Document ID: EPA-HQ-OPPT-2006-0969-0002
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-03-13T04:00Z

Supporting Statement for a Request for OMB Review under

the Paperwork Reduction Act

1.  IDENTIFICATION OF THE INFORMATION COLLECTION

l(a)  Title of the Information Collection

Title:	Disclosure Requirements of Known Residential Lead-Based Paint and
Lead-Based Paint Hazards

EPA ICR No.:	1710.05	OMB Control No:	2070-0151

1(b)  Short Characterization

Section 1018 of the Residential Lead-Based Paint Hazard Reduction Act of
1992 (the Act) (42 U.S.C. 4852d) directs the Environmental Protection
Agency (EPA) and the Department of Housing and Urban Development (HUD)
to jointly issue regulations requiring disclosure of known lead-based
paint and/or lead-based paint hazards by persons selling or leasing
housing constructed before the phase-out of residential lead-based paint
use in 1978.  Under that authority, EPA and HUD established the
following requirements at 40 CFR 745, Subpart F and 24 CFR 35, Subpart
H:  (1) Disclosure of all known lead-based paint (LBP) and LBP hazards
to potential buyers and lessees by sellers and lessors before the
selling or leasing of most housing built before 1978; (2) Disclosure
includes any and all LBP and LBP hazard information such as LBP
inspection reports, risk assessments, elevated blood lead level reports
and other data; (3) Sellers and lessors must provide purchasers and
lessees with a federally approved lead hazard information pamphlet; (4)
Sellers must provide purchasers with a 10-day opportunity to conduct a
risk assessment or inspection for the presence of lead-based paint
and/or lead-based paint hazards before the purchaser is obligated under
any purchase contract; (5) This disclosure activity is required of
sellers, lessors, and their agents; (6) Records of these disclosure
activities must be retained and maintained by sellers, lessors and
agents for a minimum of 3 years; and (7) Records must include signed and
dated disclosure forms and a list of available records and reports.  (61
FR 9085, March 6, 1996)  The requirements do not apply to housing that
has been found to be free of lead-based paint by a certified LBP
inspector, 0-bedroom dwellings, housing for the elderly, housing for the
handicapped, or short-term leases. 

These provisions ensure that families receive both specific information
on the housing(s lead history and general information on lead exposure
prevention.  With this information, consumers can make more informed
decisions concerning home purchase, lease, and maintenance to protect
their families from lead hazard exposure.

The affected parties and the supplemental requirements related to each
are described below:

Sellers of Pre-1978 Residential Housing: The rule requires that sellers
of pre-1978 housing complete and attach a disclosure form to their sales
contracts.  A sample form is provided in the preamble to the
regulations, but only the information elements are required, each
respondent can develop its own form.  The form must be signed by the
seller, purchaser, and any agent(s) acting on behalf of the seller.

Lessors of Pre-1978 Residential Housing:  The rule requires lessors of
pre-1978 housing to complete and attach a disclosure form to their
leasing contracts.  Again, while a sample form is provided, each
respondent is permitted to develop its own form.  The form must be
signed by the lessor and any agent(s) acting on behalf of the lessor. 
The form must then be retained by the lessor, and any agents acting on
their behalf.

Agents Acting On Behalf of Sellers or Lessors:  Section 1018 of the Act
specifically directs EPA to require agents acting on behalf of sellers
or lessors to ensure compliance with the disclosure regulations.

EPA and HUD have agreed to maintain a single ICR for these information
collection activities.  EPA will take the lead in preparing the
necessary documentation for renewals.

2.  NEED FOR AND USE OF THE COLLECTION

2(a)  Need/Authority for the Collection

The third party disclosure requirements that are contained in the
regulations are specifically mandated by section 1018 of the Act.  The
recordkeeping requirements contained in the regulations are necessary
for ensuring compliance with the provisions of the regulations.  

2(b)  Use/Users of the Data

The third party disclosure requirements attempt to ensure that families
receive both specific information on the housing(s lead history and
general information on lead exposure prevention.  With this information,
consumers may be able to make more informed decisions concerning home
purchase, lease, and maintenance to protect families from lead hazard
exposure.

The recordkeeping requirements enable EPA and HUD, as well as tribal
governments, state and local regulators and the courts, to both
determine compliance and effectively enforce section 1018 and the
provisions of the rule.  In addition, the Act provides a private cause
of action for persons harmed by violations of section 1018, and records
kept pursuant to this rule may be important evidence for these parties. 

3.  NON-DUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

3(a)  Non-Duplication

The third party disclosure and recordkeeping requirements covered by
this ICR are unique and are not in any way duplicated by another
information collection activity.

3(b)  Public Notice Required Prior to ICR Submission to OMB

Prior to submission to OMB, this ICR will be made available to the
public for comment through a Federal Register notice.  The public will
have 60 days to provide comments.  Any comments received will be given
consideration when completing the supporting statement that is submitted
to OMB.

3(c)  Consultations

EPA will pursue consultations with interested parties during the
development of the renewal of this collection.

3(d)  Effects of Less Frequent Collection

The third party disclosure occurs when the regulated entities are
engaged in a specific transaction, i.e., the sale or lease of target
housing.  As such, it is not possible or appropriate to consider a less
frequent disclosure interval.  

3(e)  General Guidelines

This rulemaking is consistent with OMB(s General Guidelines for
information collections under the PRA. Although no form is imposed by
the regulations, to facilitate and simplify compliance, EPA and HUD
provide a sample form for respondents to adopt or modify for their use.
Since this form is simply a sample, it does not contain a PRA Notice,
OMB number, or expiration date.

3(f)  Confidentiality

This collection does not require the disclosure or retention of
confidential information. The third party disclosure requirements also
comply with the provisions of the Privacy Act of 1974 and OMB Circular
A-108.

3(g)  Sensitive Questions

This collection does not include questions of a sensitive nature.

4.  THE RESPONDENTS AND THE INFORMATION REQUESTED

4(a)  Respondents/NAICS Codes

The respondent universe for this ICR includes sellers, purchasers,
lessors, and lessees of non-exempt residential dwellings built before
1978, or real estate agents representing such parties. 

Respondents affected by this collection activity primarily include those
businesses that fall under NAICS code 531, Real Estate, plus private
parties engaged in sale or lease transactions.

Categories	

NAICS Codes	

Examples of potentially-affected entities

Real Estate Operators/ Lessors	

53111	

Lessors of residential buildings and dwellings

Offices of Real Estate Agents/ Property Managers	

53121

53131	

Real estate agents and brokers

Property managers

Private Parties(Sales Transactions	

None	

Sellers and buyers of residential dwellings 

Private Parties(Lease Transactions	

None	

Landlords and tenants of residential dwellings

This listing is not intended to be exhaustive.  The North American
Industrial Classification System (NAICS) codes have been provided to
assist you and others in determining whether or not this action applies
to certain entities.  To determine whether a particular entity is
affected by this action, you should carefully examine the applicability
provisions in 40 CFR 745.100.

4(b)  Information Requested

(i) Data Items

When engaged in the subject activity, i.e., the sale or lease of target
housing, the Respondent must maintain the following records:  

- Signed, dated, and completed disclosure forms from sales and leases
involving the target housing

- Known information on LBP and LBP hazards in the target housing

(ii) Respondent Activities

When engaged in the subject activity, i.e., the sale or lease of target
housing, the Respondent must perform the following activities:

- Read the regulation to learn the basic requirements 

- Prepare and complete the written form

- Store, file, and maintain the information for at least three years

5. THE INFORMATION COLLECTED--AGENCY ACTIVITIES, COLLECTION METHODOLOGY,
AND INFORMATION MANAGEMENT

5(a)  Agency Activities

The primary purpose of this information collection activity is the
provision of certain information between two parties in a transaction,
i.e., third party disclosure.  The agencies are therefore primarily
engaged in the following basic activities:

- Public outreach to assist in the understanding of, and compliance
with, the rule requirements

- The development and maintenance of an infrastructure for receiving
tips and complaints regarding alleged violations of the regulations

- Compliance monitoring and enforcement of the provisions in the
regulation

5(b)  Collection Methodology and Management

This is a third party disclosure requirement that occurs on a specific
occasion.  There is no information collection by the agencies.  Records
are required to be retained by regulated parties and made available to
the agencies as part of compliance monitoring and enforcement
activities.

5(c)  Small Entity Flexibility

The affected population for this rule is largely comprised of small
entities, and all of the requirements have been crafted to maximize
flexibility. EPA and HUD have also developed guidance and a sample form
to further facilitate and assist small entities with compliance.

5(d)  Collection Schedule

The third party disclosure is transaction specific and only occurs when
the regulated entities are engaged in a specific transaction, i.e., the
sale or lease of target housing.

6.  ESTIMATING THE BURDEN AND COST OF THE COLLECTION

6(a)-(b) Estimating Respondent Burden and Costs 

Burden hour and associated annual costs have been estimated for three
classes of respondents identified as being affected by the lead-based
paint hazard disclosure rule for real estate transfers:

1.	Property Owners and Lessors

2.	Offerors/Buyers and Lessees/Tenants.

3. 	Agents acting on behalf of Property Owners and Lessors, and Agents
acting on behalf of Offerors/Buyers (following prior analyses, it is
assumed that there are no agents acting on behalf of lessees or tenants)

Burden hours and costs were estimated for four activities:

1.	Start-Up Activity

2.	Disclosure Record Preparation Activity

3.	Record-Keeping

4.	Materials.

The burden hour and cost estimates are summarized in the attached tables
and discussed below.  The estimates of annual individual burden hours in
this analysis were developed using the methods and estimates previously
developed and reported in the Regulatory Impact Analysis (RIA) for the
disclosure rule for transfers, using updated costs, numbers of persons
and numbers of transactions.  For the ICR burden analysis, burden hours
per individual respondent for a given activity were estimated from the
total number of annual burden hours in that activity (based on total
events or total persons affected as reported in the regulatory analysis)
divided by the estimated total number of respondent parties that would
potentially be affected by the disclosure rule. 

Note that this analysis uses the NAICS code system of industry
classifications throughout.  The analyses done for the original ICR and
for the previous ICR renewal used the older SIC classification system
for some or all of the data and calculations. The transition from SIC to
NAICS is not likely to have introduced any major changes in the burden
and cost estimates, since there is no great difference between the
industry definitions under NAICS and the SIC definitions.

The per-event time requirements in the table below are estimates as
previously presented in the RIA.  The number of events reported in this
table are explained in more detail later in this analysis.



Summary of time requirements for time-related cost components

assuming that 85% of sales and rentals involve agents

	

Time required	

total number

Start-up burden for training and preparation	

New real estate agents (NAICS 5312)	

1 hour	

26,813

New Lessors (NAICS 5311)	

1 hour	

13,769

Each home seller	

1 hour	

3,720,000

Disclosure events per sale (assuming two offers per sale)	

Sellers	

5 minutes x 2	

3,720,000

Agent for sellers	

5 minutes	

3,720,000 x 85% = 3,162,000

Offerors	

5 minutes x 2	

3,720,000

Agents for offerors	

5 minutes x 2	

3,720,000 x 85% = 3,162,000

Disclosure events per rental	

Owners/lessors	

5 minutes	

7,500,000

Agents for owners/lessors	

5 minutes	

7,500,000 x 85% = 6,375,000

 tenants/lessees	

5 minutes	

7,500,000

Record-keeping time	

Seller	

0.5 minutes	

3,720,000

Agent for seller	

0.5 minutes	

3,720,000 x 85% = 3,162,000

Owners/lessors	

0.5 minutes	

7,500,000

Agent for owners/lessors	

0.5 minutes	

7,500,000 x 85% = 6,375,000

Cost of Respondents( Time

The method of estimating the cost of a respondent(s time depends on
whether he or she is a paid employee acting as an agent for some other
party, or is an unpaid individual acting on his or her own behalf. The
cost of an employed agent(s time is the fully loaded hourly cost,
including wages, benefits, and overhead. The cost of time for an
individual acting for themself is estimated to be the value that they
would place on a marginal unit of leisure or, conversely, the net income
they would receive from a marginal unit of additional work. Thus their
time is valued at their after-tax wage rate. 

The hourly wage rate for the agents for sellers and offerors used in
this analysis is $19.85 per hour, which is the most recently reported
(May 2005 data) mean hourly wage from the Bureau of Labor Statistic(s
National Industry-Specific Occupational Employment and Wage Estimates
for NAICS 5312, offices of real estate agents and brokers.  Similarly,
the hourly wage rate for the agents for lessors  used in this analysis
is $15.73, reported from the same source for NAICS 5311, lessors of real
estate. Non-wage benefits were estimated at 32.83% of wages, as
calculated based on data on benefits for service producing industry
workers in Table 5 of Employer Cost for Employee Compensation ( June
2006 (Bureau of Labor Statistics, data released on September 22, 2006). 
The service sector data was used because information on cost of benefits
is not currently available on a NAICS code basis. An additional 17% of
the hourly wage rate has been added for overhead costs.  This gives an
estimated total hourly labor cost of $29.74 for the agents of sellers
and offerors and $23.57 for the agents of lessors. 

The agents discussed above are affected by this rule as part of their
occupation.  It is assumed that sellers, buyers, lessors, and
lessees/tenants engage in these activities on their own behalf and not
as part of their occupations.  Time that is not part of the person(s
occupation is valued at its opportunity cost, which is value that the
individual would place on his or her next best alternative activity.
Economists generally assume that the opportunity cost marginal value of
an individual(s time is best estimated by their marginal earnings, net
of taxes and social insurance deductions. This analysis uses an estimate
of $13.47 per hour for the cost or value of time for those respondents
acting on their own behalf, not as paid employees.

From Table 1-1 in the June 2005 Compensation Survey (BLS Bulletin 2581,
August 2006), the mean hourly earnings rate over all occupations is
$18.62. This value was reduced by 27.65 percent to $13.47 to account for
income tax, the employee(s share of FICA, and the medicare tax payment.
The current marginal Federal Income Tax rate for most workers is either
15 percent or 25 percent, so 20 percent was chosen to represent the
typical or average rate. The employee(s FICA contribution for most
workers is 6.2 percent of their wage, and their medicare contribution is
1.45 percent. That gives a total of 27.65 percent.

Economic cost of respondents( time

Real estate agents, NAICS 5312	

$29.74

Lessors of real estate, NAICS 5311	

$23.57

Individuals acting on their own behalf	

$13.47

Target Housing Sales and Rental Events

The estimated number of target housing sales per year is based on an
estimate of the share of owner-occupied housing units that were built
prior to the ban of the use of lead-based paint in residences,
multiplied by an estimate of the number of existing home sales  per
year. The number of target housing rental events is based on the number
of households occupying target rental housing who report having moved
during a one-year period. 

As in previous analyses, this report maintains the assumption that 85
percent of home buyers and sellers and 85 percent of lessors are
represented by paid agents, and that the remaining 15 percent of those
groups as well as 100 percent of tenants/lessees act on their own behalf
without the assistance of paid agents.

Data on the age of both owner-occupied and rental housing, and related
information, is available from the American Housing Survey for the
United States: 2005, issued jointly by the U.S. Dept. of Housing and
Urban Development and the U.S. Census Bureau in August 2006. An estimate
of the expected number of existing home sales in 2007 is available in
the National Association of Realtors( forecast titled U.S. Economic
Outlook: October 2006, accessed on-line from
www.realtor.org/research/index.html.

For the purposes of the 1018 notification regulations, target housing is
housing built prior to 1978 and which also meets certain other
conditions. According to the 2005 housing survey (Table 3-1 on page
110), at the time of the survey the existing U.S. owner-occupied housing
stock consisted of 38.7 million units built prior to 1975, 8.0 million
units built during the period 1975-1979, and 28.2 million units built
after 1979. Calculating from those numbers (and assuming that 3/5 of the
units built in 1975-1979 were built before 1978), we estimate that 58.1
percent of the stock of existing owner-occupied housing is target
housing. The estimates from the National Association of Realtors project
6.4 million existing home sales in 2007. Multiplying 6.4 million by 58.1
percent gives us an estimate of 3.72 million target housing sales per
year. 

There is no available data that reports directly on the number of
housing rental events per year. However, the 2005 housing survey (Table
4-1 on page 190) does report on the number of renter occupied units that
were, at the time of the survey, occupied by households who had moved in
the past year. This number can be used as a proxy to estimate the number
of new rentals, with a caveat. This procedure will produce an
underestimate, to the degree that some of those households may have
moved more than once during that one-year period. 

The data reported in the survey indicates that there 6.5 million units
built prior to 1975 and occupied by households who had moved in the year
prior to the survey, 1.7 million such units built during the period 1975
to 1979, and 4.1 million such units built after 1979. Assuming that 3/5
of the units dating to 1975-1979 are pre-1978, we can estimate that
there were about 7.5 million target housing rentals during the year
preceding the survey. Thus this analysis will assume that there will be
7.5 million additional target housing rentals per year, for each year
over the course of this ICR renewal. 

Start-Up Burden

The start-up burden involves the time and cost required for individuals
and agents to learn the disclosure rule's requirements and set up
procedures for meeting those requirements.  Based on the RIA, the time
required  to learn the rule and set up compliance procedures was
estimated to be one hour.  

This analysis assumes that real estate sales agents, sellers of rental
property, and property managers only incur this start-up burden once,
when they initially enter the profession.  Since the rule(s initial year
has passed, the calculation assumes a (typical year( number of  new
entrants, who will incur the start-up costs in their first year.  The
number of new entrants is based on two factors: the turnover associated
with replacement of retirees, and growth rate of this employment
category over time. 

The estimated compound annual growth rate is calculated using the number
of employees for NAICS code 53121 (real estate agents and brokers) using
U.S. Census Bureau County Business Patterns survey data over the period
1998 to 2004, the years for which NAICS code based data is currently
available.  The Census reports a total of 241,082 employees in that
category in 1998, and 323,045 as of 2004. Calculated from those numbers,
the annual geometric growth rate in employees over that period is
estimated to be  5.0 percent. 

The Agency currently does not have information on the employee turnover
rate for NAICS industry sectors. Assuming that a typical worker might
retire after thirty years, and if the age distribution were uniform,
then the retirement rate (and thus the retirement replacement rate)
would be about 3.3 percent. In a growing industry (such as this), one
would expect the proportion of retirement-age workers would be smaller
that for younger cohorts. On the other hand, some unknown number of
workers undoubtedly leave the industry before retirement. For purposes
of this analysis, we assume that 3.3 percent represents a reasonable
estimate of the turnover rate.  

The 5.0 percent growth rate combined with the 3.3 percent turnover rate
equals a new-agent training rate of 8.3 percent. When that rate is
applied to the 323,045 NAICS code 53121 employees in 2004, that
translates into 26,813 new agents incurring start-up costs each year.

	

Individual sellers and lessors also incur this start-up burden, when
they first encounter the disclosure rule.  The analysis assumes that
each seller is encountering the disclosure rule for the first time. 
This may lead to an over-count, since individuals may sell their current
home and move on multiple occasions.  The owner/lessor of rental
property may be more likely to encounter the disclosure rule more than
once, if the lessor handles more than one target housing property or
rents the same property more than once.  Thus, to prevent possible
multiple counting of start-up costs this analysis assumes that the
owner/lessor has already encountered the rule and is therefor not a new
entrant.  While there may be some lessors who are first encountering
this rule, there also may be some sellers who have encountered this rule
previously, so that an undercount on lessors may be matched by an
overcount on sellers.

While this analysis does not count owner/lessors as new entrants, it
does consider that the agents acting on their behalf incur this start-up
burden when they enter the profession.  This portion of the start-up
burden is captured through data on employment in NAICS code 53111
(lessors of residential buildings and property).  As for real estate
agents, the number of new entrants among lessors is based on two
factors: the turnover associated with replacement of retirees and other
departing workers, and growth rate of this employment category over
time. 

The estimated compound annual growth rate is calculated using the number
of employees for NAICS code 53111 (lessors of residential buildings and
dwellings) using U.S. Census Bureau County Business Patterns survey data
over the period 1998 to 2004, the years for which NAICS code based data
is currently available.  The Census reports a total of 276,449 employees
in that category in 1998, and 299,321 as of 2004. Calculated from those
numbers, the annual geometric growth rate in employees over this period
is estimated to be 1.3 percent. 

As noted above, the Agency currently does not have information on the
employee turnover rate for NAICS industry sectors. Assuming that a
typical worker might retire after thirty years, and if the age
distribution were uniform, then the retirement rate (and thus the
retirement replacement rate) would be about 3.3 percent. For purposes of
this analysis, we assume that 3.3 percent represents a reasonable
estimate of the turnover rate.  

The 1.3 percent growth rate combined with the 3.3 percent turnover rate
equals a new-agent training rate of 4.6 percent. When that rate is
applied to the 299,321 NAICS code 53111 employees in 2004, that
translates into 13,769 new lessors incurring start-up costs each year.



Annual start-up burden hours and cost for training and preparation

	

burden hours	

hourly cost	

total cost

New agents for sellers (NAICS 53121)	

26,813	

$29.74	

$797,419

New agents for owners/lessors (NAICS 53111)	

13,769	

$23.57	

$324,535

Each home seller	

3,720,000	

$13.47	

$50,108,400

Total	

	

	

$51,230,354

Start-up burden for sales	

3,746,813	

	

$50,905,819

Start-up burden for rentals	

13,769	

	

$324,535

Disclosure Record Preparation Burden

The disclosure record preparation burden involves the time and cost for
performing the disclosure activities in conjunction with the sale or
rental of target housing as specified by the rule.  The annual
individual disclosure burden for both sales and rental agents is based
on the annual number of sales and rental transactions handled by agents,
the estimated amount of time required to perform each disclosure
(Regulatory Impact Analysis of Lead-Based Paint Hazard Disclosure Rule
for Real Estate Transfers, 1995 ), and the total number of respondents. 
Each instance is estimated to take five minutes for each of the parties.
 For each sale handled by an agent on the sellers side, the agent is
expected to explain the rule to the seller.  For each offer in each sale
handled by an agent on the offeror(s side, the agent is expected to
explain the rule to the offeror. Thus for each sale without an agent the
analysis assumes a total burden of twenty minutes (five minutes on each
of two sides, for two offers), and a total burden of thirty five minutes
when the sale has an agent for each offeror and for the seller (twenty
minutes plus five minutes for each of three agents).



Disclosure and record preparation burden and cost

Sales disclosure burden, based on an estimated 3,720,000 target housing
unit sales per year

	

minutes of burden per sale/rental	

burden in minutes	

burden in hours	

hourly cost	

Total cost

Sellers	

5 x 2	

37,200,000	

620,000	

$13.47	

$8,351,400

Agent for sellers	

5 x 85%	

15,810,000	

263,500	

$29.74	

$7,836,490

Offerors	

5 x 2	

37,200,000	

620,000	

$13.47	

$8,351,400

Agents for offerors	

5 x 2 x 85%	

31,620,000	

527,000	

$29.74	

$15,672,980

Total for sales	

	

	

2,030,500	

	

$40,212,270

Rentals disclosure burden, based on an estimated 7,500,000 target
housing unit rentals per year

Owners/lessors	

5	

37,200,000	

625,000	

$13.47	

$8,418,750

Agents for owners/lessors	

5 x 85%	

31,875,000	

531,250	

$23.57	

$12,521,563

 tenants/lessees	

5	

37,500,000	

625,000	

$13.47	

$8,418,750

Total for rentals	

	

	

1,781,250	

	

$29,359,063

Overall total for disclosure record preparation	

	

	

3,811,750	

	

$69,571,333

Record-Keeping Burden

The record-keeping burden involves the time and cost for meeting the
disclosure rule's record-keeping requirements.  The annual individual
record-keeping burden for both sales and rental agents is based on the
annual number of sales and rental transactions handled by agents, the
estimated amount of time required, per event, to comply with the record
keeping requirement (Regulatory Impact Analysis of Lead-Based Paint
Hazard Disclosure Rule for Real Estate Transfers, 1995 ), and the total
number of respondents.

The record-keeping provisions of this rule require that both the seller
and the selling agent (or in the case of rentals, both the
owners/lessors and their agents) maintain records of the signed
disclosure. The record-keeping requirement causes them to spend time in
filing the specified documents.  In all likelihood, some type of filing
system already exists for each party. The incremental filing time that
may reasonably attributed to the disclosure rule itself should be very
small, or approximately 0.5 minutes (0.0083 hours) per record.

Record keeping burden and cost

	

total records	

hours per record	

total hours	

hourly cost 	

total cost

Sellers	

3,720,000	

0.0083	

30,876	

$13.47	

$415,900

Agents for sellers	

3,162,000	

0.0083	

26,245	

$29.74	

$780,526

Owners/lessors	

7,500,000	

0.0083	

62,250	

$13.47	

$838,508

Agent for owners/lessors	

6,375,000	

0.0083	

52,913	

$23.57	

$1,247,159

Totals	

	

	

172,283	

	

$3,282,093

Record-keeping burden and cost for sales	

	

	

57,121	

	

$1,196,426

Record-keeping burden and cost for rentals	

	

	

115,163	

	

$2,085,667

 

Materials Burden

The materials burden involves the cost of materials required for rule
compliance.  Materials costs include Lead Hazard Pamphlets, filing
materials, and copies to be made.  The sellers and lessors may choose to
provide these materials themselves or to have their agents manage these
materials. But for simplicity, this analysis assumes that these costs
are borne by the principals, the sellers and the lessors.

The Lead Hazard Pamphlets are 16 pages in length, printed front and
back, folded sheet format (i.e. four sheets of standard sized paper per
document), at $0.54 per pamphlet.  The total cost of the pamphlet
incurred by real estate agents is calculated using the cost per
pamphlet, the total number of offers per sale of target housing (two
offers/sale), and the number of sales and rentals of target housing
which involve an agent.  The number of offers per sale of target housing
is based on the RIA.



Pamphlet costs

	

number of sales or rentals	

number of pamphlets needed	

cost per pamphlet	

total cost

Sales	

3,720,000	

7,440,000	

$ 0.54	

$4,017,600

Rentals	

7,500,000	

7,500,000	

$ 0.54	

$4,050,000

total	

	

14,940,000	

	

$8,067,600

It is assumed that there is one copy of a signed acknowledgment and
disclosure statement for every offer or rental contract.  It is assumed
that each statement will require no more than one side of a single sheet
of paper.  For sales and rentals involving an agent, three sets of the
contract must be generated by the agent (one for the buyer/lessee, one
for the seller/lessor and one for the agent) for a total of three
copies.  In addition, sales transactions will also require a one-page
lead-based paint inspection contingency clause for each party.  Those
are not required for rentals.  The following table summarizes the number
of pages required for each sale or rental.  This analysis assumes two
offers per sale (RIA). 

Copy and filing costs (disclosure/acknowledgment and paint inspection
contingency clause)

	

pages per sale or rental	

number of events	

total pages	

copying cost at 6 ( per page	

Filed pages	

Filing cost at 0.6 ( per sheet

Sales without agents	

8	

558,000	

4,464,000	

$267,840	

n/a	

Sales with agents	

12	

3,162,000	

37,944,000	

$2,276,640	

6,324,000	

$37,944

Rental without agents	

2	

1,125,000	

2,250,000	

$135,000	

n/a	

Rental with agents	

4	

6,375,000	

25,500,000	

$1,530,000	

12,750,000	

$76,500

	

	

	

70,158,000	

$4,209,480	

	

$114,444

Copies are assumed to cost $0.06 per copy.  For 70 million pages the
total copying cost will be $4.2 million. 

Filing-related material costs include the cost of storing the signed
disclosure and acknowledgment statements that result from a completed
transaction.  Filing costs for individual buyers and sellers and owners
and renters are considered a negligible incidental expense.  The filing
costs are assumed to only for agents.  For filing materials, it is
assumed a four drawer, 25-inch deep filing cabinet can hold 25,000
sheets of paper and costs approximately $140 (discount office supply
price, August, 2003).  This translates into a $0.006 cost per sheet of
paper.  For each sale or rental transaction, agents are assumed to
retain one sheet of paper containing a signed disclosure and
acknowledgment statement.

Materials costs summary

	

sales	

rentals

pamphlet costs	

$4,017,600	

$4,050,000

copy costs	

$2,544,480	

$1,665,000

filing costs	

$37,944	

$76,500

total by type of event	

$6,600,024	

$5,791,500

overall total materials cost	

$12,391,524

Total Burden and Costs

Burden and cost for real estate sales

	

burden hours	

cost

Start-up	

3,746,813	

$50,905,819

Disclosure event	

2,030,500	

$40,212,270

Record keeping	

57,121	

$1,196,426

Materials	

n/a	

$6,600,024

Total	

5,834,434	

$98,914,539



Burden and cost for rentals

	

burden hours	

cost

Start-up	

13,769	

$324,535

Disclosure event	

1,781,250	

$29,359,063

Record keeping	

115,163	

$2,085,667

Materials	

n/a	

$5,791,500

Total	

1,910,182	

$37,560,765

Aggregate burden and costs for the residential lead-based paint hazard
disclosure ICR

	

burden hours 	

cost

Sales 	

5,834,434	

$98,914,539

Rentals	

1,910,182	

$37,560,765

total	

7,744,616	

$136,475,304

Burden and Cost by Respondent Class

The following table presents the burden and costs by respondent class: 
real estate sales and rental agents; property owners and lessors; and
offerors/buyers and lessees/tenants.  The filing-related materials costs
are assumed to fall on agents, with the remainder of materials costs
falling on sellers and owners/lessors.



Burden and costs by respondent class

respondent class activity	

burden hours	

hourly cost	

annual cost

start-up burden for NAICS 5312	

26,813	

$29.74	

$797,419

start-up burden for NAICS 5311	

13,769	

$23.57	

$324,535

sales disclosure event burden for sellers agents	

263,500	

$29.74	

$7,836,490

sales disclosure event burden for offerors( agents	

527,000	

$29.74	

$15,672,980

rental disclosure event burden for agents	

531,250	

$23.57	

$12,521,563

record keeping burden for sales agents	

26,245	

$29.74	

$780,526

record keeping burden for rental agents	

52,913	

$23.57	

$1,247,159

total burden and costs for all agents	

1,441,490	

	

$39,180,672

start-up burden for sellers	

3,720,000	

$13.47	

$50,108,400

sales disclosure event burden for sellers	

620,000	

$13.47	

$8,351,400

rental disclosure event burden for owners/lessors	

625,000	

$13.47	

$8,418,750

record keeping burden for sellers	

30,876	

$13.47	

$415,900

record keeping burden for owners/lessors	

62,250	

$13.47	

$838,508

materials costs for sellers	

n/a	

n/a	

$6,600,024

materials costs for owners/lessors	

n/a	

n/a	

$5,791,500

total burden and costs for sellers and owners/lessors	

5,058,126	

	

$80,524,482

sales disclosure event burden for offerors	

620,000	

$13.47	

$8,351,400

rental disclosure event burden for tenants/lessees	

625,000	

$13.47	

$8,418,750

total burden and costs for offerors and tenants/lessees	

1,245,000	

	

$16,770,150

total burden and costs for all respondents	

7,744,616	

	

$136,475,304

Unit Burden Hours

The burden of the disclosure rule affects six groups.  Four of those
groups consist of the individuals involved in sale and rental
transactions, and two groups are agents acting on behalf of some of
those individuals.  The individuals are assumed to bear their burden as
individuals, but the burden on agents falls on the establishments at
which they are employed.  Those establishments are in NAICS code 53121
(offices of real estate agents & brokers) and NAICS code 53111 (lessors
of residential buildings & dwellings).  To determine the burden on those
establishments, the total burden on those groups is divided by the
number of establishments as estimated in the 2004 County Business
Pattern Survey.

Unit burden summary for individuals

	

start-up burden	

disclosure event burden	

record-keeping burden	

total burden per individual

Sellers	

1 hour	

5 minutes	

0.5 minutes	

65.5 minutes

Offerors	

	

5 minutes	

	

5 minutes

Owners/lessors	

	

5 minutes	

0.5 minutes	

5.5 minutes

tenants/lessees	

	

5 minutes	

	

5 minutes

Unit burden summary for establishments

	

Agents for sellers and offerors 

NAICS 5312	

Agents for owners/lessors 

NAICS 5311

Aggregate start up burden	

26,813 hours	

 13,769 hours

Aggregate disclosure event burden	

 790,500 hours	

 531,250 hours

Aggregate record-keeping burden	

 26,245 hours	

 52,913 hours

Total aggregate burden	

843,558  hours	

597,932  hours

Number of establishments	

 323,045 establishments	

 299,321 establishments

Unit burden	

 2.61 hours per establishment	

 2.00 hours per establishment

6(c)  Estimating Agency Burden and Costs

The primary purpose of this information collection activity is the
provision of certain information between two parties in a transaction,
and constitutes a third party disclosure under the PRA.  The Agency
burden and costs associated with this activity are, therefore, limited
to the provision of guidance and program oversight or enforcement.  As
such, there is no need to estimated the related Agency burden and costs
under the PRA.

6(d)  Reasons for the Change in Burden

There is a decrease of 1,110,994 hours (from 8,855,610 hours to
7,744,616 hours) in the total estimated respondent burden compared with
that currently in the OMB inventory.  This decrease reflects the
gradually declining share of target housing in the nation(s housing
stock.

Despite the decrease in the estimated number of hours, the estimated
total annual costs remain essentially constant. This is because
increases in labor wage rates offset the expected reduction in burden
hours.

These differences reflect adjustments to the burden estimates arising
from changes in the housing market and to wage rates, and do not reflect
any program changes.

6(e)  Burden Statement

Each of an estimated 3,720,000 target housing sales per year is assumed
to involve one seller and two offerors and, in 85 percent of the cases,
their agents, for an average of 5.55 respondents per housing unit sale
or a total of 20,646,000 respondents.  The total burden on target
housing is estimated at 5,834,434 hours and $98,914,539 (including
materials costs).  The average burden is estimated to be 0.28 hours and
$4.89 per respondent. 

Each of an estimated 7,500,000 target housing rentals per year is
assumed to involve one lessor and one lessee, with the lessor
represented by an agent in 85 percent of the cases, for an average of
2.85 respondents per housing unit rental or a total of 21,375,00
respondents. The total burden from target housing rental is estimated at
1,910,182 hours and $37,560,765 (including materials costs). The average
burden is estimated to be 0.09 hours and $1.76 per respondent. 

Overall, there will be an estimated 42,021,000 respondents per year and
a total annual estimated burden of 7,744,616 hours and $136,475,304. 
The overall average burden is estimated to be 0.18 hours and $3.30 per
respondent.

Under the PRA, "burden" means the total time, effort, or financial
resources expended by persons to generate, maintain, retain, disclose,
or provide information to or for a Federal agency. Although these
requirements also apply to the Federal government, the PRA does not
require EPA and HUD to estimate the potential burden or costs associated
with the information collection activities performed by Federal
agencies. For this collection it includes the time needed to amend this
list as appropriate, but use these terms; review instructions; develop,
acquire, install, and utilize technology and systems for the purposes of
collecting, validating, and verifying information, processing and
maintaining information, and disclosing and providing information;
adjust the existing ways to comply with any previously applicable
instructions and requirements; train personnel to be able to respond to
a collection of information; search data sources; complete and review
the collection of information; and transmit or otherwise disclose the
information. 

An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently
valid OMB control number. The OMB control numbers for EPA's information
collections appear on the collection instruments or instructions, in the
Federal Register notices for the related rulemaking and ICR notices,
and, if the collection is contained in a regulation, in a table of OMB
approval numbers for EPA regulations in 40 CFR part 9. The OMB control
numbers for HUD regulations appear with the regulations.



ATTACHMENT 1

 Residential Lead-Based Paint Hazard Reduction Act of 1992 (the Act)

42 USC 4852d

TITLE 42--THE PUBLIC HEALTH AND WELFARE

 

CHAPTER 63A--RESIDENTIAL LEAD-BASED PAINT HAZARD REDUCTION

 

SUBCHAPTER I--LEAD-BASED PAINT HAZARD REDUCTION

 

Sec. 4852d. Disclosure of information concerning lead upon transfer of
residential property

(a) Lead disclosure in purchase and sale or lease of target housing

           (1) Lead-based paint hazards

    Not later than 2 years after October 28, 1992, the Secretary and the
Administrator of the Environmental Protection Agency shall promulgate
regulations under this section for the disclosure of lead-based paint
hazards in target housing which is offered for sale or lease. The
regulations shall require that, before the purchaser or lessee is
obligated under any contract to purchase or lease the housing, the
seller or lessor shall--

        (A) provide the purchaser or lessee with a lead hazard
information pamphlet, as prescribed

    by the Administrator of the Environmental Protection Agency under
section 406 of the Toxic 

    Substances Control Act [15 U.S.C. 2686];

        (B) disclose to the purchaser or lessee the presence of any
known lead-based paint, or any

    known lead-based paint hazards, in such housing and provide to the
purchaser or lessee any

    lead hazard evaluation report available to the seller or lessor; and

        (C) permit the purchaser a 10-day period (unless the parties
mutually agree upon a different

    period of time) to conduct a risk assessment or inspection for the
presence of lead-based 

    paint hazards.

             (2) Contract for purchase and sale

    Regulations promulgated under this section shall provide that every
contract for the purchase and sale of any interest in target housing
shall contain a Lead Warning Statement and a statement 

signed by the purchaser that the purchaser has--

        (A) read the Lead Warning Statement and understands its
contents;

        (B) received a lead hazard information pamphlet; and

        (C) had a 10-day opportunity (unless the parties mutually agreed
upon a different period of

    time) before becoming obligated under the contract to purchase the
housing to conduct 

    a risk assessment or inspection for the presence of lead-based paint
hazards.

           (3) Contents of lead warning statement

    The Lead Warning Statement shall contain the following text printed
in large type on a separate sheet of paper attached to the contract:

    ``Every purchaser of any interest in residential real property on
which a residential dwelling was built prior to 1978 is notified that
such property may present exposure to lead from lead-based paint that
may place young children at risk of developing lead poisoning. Lead
poisoning in young 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 property is required to provide the buyer with any
information on lead-based paint hazards from risk assessments or
inspections in the seller's possession and notify the buyer of any known
 lead-based paint hazards. A risk assessment or inspection for possible
lead-based paint hazards   is recommended prior to purchase.''.

           (4) Compliance assurance

    Whenever a seller or lessor has entered into a contract with an
agent for the purpose of selling or leasing a unit of target housing,
the regulations promulgated under this section shall require the agent,
on behalf of the seller or lessor, to ensure compliance with the
requirements of this section.

           (5) Promulgation

    A suit may be brought against the Secretary of Housing and Urban
Development and the Administrator of the Environmental Protection Agency
under section 20 of the Toxic Substances Control Act [15 U.S.C. 2619] to
compel promulgation of the regulations required under this section and
the Federal district court shall have jurisdiction to order such
promulgation.

(b) Penalties for violations

           (1) Monetary penalty

    Any person who knowingly violates any provision of this section
shall be subject to civil money penalties in accordance with the
provisions of section 3545 of this title.

           (2) Action by Secretary

    The Secretary is authorized to take such lawful action as may be
necessary to enjoin any violation of this section.

           (3) Civil liability

    Any person who knowingly violates the provisions of this section
shall be jointly and severally liable to the purchaser or lessee in an
amount equal to 3 times the amount of damages incurred by such
individual.

           (4) Costs

        In any civil action brought for damages pursuant to paragraph
(3), the appropriate court may award court costs to the party commencing
such action, together with reasonable attorney fees and any expert
witness fees, if that party prevails.

           (5) Prohibited act

    It shall be a prohibited act under section 409 of the Toxic
Substances Control Act [15 U.S.C. 2689] for any person to fail or refuse
to comply with a provision of this section or with any rule or order
issued under this section. For purposes of enforcing this section under
the Toxic Substances Control Act [15 U.S.C. 2601 et seq.], the penalty
for each violation applicable under section 16 of that Act [15 U.S.C.
2615] shall not be more than $10,000.

(c) Validity of contracts and liens

    Nothing in this section shall affect the validity or enforceability
of any sale or contract for the purchase and sale or lease of any
interest in residential real property or any loan, loan agreement,
mortgage, or lien made or arising in connection with a mortgage loan,
nor shall anything in this section create a defect in title.

(d) Effective date

    The regulations under this section shall take effect 3 years after
October 28, 1992.

(Pub. L. 102-550, title X, Sec. 1018, Oct. 28, 1992, 106 Stat. 3910.)

           References in Text

    The Toxic Substances Control Act, referred to in subsec. (b)(5), is
Pub. L. 94-469, Oct. 11, 1976, 90 Stat. 2003, as amended, which is
classified generally to chapter 53 (Sec. 2601 et seq.) of Title 15,
Commerce and Trade. For complete classification of this Act to the Code,
see Short Title note set out under section 2601 of Title 15 and Tables.

           Section Referred to in Other Sections

    This section is referred to in section 4856 of this title; title 15
section 2686.



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 F

TITLE 40--PROTECTION OF ENVIRONMENT

 

CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)

 

PART 745--LEAD-BASED PAINT POISONING PREVENTION IN CERTAIN RESIDENTIAL
STRUCTURES

 

Subpart F--Disclosure of Known Lead-Based Paint and/or Lead-Based Paint
Hazards Upon Sale or Lease of Residential Property

 

Sec. 745.100  Purpose.

    This subpart implements 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
and/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 certification
program or under a federally 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 prior finding.

    (c) Short-term leases of 100 days 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 where 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 dates.

    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 Lead-Based Paint Hazard Reduction Act
of 1992, 42 U.S.C. 4852d.

    Agent means any party who enters into a contract with a seller or
lessor, including any party 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 any
purchaser's representative who receives all compensation from the
purchaser.

    Available means in the possession of or reasonably obtainable by the
seller or lessor at the time of the disclosure.

    Common area means a portion of a building generally accessible to
all residents/users including, but not limited to, hallways, stairways,
laundry and recreational rooms, playgrounds, community centers, and
boundary fences.

    Contract for the purchase and sale of residential real property
means any contract or agreement in which one party agrees to purchase an
interest in real property 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
persons.

    EPA means the Environmental Protection Agency.

    Evaluation means a risk assessment and/or inspection.

    Foreclosure means any of the various methods, statutory or
otherwise, known in different jurisdictions, of enforcing payment of a
debt, by the taking and selling of real property.

    Housing for the elderly means retirement communities or similar
types 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 the U.S. Department of Housing and Urban Development.

    Inspection 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.

    Lead-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.

    Lead-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.

    Lead-based paint hazard means any 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 any 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 any 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 any entity that has legal title to target housing,
including but not limited to individuals, partnerships, corporations,
trusts, government agencies, housing agencies, Indian tribes, and
nonprofit organizations, except where a mortgagee holds legal title to
property 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, severity, 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 children under age 6;

    (2) Visual inspection;

    (3) Limited 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.

    Secretary means the Secretary of Housing and Urban Development.

    Seller means any 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, trusts,
government agencies, housing agencies, Indian tribes, and nonprofit
organizations. The term ``seller'' also includes:

    (1) An entity that transfers shares in a cooperatively owned
project, in return for consideration; and

    (2) An entity that transfers its interest in a leasehold, in
jurisdictions or circumstances where it is legally 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, except
housing for the elderly or persons with disabilities (unless any child
who is less than 6 years of age resides or is expected to reside in such
housing) or any 0-bedroom dwelling.

    TSCA means the Toxic Substances Control Act, 15 U.S.C. 2601.

    0-bedroom dwelling means any 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 dwellings.

 

Sec. 745.107  Disclosure requirements for sellers and lessors.

    (a) The following activities shall be completed before the purchaser
or lessee is obligated under any 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 any evaluation or reduction activities.

    (1) The seller or lessor shall provide the purchaser or lessee with
an EPA-approved lead hazard 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 shall disclose to the purchaser or lessee
the presence of any 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 any 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) The seller or lessor shall disclose to each agent the presence
of any 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 any 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.

    (4) The seller or lessor shall provide the purchaser or lessee with
any records or reports available 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 regarding 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 any of the disclosure activities 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 any contract to purchase
target housing, 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 by so
indicating in writing.

Sec. 745.113  Certification and acknowledgment of disclosure.

    (a) Seller requirements. 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 property on
which a residential dwelling was built prior to 1978 is notified that
such property may present exposure to lead from lead-based paint that
may place young children at risk of developing lead poisoning. Lead
poisoning in young 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 property is required to provide the buyer with any
information on lead-based paint hazards from risk assessments or 

inspections in the seller's possession and notify the buyer of any known
lead-based paint hazards. A risk assessment or inspection for possible
lead-based paint hazards is recommended prior to purchase.

    (2) A statement by 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 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 any 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 by the purchaser affirming receipt of the
information 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 by the purchaser that he/she has either:

    (i) Received the opportunity to conduct the risk assessment or
inspection required by 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 the 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
certifying to the accuracy of their statements 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 especially harmful to young 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 poisoning prevention.

    (2) A statement by 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 paint hazards. The lessor shall also disclose
any 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 any 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 by 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
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.

    (6) The signatures of the lessors, agents, and lessees, certifying
to the accuracy of their statements, to the best of their knowledge,
along with the dates of signature.

    (c) Retention of Certification and Acknowledgment Information.

    (1) The seller, and any agent, shall retain a copy of the completed
attachment required under paragraph (a) of this section for no less than
3 years from the completion date of the sale. The lessor, and any agent,
shall retain a copy of the completed attachment or lease contract
containing the information required under paragraph (b) of this section
for no less than 3 years from the commencement of the leasing period.

    (2) This recordkeeping requirement is not intended to place any
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 purchaser 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 ensure 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 activities
required under Secs. 745.107, 745.110, and 745.113, or personally 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 liable 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) Any person who knowingly fails to comply 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) Any person who knowingly violates the provisions of this subpart
shall be jointly and severally liable to the purchaser or lessee in an
amount equal to 3 times the amount of damages incurred by such
individual.

    (d) In any 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 any
expert witness fees, if that 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. 745.115 (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 enforcing this subpart, the penalty 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 any responsibility for ensuring compliance with such State or
local requirements.



ATTACHMENT 3

Project-Based Rental Assistance

 24 CFR 35, Subpart H

TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

PART 35--LEAD-BASED PAINT POISONING PREVENTION IN CERTAIN RESIDENTIAL
STRUCTURES

 

Subpart H--Project-Based Rental Assistance

 

Sec. 35.700  Purpose and applicability.

    Source: 64 FR 50210, Sept. 15, 1999, unless otherwise noted.

    (a) This subpart H establishes procedures to eliminate as far as
practicable lead-based paint hazards in residential properties receiving
project-based assistance under a HUD program. The requirements of this
subpart apply only to the assisted dwelling units in a covered property
and any common areas servicing those dwelling units. This subpart does
not apply to housing receiving rehabilitation assistance or to public
housing, which are covered by subparts J and M of this part,
respectively.

    (b) For the purposes of competitively awarded grants under the
Housing Opportunities for Persons with AIDS Program (HOPWA), the
Supportive Housing Program (42 U.S.C. 11381-11389) and the Shelter Plus
Care Program project-based rental assistance and sponsor-based rental
assistance components (42 U.S.C. 11402-11407), the requirements of this 

subpart shall apply to grants awarded pursuant to Notices of Funding
Availability published on or after October 1, 1999. For the purposes of
formula grants awarded under the Housing Opportunities for Persons with
AIDS Program (HOPWA) (42 U.S.C. 12901 et seq.), the requirements of this
subpart shall apply to activities for which program funds are first
obligated on or after September 15, 2000.

 

Sec. 35.705  Definitions and other general requirements.

    Definitions and other general requirements that apply to this
subpart are found in subpart B of this part.

 

Sec. 35.710  Notices and pamphlet.

    (a) Notice. If evaluation or hazard reduction is undertaken, each
owner shall provide a notice to occupants in accordance with Sec.
35.125.

    (b) Lead hazard information pamphlet. The owner shall provide the
lead hazard information pamphlet in accordance with Sec. 35.130.

Sec. 35.715  Multifamily properties receiving more than $5,000 per unit.

    The requirements of this section shall apply to a multifamily
residential property that is receiving an average of more than $5,000
per assisted dwelling unit annually in project-based assistance.

    (a) Risk assessment. Each owner shall complete a risk assessment in
accordance with Sec. 35.1320(b). A risk assessment is considered
complete when the owner receives the risk assessment report. Until the
owner conducts a risk assessment as required by this section, the 

requirements of paragraph (d) of this section shall apply. After the
risk assessment has been conducted the requirements of paragraphs (b)
and (c) of this section shall apply. Each risk assessment shall be
completed no later than the following schedule or a schedule otherwise 

determined by HUD:

    (1) Risk assessments shall be completed on or before September 17,
2001, in a multifamily residential property constructed before 1960.

    (2) Risk assessments shall be completed on or before September 15,
2003, in a multifamily residential property constructed after 1959 and
before 1978.

    (b) Interim controls. Each owner shall conduct interim controls in
accordance with Sec. 35.1330 to treat the lead-based paint hazards
identified in the risk assessment. Interim controls are considered
completed when clearance is achieved in accordance with Sec. 35.1340.
Interim controls shall be completed no later than the following
schedule:

    (1) In units occupied by families with children of less than 6 years
of age and in common areas servicing those units, interim controls shall
be completed no later than 90 days after the completion of the risk
assessment. In units in which a child of less than 6 years of age moves
in after the completion of the risk assessment, interim controls shall
be completed no later than 90 days after the move-in.

    (2) In all other dwelling units, common areas, and the remaining
portions of the residential property, interim controls shall be
completed no later than 12 months after completion of the risk 

assessment for those units.

    (c) Ongoing lead-based paint maintenance and reevaluation
activities. Effective immediately after completion of the risk
assessment required in Sec. 35.715(a), the owner shall incorporate 

ongoing lead-based paint maintenance and reevaluation into the regular
building operations in accordance with Sec. 35.1355, unless all
lead-based paint has been removed. If the reevaluation identifies new
lead-based paint hazards, the owner shall conduct interim controls in
accordance with Sec. 35.1330.

    (d) Transitional requirements--(1) Effective date. The requirements
of this paragraph shall apply effective September 15, 2000, and
continuing until the applicable date specified in Sec. 35.715(a) (1) or
(2) or until the owner conducts a risk assessment, whichever is first.

    (2) Definitions and other general requirements that apply to this
paragraph are found in subpart B of this part.

    (3) Ongoing lead-based paint maintenance. The owner shall
incorporate ongoing lead-based paint maintenance activities into regular
building operations, in accordance with Sec. 35.1355(a), except that
clearance is not required.

    (4) Child with an environmental intervention blood lead level. If a
child of less than 6 years of age living in a dwelling unit covered by
this paragraph has an environmental intervention blood lead level, the
owner shall comply with the requirements of Sec. 35.730.

 

Sec. 35.720  Multifamily properties receiving up to $5,000 per unit, and
single family properties.

    Effective September 15, 2000, the requirements of this section
shall apply to a multifamily residential property that is receiving an
average of up to and including $5,000 per assisted dwelling unit
annually in project-based assistance and to a single family residential
property 

that is receiving project-based assistance through the Section 8
Moderate Rehabilitation program, the Project-Based Certificate program,
or any other HUD program providing project-based assistance.

    (a) Activities at initial and periodic inspection.--(1) Visual
assessment. During the initial and periodic inspections, an inspector
trained in visual assessment for deteriorated paint surfaces in 

accordance with procedures established by HUD shall conduct a visual
assessment of all painted surfaces in order to identify any deteriorated
paint.

    (2) Paint stabilization. The owner shall stabilize each deteriorated
paint surface in accordance with Sec. 35.1330(a) and Sec. 35.1330(b)
before occupancy of a vacant dwelling unit or, where a unit is occupied,
within 30 days of notification of the results of the visual assessment.
Paint stabilization is considered complete when clearance is achieved in
accordance with Sec. 35.1340.

    (3) Notice. The owner shall provide a notice to occupants in
accordance with Secs. 35.125(b) (1) and (c) describing the results of
the clearance examination.

    (b) Ongoing lead-based paint maintenance activities. The owner shall
incorporate ongoing lead-based paint maintenance activities into regular
building operations in accordance with Sec. 35.1355(a), unless all
lead-based paint has been removed.

    (c) Child with an environmental intervention blood lead level. If a
child of less than 6 years of age living in a dwelling unit covered by
this section has an environmental intervention blood 

lead level, the owner shall comply with the requirements of Sec. 35.730.

Sec. 35.725  Section 8 Rent adjustments.

    HUD may, subject to the availability of appropriations for Section 8
contract amendments, on a project by project basis for projects
receiving Section 8 project-based assistance, provide adjustments to the
maximum monthly rents to cover the costs of evaluation for and reduction
of lead-based paint hazards, as defined in section 1004 of the
Residential Lead-Based Paint Hazard Reduction Act of 1992.

Sec. 35.730  Child with an environmental intervention blood lead level.

    (a) Risk assessment. Within 15 days after being notified by a public
health department or other medical health care provider that a child of
less than 6 years of age living in a dwelling unit to which this subpart
applies has been identified as having an environmental intervention
blood lead level, the owner shall complete a risk assessment of the
dwelling unit in which the child lived at the time the blood was last
sampled and of common areas servicing the dwelling unit. The risk
assessment shall be conducted in accordance with 35.1320(b) and is
considered complete when the owner receives the risk assessment report.
The requirements of this paragraph apply regardless of whether the child
is or is not still living in the unit when the owner receives the 

notification of the environmental intervention blood lead level. The
requirements of this paragraph (a) shall not apply if the owner
conducted a risk assessment of the unit and common areas servicing the
unit between the date the child's blood was last sampled and the date
when the owner received the notification of the environmental
intervention blood lead level. If a public health department has already
conducted an evaluation of the dwelling unit, the requirements of this
paragraph shall not apply.

    (b) Verification. After receiving information from a person who is
not a medical health care provider that a child of less than 6 years of
age living in a dwelling unit covered by this subpart may have an
environmental intervention blood lead level, the owner shall immediately
verify the information with the public health department or other
medical health care provider. If that department or provider verifies
that the child has an environmental intervention blood lead level, such
verification shall constitute notification, and the owner shall take the
action required in paragraphs (a) and (c) of this section.

    (c) Hazard reduction. Within 30 days after receiving the report of
the risk assessment conducted pursuant to paragraph (a) of this section
or the evaluation from the public health department, the owner shall
complete the reduction of identified lead-based paint hazards in 

accordance with Sec. 35.1325 or Sec. 35.1330. Hazard reduction is
considered complete when clearance is achieved in accordance with Sec.
35.1340 and the clearance report states that all lead-based paint
hazards identified in the risk assessment have been treated with interim
controls or abatement or the public health department certifies that the
lead-based paint hazard reduction is complete. The requirements of this
paragraph do not apply if the owner, between the date the child's blood
was last sampled and the date the owner received the notification of the
environmental intervention blood lead level, already conducted a risk
assessment of the unit and common areas servicing the unit and completed
reduction of identified lead-based paint hazards.

    (d) Notice. If evaluation or hazard reduction is undertaken, each
owner shall provide a notice to occupants in accordance with Sec.
35.125.

    (e) Reporting requirement. The owner shall report the name and
address of a child identified as having an environmental intervention
blood lead level to the public health department within 5 working days
of being so notified by any other medical health care professional.

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