How to Avoid Family Status Discrimination When Managing Lead Paint Hazards

If you’re among the many landlords with lead paint problems, you face some difficult choices.

 

This issue is dedicated to landlords of older properties built before 1978 when the federal government banned use of lead-based paint in residential buildings. The reason for the ban was recognition that children under age 6 can die or suffer life-altering brain damage or behavioral problems if they ingest or inhale even small amounts of lead. This is especially likely to happen when lead paint deteriorates and comes off in edible chips or emits breathable dusts. Since there is no safe exposure level of lead for young children, according to the U.S. Centers for Disease Control and Prevention (CDC), the only way to protect them is to prevent them from being exposed in the first place.

That’s a tricky challenge. Despite the federal ban, lead paint remains a widespread danger, especially in the Northeast, Midwest, and other regions and communities where much of the available housing was built before 1978.

If you’re among the many landlords with lead paint problems, you face some difficult choices. In addition to being morally wrong, allowing tenants’ kids to be exposed to lead exposes landlords to risk of liability, including multimillion dollar negligence lawsuits. So, you must do something to protect children from exposure. Your basic options:

• Abate or permanently remove the lead paint;
• Perform renovations, repairs, or repainting (RRP) to contain and minimize lead paint hazards;
• Install ventilation or other engineering controls to minimize the hazards; or
• Leave the lead hazards in situ—that is, in place—and take steps to ensure no children are exposed to it.

Abatement, RRP, and engineering controls can be costly and disruptive. As a result, many landlords choose the in situ option. And to prevent hazardous exposure, they refuse to lease units with lead paint in place to families with young children. Unfortunately, what may look like a compelling safety policy is actually a form of illegal discrimination.

Bottom Line: While fair housing might be the last thing on your mind when dealing with lead paint, the decisions you make in managing lead hazards can make you liable for discrimination. The objective of this month’s lesson is to make you aware of and help you navigate around these liability risks. First, we’ll explain the interplay between lead paint safety measures and fair housing laws. Next, we’ll outline seven rules for managing lead paint hazards without getting into fair housing hot water, while also showing you how to comply with lead paint disclosure laws. We’ll conclude the lesson with the COACH’s Quiz enabling you to apply the material to real-life situations and determine how well you’ve learned it.

DEEP DIVE

Prevalence of Lead Hazards in U.S. Housing

According to an American Healthy Home Surveys from 2021:

• 34.6 million homes in the U.S. (29.4% of all housing units) contain at least some lead-based paint;
• 18.2 million homes (15.4%) have lead-based paint that has significantly deteriorated;
• 21.9 million homes (18.6%) have lead dust hazards; and
• 2.4 million homes (2.0%) have soil contaminated with lead.

WHAT THE LAW SAYS

There are actually three sets of laws landlords need to know about to manage lead paint hazards without engaging in fair housing discrimination.

The Federal Fair Housing Act. Section 3604(b) of the federal Fair Housing Act (FHA) bans discrimination “against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of” family status, which includes families with a child under age 18 and women who are pregnant (which, for simplicity’s sake, we’ll refer to collectively as “families”).

Title X and the EPA Lead Disclosure Rule. Four years after adding family status to the list of protected classes under the FHA, Congress passed legislation called the Residential Lead-Based Paint Hazard Reduction Act of 1992 to protect families from exposure to lead from paint, dust, and soil. Section 1018 of the law, a.k.a. Title X, ordered the U.S. Department of Housing and Urban Development (HUD) and the Environment Protection Agency (EPA) to implement regulations (now called the Lead Disclosure Rule) requiring owners to disclose known information on lead-based paint and lead-based paint hazards before selling or leasing housing built before 1978.

State and Municipal Residential Lead Paint Hazard Laws. While not required by Title X, many states and municipalities have passed laws requiring owners of non-federally assisted pre-1978 housing to abate lead hazards before selling or leasing the property to families. For example, the Massachusetts “Lead Law” mandates that any residential property built before 1978 in which a child under 6 years of age or a pregnant woman resides must be lead safe. If there’s lead in such a unit, the property owner must abate it at its own expense.

DEEP DIVE

Lead Abatement Required for Federally Assisted Housing

Unlike owners of conventional housing, Title X mandates that owners of federally assisted housing take active measures to abate lead paint hazards. Requirements vary depending on the nature of the work and the dollar amount of federal investment in the property. Basic rules:

• Projects receiving more than $25,000 in federal rehab assistance must hire a certified abatement contractor to carry out lead paint abatement work;
• Projects receiving $25,000 or less in federal rehab assistance: Activities intended to permanently eliminate lead paint hazards, as documented in regulation, project specifications, cost allocation documents, or court or agency orders, are considered abatement and require the use of certified abatement contractors. Weatherization and rehabilitation activities don’t automatically count as abatement.

FOLLOW 7 RULES TO ENSURE COMPLIANCE

For owners of pre-1978 housing, it may feel like a terrible dilemma. If you do lease to families, you risk liability for exposing their children to lead hazards. But if you don’t lease to families, you run the risk of liability for family status discrimination. The good news is that you can escape the dilemma by following these seven rules.   

Rule 1: Don’t Exclude Families to Protect Their Children

The decision to deliberately deny housing to families with young children violates the FHA even if the only reason you make it is to protect the child’s health and safety. Of course, excluding families may also be a way for landlords to avoid the costs of abatement. The important thing to understand is that not letting families rent units where lead-based paint hazards haven’t been abated or controlled is illegal regardless of your motives.

According to guidance issued by HUD (HUD Guidance) back in 2000, “if a unit which has not undergone lead hazard control treatments is available and the family chooses to live in the unit, the housing provider must advise the family of the condition of the unit, but may not decline to allow the family to occupy the unit because the family has children.” Simply seeking to discourage the family from renting the unit is enough to get you into trouble, as we’ll see later.

Example: The U.S. Department of Justice (DOJ) sued a Massachusetts landlord for refusing to rent an apartment to a family with children under 6 years old because the unit didn’t have a lead certificate required for occupancy by children under the state’s “Lead Law.” The lease also allegedly included an addendum banning prospective renters from renting units if they had minor children, were pregnant, or became pregnant. The fact that the landlord countersued the family that complained for $1 million probably didn’t sit well with the jury, which found the landlord liable and awarded damages of $43,500. The landlord appealed but to no avail [United States v. DeRaffele (D. Mass.)].

Bottom Line: If a family is made fully aware of the lead paint risks but wants to lease the apartment anyway, you have no real choice but to abate the lead rather than allow them to be exposed with no protection. This is true even if abatement isn’t expressly required by federal, state, or local law. “It’s hard to imagine any situation where it would be morally or legally acceptable to simply allow a family with young children to assume the risks of lead poisoning,” notes a New York attorney who asked to remain nameless.  

Rule 2: Don’t Evict Families Because Their Unit Contains Lead

Lead paint hazards may become apparent only after a tenant has already moved into a unit—either because the hazards were previously unknown or, more likely, because the woman living in the apartment where lead hazards were known to exist becomes pregnant. In either case, seeking to evict the tenant for the child’s safety would constitute illegal discrimination. However, the HUD Guidance says that it would be okay to “offer transfers, with or without incentives, to a family residing in a unit where lead-based paint hazards have not been controlled to enable the family to move to a unit where lead-based paint hazards have been controlled, including for the purpose of addressing hazards in the family’s current unit.”

Rule 3: Directing Families to De-Leaded Units Isn’t Illegal Steering

Lead paint contamination may be property-wide or limited to only certain units. If some of your units are de-leaded and others contain lead, you’d naturally want to steer families to the former. But trying to influence families to lease units that you believe would be safer for their children could make you liable for engaging in the discriminatory practice known as steering.

Explanation: Steering occurs when a landlord tries to influence a rental prospect’s or tenant’s choice in housing based on their protected characteristics. Steering is illegal because it limits personal choices and denies people the opportunity to lease the housing they choose. Practiced on a continuing basis, steering also perpetuates segregation across apartment communities, neighborhoods, towns, cities, and wider communities.

While trying to get families to lease de-leaded units is clearly steering, HUD says it’s not illegal. According to the HUD Guidance, “a housing provider may recommend a unit where lead-based paint hazards have been controlled to families with children under the age of six—or inform the family of the availability of a waiting list for units where lead-based paint hazards have been controlled.” Landlords may also notify families verbally or through advertising that such units are available or that a waiting list exists.

You can even take things a step further by giving families first dibs on available de-leaded units or reserving those units for families. Caveat: The reserved de-leaded units must be at least as desirable as the non-reserved units in other ways. You can still be liable for discrimination if the units you reserve for families are inferior in location, size, configuration, etc.

In addition, HUD says that if you can de-lead only some of your units, you’re allowed to make it a priority to de-lead those in which families reside. HUD also recommends scattering the de-leaded units throughout the building rather than segregating them all in one area and creating a de facto ghetto for families with young children.  

Rule 4: Directing Families Away from Leaded Units Is Illegal Steering

While steering families toward de-leaded units is permissible, steering them away from leaded ones is not. Explanation: Section 3604(c) of the FHA makes it illegal to “make, print, or publish…any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on…familial status.” Accordingly, you can’t post ads or make statements noting that units are unsuitable or unavailable to families because they contain lead paint.

Example: A Massachusetts landlord and property manager were ordered to pay $28,000 in civil penalties and $10,000 in attorney’s fees for posting an ad on Craigslist indicating that an “apartment is not de-leaded, therefore, it cannot be rented to families with children under six years old” [Source: Massachusetts Attorney General’s Office].

Rule 5: Don’t Fail to Tell Families About Vacancies Because the Unit Contains Lead

One way landlords can avoid abatement costs is to ensure that families don’t find out about the availability of apartments containing lead. But deliberately not telling prospects about a vacancy because they have or may have young children vulnerable to lead poisoning is a clear form of family status discrimination.

Example: A landlord and rental agency from, you guessed it, Massachusetts, was hit with a $9,000 penalty for denying apartments containing lead to families. Among other things, they offered unadvertised but available apartments to testers without children but failed to mention that these units were available to testers who did have young children [United States v. Sawicki (D. Mass.)].    

Rule 6: Don’t Deny Young Children Access to Common Areas Containing Lead

In addition to individual apartments, there may be lead paint in hallways, meeting rooms, club houses, or other common areas. It’s not acceptable to ban young children from entering these areas even if the sole intent of the rule is to protect the child’s health and safety. “Trying to keep young kids out of areas containing lead is no more legal as a safety rule than banning children from using a community pool because there’s no lifeguard on duty,” notes the New York attorney.

Rule 7: You Must Comply with the EPA Lead Disclosure Rule

In addition to discrimination rules, you must comply with Title X, which requires landlords to disclose to a rental prospect any lead-based paint in the construction or decorations of a building built before 1978. Specifically, under the EPA Lead Disclosure rule, before the prospect signs the lease, the landlord must:

• Give the prospect an EPA-approved pamphlet called “Protect Your Family From Lead In Your Home” that explains what prospects must do to guard against lead hazards in the unit;
• Disclose any known information about the lead paint or hazards such as their location and the condition of painted surfaces; and
• Provide any records and reports on lead paint and hazards for not only the unit but also other units and common areas, where the landlord has acquired such information as a result of a building-wide evaluation.

In addition to these disclosure obligations, there’s certain information you must include in the lease, either in the body of the agreement or as a separate attachment—namely, a Lead Warning Statement and confirmation that you’ve complied with all notification requirements. The attachment or incorporated lease language must be in the same language as the rest of the lease and be signed and dated by the landlord, rental agent, and tenant. See our Model Form: Lead Disclosure Lease Attachment as an example. Landlords must retain the disclosure materials for at least three years from the date the lease begins.

Disclosure is more than a mere formality. Landlords that fail to comply with the Lead Disclosure Rule risk civil penalties of up to $16,000 per violation.  

Example: Tenants sued an Illinois landlord and 16 related companies for violating EPA disclosure rules by failing to tell them of the known risk of their homes’ containing potentially hazardous levels of lead. Rather than risk a trial, the defendants agreed to shell out roughly $2.3 million for lead abatement work to settle the claims involving 463 housing units in 22 properties in the Chicago area, as well as pay a $125,000 civil penalty. Note: This settlement occurred in 2012 when the maximum civil penalty for a Lead Disclosure Rule violation was only $11,000 [Wilmette Real Estate & Management Company, LLC; WR Property Management, LLC; 14 affiliated limited liability companies, HUD News Release, April 9, 2012].