Lead-Based Paint in Residential Housing

Lead-poisoning has been identified as the No. 1 environmental threat to children in the United States. There are many potential sources of lead in the environment, but the most common source of lead exposure for children is lead-based paint in older residential housing. Owners and managers of pre-1978 housing face significant legal liability presented by the presence of lead-based paint in their properties.

Our qualified insurance defense attorneys have extensive experience in the developing field of lead-based paint law, including the defense of claims, the counseling of landlords to achieve compliance with relevant regulations, and the abatement of lead-based paint hazards. Lead-based paint represents a hot enforcement target for federal, state, and local authorities, as well as a potentially lucrative new market for private lawsuits by the plaintiffs’ bar. Lead-based paint enforcement and litigation is national in scope and should be of concern to real estate owners, investors, and managers wherever their properties are located. We believe many passive owners, including syndicated investors and REITs, are unaware of the large potential liabilities presented by lead-based paint, which typically cannot be insured and can be difficult to avoid under private indemnification agreements.

On behalf of a large urban property manager, Our qualified attorneys recently concluded the largest settlement to date under the federal Residential Lead-Based Paint Hazards Reduction Act of 1992 and its implementing regulations. This federal law imposes civil and possibly criminal penalties, and creates a private right of action with triple damages awarded to the plaintiff, for failure to properly disclose and document the known presence of lead-based paint and/or lead-based paint hazards in connection with a residential lease or sales transaction. Federal authorities, working with state and local governments, have made aggressive use of this law to require the costly abatement of lead-based paint in older residential properties. The case we recently settled involved a joint enforcement by six government agencies (the U.S. Department of Justice, the U.S. Department of Housing and Urban Development, and the U.S. Environmental Protection Agency, the Illinois Attorney General’s Office, the Cook County State’s Attorney’s Office, and the City of Chicago) and an initial demand for relief in excess of $10 million. Under the proposed settlement, the out-of-pocket payment from our client should be less than 1% of that amount. In contrast, federal authorities have filed suit against other similarly situated urban management companies, seeking potentially millions of dollars in penalties and other relief, and in one case seeking the clean up of dozens of properties directly against a management company’s building owners.