Known Lead Issue In NH

[Stacy Davis]

I was wondering if I could get some help. Found a 3 family property in Concord, NH. Just before we were going to put in an offer we were told there was a known lead issue from back in 1999. 

We now hesitate to put an offer in. Does anyone know how big a deal this really is? Most multi families here were built before 1978. The 3 we own were all built before 1978 but with no known lead issue on file. Of course we do give renters the speech and accompanying paperwork explaining there is no known lead issue but because the building was built before 1978 the potential is there.

Other question I have is how much it will affect rental income, potential tenants and the marketability of it if we want to sell it. 

The building is fully rented but I did notice there were no children there. These are 3 bedroom units that I had hopes would be ideal for families.

If anyone knows anything about known lead issues and the law would be valuable too. 

I really hate to lose this place as 3 and 4 families are difficult to find and they go quick when you do find one that's fairly decent.

Should I go ahead with an offer , if so, should there be contingencies ? Any help here would be appreciated.

[Derreck Wells]

Stacy, (and anyone else reading this), please, please, PLEASE, don't listen to Flavio. First, I'm going to address his statements:

"Down here landlords are advised not to rent to families with children if the house has lead paint as it's known to cause cancer if a child eats the paint." 

Landlords are not "...advised not to rent to families with children if the house has lead paint." It is illegal in MA to rent a dwelling to a family with kids if you don't have a lead certificate on file with the state. It's not advised against, it's flat out illegal and you can get fined or worse, if you do rent to a family and the child gets lead poisoning, you can lose the building to the tenant on top of the fines and civil lawsuit. Also, eating lead paint does not case cancer. Lead poisoning causes a whole host of problems, but cancer isn't one of them. 

"Worst case scenario, you would have to scrap and repaint all the wood in the house: doors, trims, etc."

I'm actually cringing reading that. Again, that would be illegal, not to mention extremely dangerous. If there has been a lead inspection and the landlord then scrapes the paint, they are performing "Unauthorized Deleading" (UD) and it's illegal and will result in large fines and the house being flagged as having UD done to it. It will never get a lead certificate that is required to rent to families. It could get a "Letter of Environmental Protection" once the work was fixed and done legally which would allow the house to be rented to families again, but it will also raise the insurance rates and lower the value of the property. Only "High Risk Deleaders" can scrape lead paint. They need a specific license and are required by the state to get regular blood tests to be sure they're not inhaling too much lead dust. 

So, I'll repeat, please don't listen to Flavio. Flavio, please stop telling people to do illegal stuff. Educate yourself on the lead laws or just don't comment on these posts. You can get someone in a lot of trouble.

Now on to your concerns Stacy. First, I want to say there should always be contingencies for inspections. You always want to leave yourself an out unless you're getting the property for pennies on the dollar and you know it's a complete rehab. and you're planning on replacing everything anyway.

Next, I want to say I'm only a licensed deleader in MA. MA has the strictest lead laws in the country and every state reciprocates with MA because of that, which is why I got my MA license. I'm familiar with all of the MA laws, I've been licensed and working in the field for 3 years, but I don't know all of the NH laws, only some of them. I'm presently looking into getting my NH license so I can work on another Bigger Pockets member's house, it looks like just have to submit the proof of my MA license. So with that being said...

A "lead issue" can be many things, it depends on your definition of issue. "Issues" could be:

• There was a lead inspection done and it came back positive for lead.
• There was an order of "lead hazard reduction" and it wasn't done.
• There was a case of lead poisoning.
• There was unauthorized deleading done on the property.

Now the reality is that if there was an inspection and it wasn't deleaded, then the only issue is that the work needs to be done. The plus is that there is a grant program based on the tenants income, so there's a good chance you won't have to pay much for the work to be done. However, the work can be expensive, depending on what needs to be done. According to the website I'll link below, the average grant available is $11,800 per unit, but the owners are required to pay 10%. I have honestly never had a unit that cost that much, but it would completely depend on the renovations that have been done previously. If all the windows are covered in lead paint, they would have to be replaced. I've seen 3 families buildings with around 50 windows. The windows alone could cost over $10,000, but if you got a grant on that same building for $35,400, you'd only pay $3,540 anyway. That's less then the cost of the replacement windows, not even including the installation labor. 

As for affecting the rental income and marketability... yes it will. Once the property is legally deleaded, your rental income can go up and marketability has been increased since it's now lead safe for families and you can advertise it as such. It's a plus, not a negative.

If there was a case of lead poisoning, then there would have been an order of lead hazard reduction.

If there was an order for lead hazard reduction, that follow the property to the new owner. The property could have been legally taken off the rental market for a time to get the family out, then re-rented. That would have to be addressed. 

So, I'd suggest yes. Put in the offer and add contingencies for inspections and finding out the cost of solving the existing "lead paint issue". It could turn into huge negotiating tool for you. Let's say the lead abatement will cost $30,000. The seller doesn't need to know that you're going to apply for a grant for that, so you can use that $30k to negotiate a better price and end up with a better deal because of the "lead issue".  If you get me a copy of the inspection report I can give you an idea of how much it should cost to delead. If you can't get an inspection report, I'd get the property inspected yourself. It should cost less then $500, but it could pay off in the end! By the time you get the property, I'll have my NH license so I could even take the project on for you. 

Let me know if you need any more help,

Derreck