ATTACHMENT 2

Disclosure of Known Lead - Based Paint and/or Lead - Based Paint Hazards Upon Sale or Lease of Residential Property 40 CFR 745, Subpart FTI TL E 40 -- PROTECTION OF ENVIRONMENT

CHAPTER I -- ENVIRONMENTAL PROTECTION AGENCY (CONTINUED) P ART 745 -- LE AD - BASED PAINT POISONING PREVENTION IN CERTAIN

RESI DENT IA L STRUCTURES Subpart F -- Disclosure of Known Lead - Based Paint and/or Lead - Based Paint Hazards Upon Sale or Lease of Residential Propert y Sec. 745.100 Purpose. This subpart impleme nts the provisions of 42 U.S.C. 4852d, which impose certain requirements on the sale or lease of target housing. Under this subpart, a seller or lessor of target housing shall disclose to the purchaser or lessee the presence of any known lead - based paint a nd/or lead - based paint hazards; provide available records and reports; provide the purchaser or lessee with a lead hazard information pamphlet; give purchasers 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. Sec. 745.101 Scope and applicability . This subpart applies to all transactions to sell or lease target housing, including subleases, with the exception of the following: (a) Sales of target housing at foreclosure. (b) Leases of target housing that have been found to be lead - based paint free by an inspector certified under the Federal certific ation program or under a federall y accredited State or tribal certification program. Until a Federal certification program or federally accredited State certification program is in place within the State, inspectors shall be considered qualified to conduct an inspection for this purpose if they have received certification under any existing State or tribal inspector certification program. The lessor has the option of using the results of additional test(s) by

a certified inspector to confirm or refute a pri or finding. (c) Short - term leases of 100 day s or less, where no lease renewal or extension can occur. (d) Renewals of existing leases in target housing in which the lessor has previously disclosed all information required under Sec. 745.107 and whe re no new information described in Sec. 745.107 has come into the possession of the lessor. For the purposes of this paragraph, renewal shall include both renegotiation of existing lease terms and/or ratification of a new lease. Sec. 745.102 Effective d ates. The requirements in this subpart take effect in the following manner: (a) For owners of more than four residential dwellings, the requirements shall take effect on September 6, 1996. (b) For owners of one to four residential dwellings, the requirements shall take effect on December 6, 1996.Sec. 745.103 Definitions.

The following definitions apply to this subpart. The Act means the Residential L ead - Based Paint Hazard Reduction Act of 1992, 42 U.S.C. 4852d. Agent means an y party

who enters into a contract with a seller or lessor, including any part y who enters into a contract with a representative of the seller or lessor, for the purpose of selling or leasing target housing. This term does not apply to purchasers or an y purc haser's representative who receives all compensation from the purchaser. Available means in the possession of or reasonably obtainable b y the seller or lessor at the time of the disclosure. Common area means a portion of a building generall y access ible to all residents/users including, but not limited to, hallway s, stairway s, laundry and recreational rooms, play grounds, community

centers, and boundary

fences. Contract for the purchase and sale of residential real property means any contract or a greement in which one part y agrees to purchase an interest in real propert y on which there is situated one or more residential dwellings used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of one or more pers ons. EPA means the Environmental Protection Agency . Evaluation means a risk assessment and/or inspection. Foreclosure means an y of the various methods, statutory or otherwise, known in different jurisdictions, of enforcing pay ment of a debt, by the taking and selling of real property . Housing for the elderly means retirement communities or similar ty pes of housing reserved for households composed of one or more persons 62 years of age or more at the time of initial occupancy . HUD means t he U.S. Department of Housing and Urban Development. In spection means: (1) A surface - by - surface investigation to determine the presence of lead - based paint as provided in section 302(c) of the Lead - Based Paint Poisoning and Prevention Act [42 U.S.C . 4822], and (2) The provision of a report explaining the results of the investigation. Le ad - based paint means paint or other surface coatings that contain lead equal to or in excess of 1.0 milligram per square centimeter or 0.5 percent by weight. Le ad - based paint free housing means target housing that has been found to be free of paint or other surface coatings that contain lead equal to or in excess of 1.0 milligram per square centimeter or 0.5 percent by weight. Le ad - based paint hazard m eans an y condition that causes exposure to lead from lead - contaminated dust, lead - contaminated soil, or lead - contaminated paint that is deteriorated or present in accessible surfaces, friction surfaces, or impact surfaces that would result in adverse human health effects as established by the appropriate Federal agency . Lessee means an y entity

that enters into an agreement to lease, rent, or sublease target housing, including but not limited to individuals, partnerships, corporations, trusts, government agencies, housing agencies, Indian tribes, and nonprofit organizations. Lessor means an y entity that offers target housing for lease, rent, or sublease, including but not limited to individuals, partnerships, corporations, trusts, government agencies , housing agencies, Indian tribes, and nonprofit organizations.Owner means an y entity that has legal title to target housing, including but not limited to individuals, partnerships, corporations, trusts, government agencies, housing agencies, Indian t ribes, and nonprofit organizations, except where a mortgagee holds legal title to propert y serving as collateral for a mortgage loan, in which case the owner would be the mortgagor. Purchaser means an entity that enters into an agreement to purchase an interest in target housing, including but not limited to individuals, partnerships, corporations, trusts, government agencies, housing agencies, Indian tribes, and nonprofit organizations. Reduction means measures designed to reduce or eliminate human exposure to lead - based paint hazards through methods including interim controls and abatement. Residential dwelling means: (1) A single - family

dwelling, including attached structures such as porches and stoops; or (2) A single - family

dwelling unit in a structure that contains more than one separate residential dwelling unit, and in which each such unit is used or occupied, or intended to be used or occupied, in whole or in part, as the residence of one or more persons. Risk assessment means an on - site investigation to determine and report the existence, nature, severit y, and location of lead - based paint hazards in residential dwellings, including: (1) Information gathering regarding the age and history of the housing and occupancy by chi ldren under age 6; (2) Visual inspection; (3) L imited wipe sampling or other environmental sampling techniques; (4) Other activity

as may be appropriate; and (5) Provision of a report explaining the results of the investigation. Secreta ry means the Secretary

of Housing and Urban Development. Seller means an y entity

that transfers legal title to target housing, in whole or in part, in return for consideration, including but not limited to individuals, partnerships, corporations, trust s, government agencies, housing agencies, Indian tribes, and nonprofit organizations. The term ``seller'' also includes: (1) An entit y that transfers shares in a cooperatively owned project, in return for consideration; and (2) An entit y that trans fers its interest in a leasehold, in jurisdictions or circumstances where it is legall y permissible to separate the fee title from the title to the improvement, in return for consideration. Target housing means any housing constructed prior to 1978, e xcept housing for the elderl y or persons with disabilities (unless an y child who is less than 6 years of age resides or is expected to reside in such housing) or an y 0 - bedroom dwelling. TSCA means the Toxic Substances Control Act, 15 U.S.C. 2601. 0 - bedroom dwelling means an y residential dwelling in which the living area is not separated from the sleeping area. The term includes efficiencies, studio apartments, dormitory housing, military barracks, and rentals of individual rooms in residential dwel lings. Sec. 745.107 Disclosure requirements for sellers and lessors. (a) The following activities shall be completed before the purchaser or lessee is obligated under an y contract to purchase or lease target housing that is not otherwise an exempt transaction pursuant to Sec. 745.101. Nothing in this section implies a positive obligation on the seller or lessor to conduct an y evaluation or reduction activities. (1) The seller or lessor shall provide the purchaser or lessee with an EPA - approved l eadhazard information pamphlet. Such pamphlets include the EPA document entitled Protect Your

Family From Lead in Your Home (EPA 747 - K - 94 - 001) or an equivalent pamphlet that has been approved for use in that State by EPA. (2) The seller or lessor shal l disclose to the purchaser or lessee the presence of an y known lead - based paint and/or lead - based paint hazards in the target housing being sold or leased. The seller or lessor shall also disclose an y additional information available concerning the known lead - based paint and/or lead - based paint hazards, such as the basis for the determination that lead - based paint and/or lead - based paint hazards exist, the location of the lead - based paint and/or lead - based paint hazards, and the condition of the painted su rfaces. (3) The seller or lessor shall disclose to each agent the presence of an y known lead - based paint and/or lead - based paint hazards in the target housing being sold or leased and the existence of any available records or reports pertaining to lead - based paint and/or lead - based paint hazards. The seller or lessor shall also disclose an y additional information available concerning the known lead - based paint and/or lead - based paint hazards, such as the basis for the determination that lead based pain t and/or lead - based paint hazards exist, the location of the lead - based paint and/or lead - based paint hazards, and the condition of the painted surfaces. (4) The seller or lessor shall provide the purchaser or lessee with an y records or reports availab le to the seller or lessor pertaining to lead - based paint and/or lead - based paint hazards in the target housing being sold or leased. This requirement includes records or reports regarding common areas. This requirement also includes records or reports reg arding other residential dwellings in multifamily

target housing, provided that such information is part of an evaluation or reduction of lead - based paint and/or lead - based paint hazards in the target housing as a whole. (b) If an y of the disclosure a ctivities identified in paragraph (a) of this section occurs after the purchaser or lessee has provided an offer to purchase or lease the housing, the seller or lessor shall complete the required disclosure activities prior to accepting the purchaser's or lessee's offer and allow the purchaser or lessee an opportunity to review the information and possibly amend the offer. Sec. 745.110 Opportunity to conduct an evaluation. (a) Before a purchaser is obligated under an y contract to purchase target ho using, the seller shall permit the purchaser a 10 - day period (unless the parties mutually agree, in writing, upon a different period of time) to conduct a risk assessment or inspection for the presence of lead - based paint and/or lead - based paint hazards. (b) Not withstanding paragraph (a) of this section, a purchaser may waive the opportunity

to conduct the risk assessment or inspection b y so indicating in writing. Sec. 745.113 Certification and acknowledgment of disclosure. (a) Seller requiremen ts. Each contract to sell target housing shall include an attachment containing the following elements, in the language of the contract (e.g., English, Spanish): (1) A Lead Warning Statement consisting of the following language: Every purchaser of any

interest in residential real propert y on which a residential dwelling was built prior to 1978 is notified that such propert y may present exposure to lead from lead - based paint that may

place y oung children at risk of developing lead poisoning. Lead poi soning inyo ung children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory . Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real propert y is required to provide the buy er with any information on lead - based paint hazards from risk assessments or inspections in the seller's possession and notify the buy er of an y known lead - based paint hazards. A risk asse ssment or inspection for possible lead - based paint hazards is recommended prior to purchase. (2) A statement b y the seller disclosing the presence of known lead - based paint and/or lead - based paint hazards in the target housing being sold or indicating no knowledge of the presence of lead - based paint and/or lead - based paint hazards. The seller shall also provide any additional information available concerning the known lead - based paint and/or lead - based paint hazards, such as the basis for the determin ation that lead - based paint and/or lead - based paint hazards exist, the location of the lead - based paint and/or lead - based paint hazards, and the condition of the painted surfaces. (3) A list of an y records or reports available to the seller pertaining to lead - based paint and/or lead - based paint hazards in the housing that have been provided to the purchaser. If no such records or reports are available, the seller shall so indicate. (4) A statement b y the purchaser affirming receipt of the informati on set out in paragraphs (a)(2) and (a)(3) of this section and the lead hazard information pamphlet required under 15 U.S.C. 2696. (5) A statement b y the purchaser that he/she has either: (i) Received the opportunity to conduct the risk assessment or inspection required b y Sec. 745.110(a); or (ii) Waived the opportunity . (6) When one or more agents are involved in the transaction to sell target housing on behalf of the seller, a statement that: (i) The agent has informed the seller of th e seller's obligations under 42 U.S.C. 4852d; and (ii) The agent is aware of his/her duty to ensure compliance with the requirements of this subpart.(7) The signatures of the sellers, agents, and purchasers certify ing to the accuracy of their sta tements to the best of their knowledge, along with the dates of signature. (b) Lessor requirements. Each contract to lease target housing shall include, as an attachment or within the contract, the following elements, in the language of the contract (e .g., English, Spanish): (1) A Lead Warning Statement with the following language: Housing built before 1978 may contain lead - based paint. Lead from paint, paint chips, and dust can pose health hazards if not managed properly . Lead exposure is espe ciall y harmful to yo ung children and pregnant women. Before renting pre - 1978 housing, lessors must disclose the presence of lead - based paint and/or lead - based paint hazards in the dwelling. Lessees must also receive a federally

approved pamphlet on lead po isoning prevention. (2) A statement b y the lessor disclosing the presence of known lead - based paint and/or lead - based paint hazards in the target housing being leased or indicating no knowledge of the presence of lead - based paint and/or lead - based pai nt hazards. The lessor shall also disclose an y additional information available concerning the known lead - based paint and/or lead - based paint hazards, such as the basis for the determination that lead - based paint and/or lead - based paint hazards exist, the location of the lead - based paint and/or lead - based paint hazards, and the condition of the painted surfaces. (3) A list of an y records or reports available to the lessor pertaining to lead - based paint and/or lead - based paint hazards in the housing that have been provided to the lessee. If no such records or reports are available, the lessor shall so indicate. (4) A statement b y the lessee affirming receipt of the information set out in paragraphs (b)(2) and (b)(3) of this section and the lead hazard information pamphlet required under 15 U.S.C. 2696. (5) When one or more agents are involved in the transaction to lease target housing on behalf of the lessor, a statement that: (i) The agent has informed the lessor of the lessor as obligations u nder 42 U.S.C. 4852d; and (ii) The agent is aware of his/her duty to ensure compliance with the requirements of this subpart. (6) The signatures of the lessors, agents, and lessees, certify ing to the accuracy of their statements, to the best of the ir knowledge, along with the dates of signature. (c) Retention of Certification and Acknowledgment I nformation. (1) The seller, and an y agent, shall retain a cop y of the completed attachment required under paragraph (a) of this section for no less than 3 ye ars from the completion date of the sale. The lessor, and an y agent, shall retain a cop y of the completed attachment or lease contract containing the information required under paragraph (b) of this section for no less than 3 y ears from the commen cement of the leasing period. (2) This recordkeeping requirement is not intended to place an y limitations on civil suits under the Act, or to otherwise affect a lessee's or purchaser's rights under the civil penalty provisions of 42 U.S.C. 4852d(b)(3). (d) The seller, lessor, or agent shall not be responsible for the failure of a purchaser's or lessee's legal representative (where such representative receives all compensation from the purchaser or lessee) to transmit disclosure materials to the purc haser or lessee, provided that all required parties have completed and signed the necessary certification and acknowledgment language required under paragraphs (a) and (b) of this section.Sec. 745.115 Agent responsibilities.

(a) Each agent shall en sure compliance with all requirements of this subpart. To ensure compliance, the agent shall: (1) Inform the seller or lessor of his/her obligations under Secs. 745.107, 745.110, and 745.113. (2) Ensure that the seller or lessor has performed all a ctivities required under Secs. 745.107, 745.110, and 745.113, or personall y ensure compliance with the requirements of Secs. 745.107, 745.110, and 745.113. (b) If the agent has complied with paragraph (a)(1) of this section, the agent shall not be liab le for the failure to disclose to a purchaser or lessee the presence of lead - based paint and/or lead - based paint hazards known by a seller or lessor but not disclosed to the agent. Sec. 745.118 Enforcement. (a) An y person who knowingl y fails to comp ly with any provision of this subpart shall be subject to civil monetary

penalties in accordance with the provisions of 42 U.S.C. 3545 and 24 CFR part 30. (b) The Secretary is authorized to take such action as may be necessary

to enjoin any violation of this subpart in the appropriate Federal district court. (c) An y person who knowingl y violates the provisions of this subpart shall be jointly and severall y liable to the purchaser or lessee in an amount equal to 3 times the amount of damages incurred by

such individual. (d) In an y civil action brought for damages pursuant to 42 U.S.C. 4852d(b)(3), the appropriate court may award court costs to the party commencing such action, together with reasonable attorney fees and an y expert witness fees, if t hat party prevails. (e) Failure or refusal to comply with Sec. 745.107 (disclosure requirements for sellers and lessors), Sec. 745.110 (opportunity to conduct an evaluation), Sec. 745.113 (certification and acknowledgment of disclosure), or Sec. 745.11 5 (agent responsibilities) is a violation of 42 U.S.C. 4852d(b)(5) and of TSCA section 409 (15 U.S.C. 2689). (f) Violators may

be subject to civil and criminal sanctions pursuant to TSCA section 16 (15 U.S.C. 2615) for each violation. For purposes of e nforcing this subpart, the penalt y for each violation applicable under 15 U.S.C. 2615 shall not be more than $11,000 for all violations occurring after July

28, 1997; all violations occurring on or prior to that date are subject to a penalty not more than $10,000. [61 FR 9085, Mar. 6, 1996, as amended at 62 FR 35041, June 27, 1997] Sec. 745.119 Impact on State and local requirements. Nothing in this subpart shall relieve a seller, lessor, or agent from any responsibility

for compliance with State or local laws, ordinances, codes, or regulations governing notice or disclosure of known lead - based paint or lead - based paint hazards. Neither HUD nor EPA assumes an y responsibility for ensuring compliance with such State or local requirements.