Failure to Properly Present Lead Paint Form Can Pose Significant Liability for Agents
The GBAR Brokerage Counseling Hotline receives questions and complaints regarding the Property Lead Paint Notification form on a daily basis. For the record, the form must be provided by the seller and real estate agents to prospective buyers on a house built before 1978, and executed by the buyer prior to entering into a binding contract. In Massachusetts, the binding contract is the Offer.
Under federal law, if the seller and/or real estate agent do not provide it to the prospective buyer prior to the point an offer has been formulated and signed by the buyer and presented to the seller for execution, you have already violated the federal law. Assuming that the home was built before 1978, you must inform the seller that they are legally obligated to complete the form and disclose any reports they may have regarding the presence of lead paint. Failure to meet these requirements is a violation of state and federal law and can result in significant penalties. In fact, the Property Lead Paint Notification form states, in paragraph 3 on the first page:
“Sellers and real estate agents who do not meet these requirements can face a civil penalty of up to $1,000 under state law; a civil penalty of up to $10,000 and possible criminal sanctions under federal law, as well as liability for resulting damages. In addition, a real estate agent who fails to meet these requirements may be liable under the Massachusetts Consumer Protection Act.”
As a real estate licensee, it is your obligation to inform the seller of their obligation to execute the form when the property goes on the market, and it is your obligation to provide it to all prospective buyers for review as a buyer formulates an offer. As a listing agent, MLS has provided you a simple process to attach it to your listing information for buyer’s agents to download and provide it to their prospective buyers. If a seller does not provide the form to you as the listing agent, no valid offers can be presented to the seller until the buyer making an offer has been given the opportunity to review and execute the form.
If you act as a buyer’s agent, you want to make a detailed paper trail of your attempts at obtain the executed form for your buyers to review to protect yourself from liability. If it is not immediately forthcoming, talk to your broker-owner about making offers "subject to the lead paint disclosure" and consider reporting the agent’s refusal to provide the form to the appropriate law enforcement agency.
The Greater Boston Real Estate Board has been approached by several law enforcement agencies to discuss issues that affect the real estate industry and ways to make the process better and safer for the consumer. The wide spread practice of not providing the form by listing agents in a timely fashion to prospective buyers may fast become the focus of investigations by law enforcement for violations under the lead disclosure laws. Do you want to be the test case?