I was called by a new home buyer last week seeking information on the costs of remodeling pre 1978 homes. He heard about the EPA Renovate Reapir and Painting Lead Law. He was interested in knowing what this law will do to the costs of remodeling the home he was looking at. He said the home was in a good location, decent condition and good town but needed updating. I was able to give him some information and it appears he will be offering $10,000 dollars less due to increased remodeling costs that contractors will need to figure to replace the windows, siding, and bath. I asked him what would happen if he didn't get the lower price what would he do and he said go look at another house. He said " there are plenty on the market, I am in the driver's seat."

Home buyers have a new reason (RRP costs) to beat home sellers real estate sales price down; The EPA RRP Lead Law. Last year the cost of remodeling pre 1978 homes went up due to the government enacting the EPA RRP Lead Law. This law went into effect on 4/22/2010.

The law requires that any contractor who wants to offer to work or work on pre 1978 homes for compensation that they must be Certified Renovators and Certified Firms. Then if they disturb painted surfaces in the amount of 6 square feet per room on the interior or 20 square feet on the exterior they must use costly RRP practices. Contractors who violate this law face a fine of $37,500 per violation per day. In addition the address becomes the site of and EPA infraction. The enforcement may cause the contractor to go out of business laeving the project unfinished.

Increased remodeling costs on pre 1978 properties

The increased costs of using these practices vary. For example on a bathroom remodeling project it will add over $1000.00 to the project. On replacement windows contractors are telling us their costs are going up between $50.00 and $100.00 per window. Exterior painting firms tell us the costs are an additional 20 to 30%. Remodeling firms are telling us they are seeing additional costs of 10-15%. Handyman firms are telling us that the costs can be as high as 50% on small projects.

Astute homebuyers are doing their homework and are learning that when buying an pre 1978 home, the future costs of renovations will be very costly. If a property is outdated new homebuyers are looking at the projects they would want to do in the near future. Many homeowners will start looking at homes built before 1978 as white elephants. This information is factored in when making an offer on these older properties.

This is nother major blow to the ailing real estate market. Homes that do not have lead will be far more valuable going forward. With a large inventory and millions of homes heading toward foreclosures this does not bode well for people looking to sell their homes at a reasonable price. It will also affect realtors, less commission, more time listing the homes and more showings.

Please spread the word to anyone you know looking to buy a home. This may help someone you care about get a lower price while interest rates are low and inventories are high.

One more thing, if your real estate agent tells you not to worry about the law, we suggest you check it out for yourself. Enforcement is beginning and contractors are going to be forced to comply and remodeling prices will go up.

mark the coach

"one voice for the residential construction industry"

The EPA Renovation, Repair and Painting Law (RRP) will lead to a decline in Real Estate values on homes built before 1978.

You may have heard by now that any work on pre 1978 properties in America requires the use of lead safe practices under the EPA RRP Lead Rule. This regulation has lead to increased costs for legally operating contracting businesses. These costs are specific to homes built before 1978. Renovation on newer homes do not require these practices and costs.

Some background on the law

Any contractor who wishes to offer to work or work on pre 1978 homes must be Certified with the EPA and must be trained in the 8 hour EPA Initial Renovator curriculum. Contractors who fail to become compliant can be fined up to $37,500 per violation per day.

The EPA was suppose to educate the consumer but to date they have not done enough. Contractors throughout America report that most homeowners have little or no knowledge of this law.

The huge risk for homeowners is if they hire a contractor who is operating illegally they face the possibility of having the job shut down. Many contractors have been trained however there are thousands who have chosen not to become compliant. There are some parts of the country where contractors are not aware but that gap is being closed.

Contractors who use lead safe practices will in most cases be higher in cost than those who operate illegally. There are prescriptive practices that are mandated by the EPA that need to be included in the direct cost of the job. Some of these costs are for labor, documentation, increased insurance coverage and additional material and equipment to comply with the law.

Consumers looking to purchase a home built before 1978 are starting to figure the cost of renovating these homes with EPA RRP compliant work practices. Ultimately renovation costs on pre 1978 homes will be higher than those built after 1978. It will not be long before banks start figuring these costs into the value of a home and reduce the amount of money that they will allow in the loan to value evaluation. 

In essence, homes built before 1978 are now our most valuable declining asset! Coupled with the foreclosure debacle we are far away from seeing the bottom of the decline of real estate values.

Consumers looking to buy homes are getting smarter on negotiating the price of listed homes down. The government through the EPA RRP Lead Law has given them another tool to drive a hard bargain.

I predict the next hit Real Estate Values are about to take will come from new bank procedures leading to lower appraisal values of pre 1978 homes.

After banks get in on the game the insurance industry will start charging higher premiums to cover issues caused by lead and the EPA RRP Lead Rule.

For more information on this law we help homeowners and also can help you find a legal contractor who is compliant.

mark paskell

Homeowners who hire contractors not in compliance with EPA RRP Lead Rule  and OSHA regulations are taking a huge risk.

In April of 2010, the EPA RRP Lead Law went into effect. Any contractor who works on pre 1978 homes must be trained and certified by the EPA. In some states (Massachusetts) the EPA has granted authority to enforce and administer the law. Now eight months later, any contractor caught working illegally on a pre 1978 home can be fined up to $37,500 per violation per day. Homeowners should be very concerned about hiring a non-compliant contractor. One reason is that the contractor could be generating lead dust that may lead to lead poisoning for the homeowner and their family. In addition, the homeowner may find themselves with a job shut down by EPA inspection officials. This can happen several ways;

• The local EPA, building inspector or health officials may notice illegal work activity and stop by to enforce.
• A local compliant contractor who is certified by the EPA, may notice that a job is being done illegally and they call the EPA and report the job. The EPA must investigate any reliable reports.
• A concerned neighbor may call the Lead hot line and report the contractor.

If you have a contractor who does not have plastic down and they are using prohibited practices your job can be shut down! Then what will you do if the contractor is caught and won't come back due to stop work order from the EPA or local building officials?

On the OSHA front, OSHA headquarters has added the residential industry to its targeted industry enforcement list.

I met with OSHA and Mass DOS officials last September and found out the following news;

In New England new OSHA inspectors have been added to the enforcement team. They have been instructed by OSHA leaders to stop by any residential job with activity and see what is going on. The new OSHA Penalty structure that came out last fall is to penalize and fine first, educate later.

If your contractor is not following OSHA required practices your job can be shut down immediately. What will happen then?

The EPA and OSHA are suggesting that contractors and homeowners use anonymous hot lines to report illegally operating contractors who are not following thew rules.

EPA Lead Hotline

Legally operating contractors who have invested in EPA RRP Training and OSHA compliance are not in favor of ratting out the illegal contractor. They tell me they believe it is government's responsibility to maintain a level playing field through enforcement. However I know a few who are sick and tired of losing jobs to contractors who break the rules. The illegally operating contractors include the local handyman, moonlighting fireman and teachers, laid off workers, and the undocumented.

A good way to protect yourself is always make sure your contractor provides proof of credentials and then verify them with the authorities. Don't ever assume they are valid unless you confirm on line or by speaking to the regulating agencies. For example if they say they are EPA certified go to the EPA website and see for yourself.

In Mass the Division of Occupational Safety is in charge of the Mass RRP Lead Law. To verify a contractors Mass lead license click here. If they say they are insured make sure you call the agent and confirm that the premiums have been paid and the coverage is in effect for the stated date. We cannot afford to trust a pretty face or take someone's word anymore without also being prudent. 

Follow Ronald Reagan's lead. In the 80's he wanted to trust Gorbachev but insisted that it was necessary to be prudent and send in inspectors to verify that Russia dismantled its nukes. He said we must check and verify, I owe it to the America people.

Homeowners owe it to themselves to be prudent to protect their most valuable asset, their home. Be prudent and check out your contractor thoroughly. The EPA and OSHA only care about protecting consumers and workers and they will shut down any job that is being done unsafely by a non-complaint contractor. Many times this contractor will be the lowest price! You always get what you pay for.

mark paskell 

We help homeowners with questions about hiring legal contractors.