for Lead-Based Paint
Even if sellers are not required to have their home tested for lead-based paint, they still need to give the buyer a ten-day period to do their own test. This is a standard in home sale agreements. They could negotiate for a shorter period if they are in a rush with the sale.
When buying a house with lead paint, make sure to take advantage of this clause. If you do not want to spend on a professional to do the inspection (though it is better if you do), you could do it yourself by following these steps:
- Check the walls, baseboards, window sills, and other paint-covered surfaces for signs of chipped or cracking paint.
- Buy a testing kit, which you can get from most hardware stores. It contains a solution that you apply to the surface you wish to check.
- If the tester turns pink, it means that the surface you checked contains lead.
Note that the home tester kit only works on the topmost paint layer, so you might still need to hire a professional to get all bases covered. And if you find lead content, you could negotiate for either a lower price or for the seller to shoulder the lead-paint removal cost.
#7: Sellers Have to Give Buyers a Property Transfer Lead Paint Notification
When buying a house with lead paint, expect to receive a Property Transfer Lead Paint Notification. Federal law requires sellers to draft this and hand it over for all parties to sign. You should get this before signing the sale agreement.
This document explains the main points that all parties–you, the seller, your agents, etc–need to be aware of about the Lead Law. The seller must also give you a copy of any of these documents:
- Lead inspection reports
- Risk assessment reports
- Letters of Compliance
- Letters of Interim Control
They also have to tell you that if a child will live in the property, then you must have the home either deleaded or brought into Interim Control. And you must get this done within 90 days of receiving the property title. If you or the seller does not follow these mandates, you might be subjected to civil penalty or even criminal sanctions.
#8: Sellers Must Give Buyers a Copy of Protect Your Family From Lead in the Home
Aside from the notification, the seller must also give you a pamphlet explaining what the presence of lead in the home means and who is at risk. When buying a house with lead paint, you can also refer to this pamphlet to learn what you can do to cut the potential harm that the lead paint could cause. Usually, the seller’s agent hands this out to potential buyers who visit the property.
This document is available on the Environmental Protection Agency’s (EPA) website. The agency updates this on a regular basis and makes it available in several languages.
#9: Sellers Who Do Not Comply With the Lead Law Are Subject to Civil Penalty or Even Criminal Sanctions
Home sellers and their real estate agents who do not follow the requirements set by the Lead Law and their state’s regulations can face a civil penalty depending on their state’s law. They might also face criminal sanctions under federal law and become liable for any damages incurred.
Whether you are buying a house with lead paint or selling one, make sure that you hire an agent who is experienced in dealing with this type of property. Even if you have not seen them on the news, there have been many lawsuits related to this issue in which the damages amounted to hundreds of thousands of dollars.
#10: Homeowners Can Still Sell Their House With Lead Paint to Homebuyers and Investors
If you find yourself asking, “Can I sell a house with lead paint?” The answer is yes. Despite the risks surrounding lead paint, especially to children, you will still be able to find your property a new owner. Here are some reasons why:
- There are many homebuyers who specifically look for an older home because of its charm and character. Because of their familiarity with these properties, they also expect to find lead based paint in them.
- You may attract homebuyers who do not have children or do not plan on having children. Lead poses a significant risk mostly to children aged 6 and under. Because of this, empty nesters, parents with older children, and other households who do not have children are likely to not mind buying a house that contains lead.
- Lead-based paint is removable. Just because your property contains lead paint does not mean you are stuck with it for the rest of your life. You or whoever buys your house has the option to get the paint professionally removed.
Buying a House With Lead-Based Paint Can Be a Good Investment
If you want to acquire an older home as your next investment property, you are likely to end up buying a house with lead paint. And that is okay. This toxic material can still be found in many older homes that have not been renovated after 1978, but you can hire a professional to check for it and remove it.
By federal and state laws, the homeowner selling the property needs to inform you if their house contains this paint. But only if they know about it. So make sure to get the home inspected by a professional before closing the deal; you might be able to negotiate a lower price should you find lead content in the property.
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