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| **Special Attention of:**   | **Notice**: **H 2003 -** 19            |
|                             |                                        |
| # All Hom                   | **Issued: September 2, 2003**          |
| eownership Center Directors |                                        |
|                             | **Expires: September 30, 2004**        |
| **All REO Directors**       |                                        |
|                             | **\-\-\-\-\                            |
| **All Management and        | -\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\ |
| Marketing Contractors**     | -\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--** |
|                             |                                        |
|                             | **Cross References:**                  |
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***Subject: Lead Disclosure Requirements and Addendum Format***

In order to ensure that HUD's Management and Marketing (M&M)
contractors, and the brokers working with HUD in the sale of its single
family properties constructed prior to 1978 are in full compliance with
the requirements of the Lead Disclosure Rule (24 CFR 35, subpart A), the
following guidance is provided relative to the disclosure of known
lead-based paint and lead-based paint hazards.

This guidance addresses lead-based paint disclosure only. Procedures for
compliance with the requirements of the Lead Safe Housing Rule will be
included in the scope of work for the new M&M contracts that will be
procured this year.

These requirements shall become effective 30 days from the date of this
Notice. Sales contracts shall not be executed for properties constructed
prior to 1978 for which disclosure has not been provided as described
below. In order to address the range of marketing situations in a simple
manner in this Notice, the term "broker" refers, as applicable, to a
selling broker, a buyer's broker, or a purchaser who is not represented
by a broker.

**Lead Disclosure Rule Compliance Procedure for HUD-Owned Single Family
Properties**

1.  **[Age Verification.]{.underline}** Within five (5) business days
    from the effective date of this Notice, M&M contractors shall
    verify, based on appraisal information or as determined by the
    initial inspection, the year of construction of each HUD‑owned
    property in their inventory and ensure that this information is
    properly recorded in the Single Family Acquired Asset Management
    System (SAMS). Upon acquisition of any new property, M&M contractors
    will, within five (5) business days of acquisition, review the
    appraisal and initial inspection information to identify the year of
    construction of each property and record this information in SAMS.

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a.  If the year of construction is 1978 or later, no further action is
    required regarding lead-based paint.

b.  If the year of construction is prior to 1978, the M&M contractor
    shall comply with the following provisions of this memorandum.

**2. [Replace Existing Lead Disclosures.]{.underline}** For properties
that are listed in the inventory on the issuance date of this Notice,
M&M contractors shall remove all existing lead-based paint disclosures
from the property listing website and replace each with a properly
completed "Lead-Based Paint Disclosure Addendum" (Addendum) executed by
the M&M contractor on behalf of HUD, the seller, using the attached
format. This action is covered under the Information Collection Request
approved by the Office of Management and Budget for

the Environmental Protection Agency-HUD jointly published Lead
Disclosure Rule.

**3. [Listing Process.]{.underline}** Prior to listing any current or
future HUD property constructed prior to 1978, the M&M contractor shall:

a.  Complete parts (a) and (b) of the Addendum for each property based
    on all available information and documents related to known
    lead-based paint and lead-based paint hazards at the property. Sign
    and post the Addendum on the property listing website at the time
    the property is listed. The electronic version of the signed
    Addendum, and any supplements, shall accurately reflect the
    information in the paper version of the ink-signed Addendum, and any
    supplements. The electronic version of the Addendum, and any
    supplements, shall be capable of being printed, saved, or otherwise
    reproduced in the future by the broker.

b.  Post any available lead information related to the subject property
    on the website in one or more portable document format (PDF) files.
    This information shall include all available lead-based paint
    inspection reports, risk assessment reports, and/or other records
    pertaining to known lead-based paint and/or lead-based paint hazards
    for the subject property.

> c\. Post records and/or reports obtained subsequent to listing on the
> website within two (2) business days of receipt. Such records or
> reports could include lead-based paint inspections, lead hazard
> control contracts or work orders, lead clearance examinations, or
> similar documents associated with the evaluation and control of
> lead-based paint and/or lead-based paint hazards on the property.

4\. **[Before Bid Submission.]{.underline}** Through broker training and
instructions published on its website, the M&M contractor shall be
required to:

a.  Provide the consumer electronic disclosures to the broker, pursuant
    to 15 U.S.C. 7001(c). Obtain the consumer electronic consents (or
    electronic confirmation of consent) from the broker, pursuant to 15
    U.S.C. 7001(c). Direct brokers to download the Addendum and all
    available lead records and reports from the property website listing
    and deliver paper (or hard) copies of them to the potential
    purchaser prior to submission of a bid.

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b.  Direct brokers to provide potential purchasers with a copy of the
    Environmental Protection Agency (EPA)-approved pamphlet "Protect
    Your Family from Lead in Your Home." The pamphlet can be downloaded
    from HUD's website in English or Spanish, at
    [**www.hud.gov/offices/lead/disclosurerule/index.cfm#forms**](http://www.hud.gov/offices/lead/disclosurerule/index.cfm#forms).
    A black and white camera-ready copy of the pamphlet ready for
    printing can be obtained from the National Lead Information
    Clearinghouse, by telephoning 1-800-424-LEAD (toll-free), or at
    **[www.epa.gov/lead/nlicdocs.htm](http://www.epa.gov/lead/nlicdocs.htm).**

c.  Notify brokers that they can obtain additional information on the
    Lead Disclosure Rule from the National Lead Information
    Clearinghouse (sponsored by HUD, EPA and the Centers for Disease
    Control and Prevention) by telephone at 1-800-424-LEAD, or at
    [**www.epa.gov/lead/nlic.htm**](http://www.epa.gov/lead/nlic.htm).
    Questions can be submitted by e-mail, and documents can be ordered
    at this website. Other information on the Lead Disclosure Rule is
    available from HUD's Office of Healthy Homes and Lead Hazard Control
    website at
    [**www.hud.gov/offices/lead**](http://www.hud.gov/offices/lead).

d.  Instruct brokers not to obtain the purchaser's signature on the
    Addendum until after the receipt of the bid acceptance confirmation.

5\. **[Following Bid Acceptance.]{.underline}** Prior to execution of
the form HUD-9548, Sales Contract, for any HUD property constructed
prior to 1978, the M&M contractor shall ensure that the purchaser and
broker have properly executed the new Addendum.

a.  If any available records or reports are not linked to the web
    listing, or if the broker notifies the M&M contractor that it is
    unable to provide the consumer electronic consent or is unable to
    access the electronic versions of any records or reports, the M&M
    contractor must provide paper copies of those documents to the
    broker by next-day delivery.

b.  After the receipt of the bid acceptance confirmation, the broker,
    after verifying with the M&M contractor that it has provided the
    purchaser with all available records and/or reports related to known
    lead-based paint or lead-based paint hazards, must ensure that (1)
    the purchaser signs and dates the Addendum, and (2) the Addendum is
    submitted to HUD with the sales contract. The date of the
    purchaser's signature on the Addendum shall be the beginning date
    for the contingency period discussed in paragraph 6, below. The
    purchaser shall not be required to sign the Addendum and return the
    sales contact until the purchaser has received all available records
    and/or reports related to known lead-based paint or lead-based paint
    hazards to the M&M contractor. In the event new lead reports and/or
    information on the subject property become available after the
    purchaser executes the Addendum, the M&M contractor shall provide
    these to the purchaser through the broker as well as a supplemental
    Addendum to be signed by the purchaser. If the sale has not closed
    when the M&M contractor provides the supplemental Addendum, the
    Purchaser shall have until the later of the original contingency
    period, above, or two (2) business days after the date of the
    Purchaser's signature on the supplemental Addendum to exercise the
    right to withdraw from the contract.

c.  In the case of a sale where the purchaser is not represented by a
    broker, the M&M contractor shall complete the Addendum, entering
    \"N/A\" on the lines for selling broker's signature, sign on behalf
    of the seller and deliver the Addendum and full copies of all
    available lead related records and reports and a copy of the
    EPA-approved pamphlet "Protect Your Family from Lead in Your Home"
    to the purchaser within five (5) calendar days following bid
    acceptance.

6\. **[Contingency Period.]{.underline}** As a condition of sale for any
HUD-owned property constructed prior to 1978, the purchaser shall have a
lead contingency period of fifteen (15) calendar days from the date of
its signature on the Addendum to review all documentation related to
lead-based paint and/or lead-based paint hazards and to obtain, at its
own expense, independent reports or assessments related to lead-based
paint or lead-based paint hazards.

a.  The lead contingency period ends fifteen (15) calendar days from the
    date of the purchaser's signature on the Addendum.

b.  If the purchaser is dissatisfied for any reason and notifies the M&M
    contractor by letter postmarked no later than the fifteenth (15^th^)
    calendar day following the date of the purchaser's signature on the
    Addendum, the purchaser may withdraw from the contract. Earnest
    money will not be refunded, except as provided in paragraph 6.c. of
    this memorandum.

c.  The withdrawing purchaser will be entitled to a refund of earnest
    money if the purchaser obtains an independent lead-based paint
    inspection or risk assessment performed by a certified Lead-Based
    Paint Inspector or certified Risk Assessor, as applicable, and
    provides the M&M contractor with a copy of the inspection or risk
    assessment report. The report must be postmarked by the fifteenth
    (15^th^) calendar day following the date of the purchaser's
    signature on the Addendum.

d.  If the purchaser requires additional time to receive the results of
    a lead-based paint inspection or risk assessment report, the broker
    must request in writing an extension from the M&M contractor. The
    M&M contractor must use its discretion in approving extension
    requests but is encouraged to provide purchasers with reasonable
    time to complete lead-based paint evaluations.

e.  Neither the M&M contractor nor the broker may discourage the
    purchaser from obtaining a lead-based paint inspection and/or a risk
    assessment during the contingency period.

f.  Within 30 calendar days after the purchase closes or the purchaser
    withdraws, the M&M contractor must attest that it has complied with
    the Lead Disclosure Rule and the provisions of this Notice in regard
    to the purchase or unsuccessful purchase, in a signed statement
    inserted into the property file.

If you have any questions regarding the implementation of these
requirements, please contact Wanda Sampedro, Director, Single Family
Asset Management & Disposition Division, Department of Housing and Urban
Development, at (202) 708-1672.

Attachment

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John C. Weicher

Assistant Secretary for Housing-

Federal Housing Commissioner, H