Purchasing property with uncertain lead status

[Tinah Canda]

Hi BP community, my name is Tinah - a brand new real estate investor and I am in a bit of pickle - need guidance.

I signed a P&S agreement on a property and later realized that by law the lead disclosure on lease did not cover the infant living in the unit. No child under six is allowed to live in apartment without deleading certificate.

Discussed this with my realtor and lawyer, both downplayed the potential hazard and legal liability of possible lead in the property. Both are of the opinion that I have buyer's remorse.

Unsure how to proceed - should I cut my losses now or proceed with transaction and delead after closing and set up an LLC?

Don't know if I should trust my realtor and lawyer.

Would appreciate your experience and knowledge. Thank you.

[Derreck Wells]

Your landlord and agent are wrong and I would honestly fire them both. The liability for that tenant will be yours if you close. The law states that you have 90 days after closing to delead a building to avoid the liability of past tenants (not just the current one). MA is cracking down and going after owners hard on this. They want every rental in the State deleaded. 

You can get a lead inspection (I recommend Anderson Lead Inspections at www.andersonlead.com) and use that to get an estimate on deleading the building. Then use that estimate to get the seller to pay for the deleading. You can reduce the offer by half of the cost of the deleading AND have the seller give you a concession for the other half. That way you both pay half of the deleading, but because the seller came to the table with a check for half, you would use that check to pay your half and essentially you're paying your half with money that was included in the mortgage. 

The half you took off the price of the house was the seller's half. The seller's concession is basically a legal way that your bank finances repairs as well as the mortgage (the bank pays the seller, but the seller gives you the money back for the repair). If you took the total cost of the deleading off the offer and the seller paid it all out of his profits, then you actually have to come out of pocket with the cash to pay for it. With the 50/50 split, at least you're financing your half and essentially the tenant is paying for it with the mortgage paydown.

Good luck on your purchase!

Derreck