HUD Handbook 4350.3 § 6-8

A.       Applicability

                The Disclosure Rule [40 CFR part 745, subpart F and 24 CFR part 35,
                subpart A – Requirements for Disclosure of Known Lead-Based Paint and/or
                Lead-Based Paint Hazards in Housing], published March 6, 1996, specifies the
                types of information that owners must give to applicants prior to signing their
                leases. These requirements apply to all properties built prior to January 1, 1978,
                including cooperatives, with certain exemptions established by regulation.
                *Figure 6-5* lists specific exemptions when the disclosure rule does not apply. If
                a property is exempt, the owner does not need to comply with the requirements
                discussed in this paragraph.

                             *Figure 6-5*: Disclosure Rule Exemptions

Residential structures built after January 1, 1978, are exempt from lead-based
             paint requirements because Congress banned the use of lead-based paint for
             residences after this date.
             Rental property found to be lead-based paint free by a lead-based paint
             inspector certified under the federal certification program or under a federally
             accredited State or Tribal certification program is exempt.
             Zero-room dwelling units, including single room occupancy (SRO) units, are
             exempt.
             Housing specifically designated for the elderly or persons with disabilities is
             exempt, unless a child under age 6 resides or is expected to reside in the unit.

             Short-term leases of 100 days or less when no lease renewal or extension can
             occur.

B.       Overview

                 1.      For properties where the requirements apply, both owners and tenants
                         need to be aware of lead-based paint hazards, such as paint chips, paint
                         dust in units, and contaminated soil in common areas. Lead-based paint
                         is dangerous to adults and children, but especially to children under age
                         6. Units that are older, are in poor physical condition, have been
                         renovated unsafely, or have exterior lead-contaminated soil are at the
                         most risk. Nevertheless, owners in all applicable properties must provide
                         tenants with basic information on lead-based paint and its hazards, and
                         they must maintain an accurate record of this communication.
                         Compliance with these regulations is also crucial in order to reduce
                         liability and avoid lawsuits, obtain more favorable insurance premiums,
                         and avoid penalties for failing to meet government requirements.

                 2.      This paragraph on lead-based paint focuses on the owners’ requirements
                         during the leasing process. Lead-based paint requirements that must be

met during the life of the property are discussed in Handbook 4350.1,
                         Multifamily Asset Management and Project Servicing or other current
                         Notices. These requirements include:

                         a.      Visual assessments to identify deteriorated paint or (for assistance
                                 over $5,000 per unit annually) risk assessments to identify lead-
                                 based paint hazards;

                         b.      Paint stabilization or (for assistance over $5,000 per unit annually)
                                 interim controls with clearance testing when appropriate;

                         c.      Ongoing paint maintenance and (for assistance over $5,000 per
                                 unit annually) re-evaluation every two years to identify hazards;

                         d.      Notification of tenants about the actions above; and

                         e.      Special actions when a child under six years old is reported to
                                 have high blood lead levels.

                         REMEMBER: Compliance with fair housing requirements applies when
                         complying with the lead-based paint regulations. Owners may not refuse
                         to rent to households with children to avoid triggering lead paint
                         requirements, because this would constitute discrimination based on
                         familial status.

                3.       Owners may affirmatively market the following types of units to families
                         with children under age six:

                         a.      Units that are built after January 1, 1978; and

                         b.      Units that are built prior to January 1, 1978 and found to be free of
                                 lead hazards.

                4.       Owners must disclose known lead-based paint and/or lead-based paint
                         hazards in the property and provide the EPA/HUD/Consumer Product
                         Safety Commission (CPSC) Lead Hazard Information Pamphlet (Protect
                         Your Family from Lead In Your Home) to tenants when leases are
                         renewed, modified, or renegotiated, unless no new information on those
                         subjects has come into the possession of the owner and the owner has
                         already provided the tenants with the disclosure information and the
                         pamphlet. This is in accordance with 24 CFR 35.82(d), in the Lead
                         Disclosure Rule.

        C.      Disclosure Rule Requirements

                1.       Prior to leasing, owners must provide the tenant with two items:

                         a.      Lead Hazard Information Pamphlet. Owners must provide tenants
                                 of a residential property with the EPA/HUD/Consumer Product
                                 Safety Commission (CPSC) Lead Hazard Information Pamphlet

(Protect Your Family from Lead In Your Home), or an EPA-
                                 approved equivalent. Owners are required to document that the
                                 tenant was given a copy of the pamphlet before signing the lease.

                                  NOTE: The Lead Hazard Information Pamphlet distributed to
                                  meet the Disclosure Rule requirement is the same pamphlet
                                  distributed for other lead-based paint requirements (e.g., the
                                  Lead-Based Paint Pre-Renovation Education Rule). It does not
                                  have to be distributed twice, so long as you can document that it
                                  has been provided.

                         b.      Disclosure form. Owners must include the disclosure form in the
                                 lease packet and obtain the prospective tenant's signature before
                                 he or she signs the lease. (Exhibit 6-3 contains a copy of the
                                 Disclosure Form.) The disclosure form is designed to document
                                 receipt of the Lead Hazard Information Pamphlet and to meet
                                 three disclosure requirements, as follows:

                                 (1)      Disclose the presence of known lead-based paint/hazards.
                                          Owners of target housing must disclose the presence of
                                          known lead-based paint and/or lead-based paint hazards.
                                          The disclosure form has a line for owners to mark to verify
                                          that lead-based paint/hazards have been disclosed.

                                 (2)      Disclose information on lead-based paint/hazards. Owners
                                          must provide applicants with any available records or
                                          reports pertaining to the presence of lead-based paint
                                          and/or lead-based paint hazards. Owners must provide
                                          applicants with procedures to obtain access to any
                                          available records or reports pertaining to the presence of
                                          lead-based paint and/or lead-based paint hazards. The
                                          disclosure form has a line for owners to mark to verify that
                                          copies of all relevant records and reports have been
                                          provided to the applicant. The form also documents if
                                          there are no records or reports available.

                                 (3)      Include contract language. Leasing contracts must include
                                          a Lead Warning Statement and an acknowledgment
                                          section to be signed by the prospective tenant, the owner
                                          and any agent. The owner must present the disclosure
                                          form signed by the owner and the Lead Hazard Information
                                          Pamphlet to the prospective tenant before the tenant signs
                                          the lease. The disclosure form has the Lead Warning
                                          Statement printed at the top and a place at the bottom for
                                          the applicant to sign acknowledging disclosure and receipt
                                          of the Lead Hazard Information Pamphlet.

                                 (4)      Recommended practice. The tenant briefing is an ideal
                                          time to provide applicants with the Lead Hazard
                                          Information Pamphlet and to give them the opportunity to

review the Disclosure Form. (See paragraph 6-27 Briefing
                                          with New Tenants.)

D.      Record-Keeping Requirements

                There are specific records that owners must keep to verify their compliance with
                the Disclosure Rule requirements.

                1.       Disclosure form. Owners must keep records of the Disclosure Form
                         provided to each tenant for three years from the commencement of the
                         leasing period.

                2.       Lead Hazard Information Pamphlet. A record of the distribution of the
                         Lead Hazard Information Pamphlet is required under the HUD-EPA
                         Disclosure Rule and the EPA Lead Pre-Renovation Education Rule. A
                         record is not required under the new HUD regulation, but it is
                         recommended.