All Forum Posts by: Derreck Wells

Hi Jon, I won't be able to make the meeting tonight, but can you add me to the email list. I can surely pop in on the zoom meetings. 

Thanks,

Derreck

Hi Victor,

I just wanted to drop you a note on the new lead paint laws in MA. They now only give you 90 days to delead when you buy a rental. If you don't delead within 90 days, you can be held liable for any lead poisonings that have ever happened at the building, even if it was before you owned it. They basically hold the building liable rather than the owner and that liability transfers from owner to owner until someone deleads it and breaks the chain. If you delead, and maintain the standard, you will be in the clear.

Here's the law (emphasis added by me):
460.100: Duty of Owner(s) of Residential Premises
(B) Whenever any residential premises containing dangerous levels of lead in paint, plaster or other accessible structural material undergoes a change of ownership and as a result a child younger than six years old will become or will continue to be a resident therein, the new owner shall have 90 days after becoming the owner to obtain a Letter of Full Compliance or a Letter of Interim Control, except that if a child younger than six years old who is lead poisoned resides therein, the owner shall not be eligible for interim control, unless the Director grants a waiver pursuant to 105 CMR 460.100(A)(3).

Note it says "a child younger than six years old will become ... a resident therein...". It is assumed by the state that any rental larger than a 1 bedroom will fall into this category at some point because of the anti-discrimination laws that prevent landlords from refusing a family because they have a child. The law specifically excludes rentals under 250 square feet. Basically this is their way of getting all rentals lead safe. If you don't delead, you will be putting yourself in a dangerous position.

This isn't a bad thing! You can use this knowledge in your negotiations. Assume $5k per unit and count the exterior as a unit. So a 3 family is 4 units = $20k for your negotiations. They rarely cost that much, they're usually half that, but if the property needs windows and exterior doors, it can get expensive. Like I said though, most come in about half that, so use $5k to negotiate and even if you get a 50% concession you could still potentially get it all paid for by the seller.

I can run any addresses through the database for you and see if they've been inspected or deleaded for you. Right now they’re behind on updating it though, so it may have been inspected and I just can’t see it yet. Sometimes they get inspected but not deleaded and this creates a whole other set of problems. If that's the case, you can't do any renovations until you have it professionally deleaded or it would be flagged for Unauthorized Deleading and you can get fined and the property would never be able to get a Lead Certificate, only a letter of Environmental Protection that states you did illegal work, got caught, then had to pay a professional to clean up the mess. You don't want that.

If you don't already have a lead inspector you like to use, I recommend Anderson Lead Inspections, www.andersonlead.com. No, I don't get a referral fee or anything, I just know he's fair and works to help owners.

Let me know if you need any help or have any questions.

Good luck on your investing!

Derreck

Hi Pat.

The law now states you have 90 days to delead from the time of closing to avoid the liability of past tenants... yes, you are responsible for tenants that lived there before you even bought the place. The liability stays with the building now until a landlord deleads it. it's MA's way of getting people to do it. But that's not a bad thing, you can use this in your negotiations when buying a property.

There is a database in the state that shows if there's been a lead inspection, but right now they're about a year behind in updating it, so if the property has been inspected in the last year, it probably won't show up. The trouble is that if it was ever inspected and wasn't deleaded, you can't do any rehab work until it is deleaded or you'll get flagged for Unauthorized Deleading (UD) and you'll never get a lead cert on the property. You'd still be able to get a Letter of Environmental Protection to rent to families, but it basically says that you did illegal work, got caught, then had to hire a professional to fix it. So you can check the database and if it doesn't show as being deleaded, assume it will need to be and use that in your negotiations. 

Step one is a lead inspection. I strongly recommend Anderson Lead Inspections as he works with the owners to help them rather then trying to find reasons to come back and bill them again. 

Then you find a licensed deleader and give them a copy of the report so they can estimate the project. I can delead most buildings for about $2500 per unit, counting the outside as a unit. So a three family is usually around $10k, however, I'm less expensive than most so if you're negotiating a purchase double that number to $5k per unit. They can get expensive if the windows are all covered in lead paint and need to be replaced. Sometimes the exterior doors are too, and those can be expensive on these old houses, many have sidelights or transom windows above them that drive up the cost.

Let me know if you have any other questions, I'll do my best to answer them.

Derreck

@Daniel Consalvo

I just wanted to drop you a note on the new lead paint laws in MA. They now only give you 90 days to delead when you buy a rental. If you don't delead within 90 days, you can be held liable for any lead poisonings that have ever happened at the building, even if it was before you owned it. They basically hold the building liable rather than the owner and that liability transfers from owner to owner until someone deleads it and breaks the chain. If you delead, and maintain the standard, you will be in the clear.

Here's the law (emphasis added by me):
460.100: Duty of Owner(s) of Residential Premises
(B) Whenever any residential premises containing dangerous levels of lead in paint, plaster or other accessible structural material undergoes a change of ownership and as a result a child younger than six years old will become or will continue to be a resident therein, the new owner shall have 90 days after becoming the owner to obtain a Letter of Full Compliance or a Letter of Interim Control, except that if a child younger than six years old who is lead poisoned resides therein, the owner shall not be eligible for interim control, unless the Director grants a waiver pursuant to 105 CMR 460.100(A)(3).

Note it says "a child younger than six years old WILL BECOME ... a resident therein...". It is assumed by the state that any rental larger than a 1 bedroom will fall into this category at some point because of the anti-discrimination laws that prevent landlords from refusing a family because they have a child. The law specifically excludes rentals under 250 square feet. Basically this is their way of getting all rentals lead safe. If you don't delead, you will be putting yourself in a dangerous position.

This isn't a bad thing! You can use this knowledge in your negotiations. Assume $5k per unit and count the exterior as a unit. So your 4 family is 5 units = $25k for your negotiations. They rarely cost that much, they're usually half that, but if the property needs windows and exterior doors, it can get expensive. Like I said though, most come in about half that, so use $5k to negotiate and even if you get a 50% concession you could still potentially get it all paid for my the seller.

I can run any addresses through the database for you and see if they've been inspected or deleaded for you. Sometimes they get inspected but not deleaded and this creates a whole other set of problems. If that's the case, you can't do any renovations until you have it professionally deleaded or it would be flagged for Unautohrized Deleading and you can get fined and the property would never be able to get a Lead Certificate, only a letter of Environmental Protection that states you did illegal work, got caught, then had to pay a professional to clean up the mess. You don't want that.

If you don't already have an lead inspector you like to use, I recommend Anderson Lead Inspections, www.andersonlead.com. No, I don't get a referral fee or anything, I just know he's fair and works to help owners.

Let me know if you need any help here in MA.

Good luck on your investing!

Derreck

You'll make a ton more money flipping it then selling as is. It totally depends on what you want to get out of it. 

 I'm assuming the lead paint acknowledgement form just states the standard "I don't know if there's lead paint" and is completely useless. MA has a similar form that has to be given to every tenant. 

I just did a quick search for CT lead laws and they have the same law as MA, you were required by law to have the property deleaded BEFORE any child under the age of 6 moved in. You are in violation of the law, and if this tenant is a professional tenant, you're about to be sued, and you will more than likely lose. 

The tests at Home Depot are useless to you. Those are for Contractors that have been trained to use them. Every contractor in MA (and most other states) has to be EPA RRP (renovation, repair, paint) certified and can use those tests just to tell them in a surface they're working on has lead paint so they know to what extent they have to put up containment. Without testing first they have to put up containment as if it is lead. If they test it and it's negative, they can do less containment. But those tests are completely useless to a homeowner. A lead inspector uses an x-ray gun to check every surface in the house. Painted or stained (some stains had lead in them too). 

What I found was that the report of high BLL will be reported to the state and they will order an inspection on the property... that unit and any other with kids under 6. You will be required to have them deleaded professionally. The good news is that I couldn't find anything about a fine for not deleading before a child moves in. I found where they tried to modify the law and it was fought and got shot down, but I don't think there's anything on the books for failure to delead. Obviously I'm not a lawyer, nor do I claim to be an expert on CT lead laws, I just skimmed one section of the laws but it could be in the landlord tenant laws or somewhere else, so there may still be a fine, but I can't find mention of it.

My advice would be get a lead inspection done and delead the apartment ASAP, preferably before you're ordered to. Once you're under an order, sketchy deleaders will overcharge you because they know you're stuck. I ran in to that once where the other 2 guys that bid the project had added thousands to the job because the owner was up against a wall and had to get it done. It was a simple project that took me a day, and they were bidding around $5000 for the unit, I got it done for $1200.

Legislative Program Review and Investigations Committee (click that link for full text) says "Current law and regulations. Regulations for the lead program became effective September 1992 and, together with C.G.S. 19a-110 through 19a-111e, define Connecticut’s lead policy. Under Connecticut law, property owners are liable for abatement of defective interior and exterior surfaces that contain toxic levels of lead and are in a residential dwelling where children under the age of six reside. The regulations do not require a child be diagnosed with an elevated blood lead level in order for them to be applicable. However, if a child has been identified with an elevated blood lead level, stricter requirements ensue."

DPH Landlords and Lead Paint <-- This tells you what you need to know.

CT Landlord Tenant Laws <--You should know these laws like the back of your hand if you're renting in CT. 

Dept Public Health Laws <-- This is what I read and didn't see a "punishment" section. Scroll down through 109, 110, and 111.

Good Luck!

Derreck

I'm a licensed deleader in MA, so I can only speak on MA laws.

In MA, section 8 requires a lead paint test before a section 8 tenant can even move in. Chances are it's the same in CT, you might have a test on file. I'd contact section 8 and find out if the building was already tested and deleaded.

Also in MA, and hopefully not in CT, you need to have a lead certificate on file before you can rent to a family with a child. If a situation like yours happens, you are required to delead as soon as that tenant adopted that child, or even if a tenant got pregnant, or anytime a child is goigng to be there more than a few months a year, so even if a weekend dad moves in. Hopefully these laws are different in CT. In MA you have 90 days to delead from the time you purchase a rental or you are liable for tenants that lived there before you even owned it. If you don't, you can be sued by past tenants that you never met or rented to, MA basically attached the liability to the house, not the owner. 

I personally know a lady that lost the building in a lawsuit to a professional tenant that had a lead poisoned child and moved in and claimed it happened there, simply because the owner didn't know she needed a lead cert to allow them to move in. Her husband was the real estate investor, she inherited the buildings when he died, so she was just doing the best an 80 year old woman could do.

Lead paint isn't a joke, it can cost an owner hundreds of thousands of dollars if done wrong. Check your local laws and make sure you're in compliance. I truly hope this doesn't turn into a nightmare for you!

Good Luck,

Derreck

I just wanted to drop you a note on the new lead paint laws in MA. They now only give you 90 days to delead when you buy a rental. If you don't delead within 90 days of closing, you can be held liable for any lead poisonings that have ever happened at the building, even if it was before you owned it. They basically hold the building liable rather than the owner and that liability transfers from owner to owner until someone deleads it and breaks the chain. If you delead, and maintain the standard, you will be in the clear.

Here's the law (emphasis added by me):
460.100: Duty of Owner(s) of Residential Premises
(B) Whenever any residential premises containing dangerous levels of lead in paint, plaster or other accessible structural material undergoes a change of ownership and as a result a child younger than six years old will become or will continue to be a resident therein, the new owner shall have 90 days after becoming the owner to obtain a Letter of Full Compliance or a Letter of Interim Control, except that if a child younger than six years old who is lead poisoned resides therein, the owner shall not be eligible for interim control, unless the Director grants a waiver pursuant to 105 CMR 460.100(A)(3).

Note it says "a child younger than six years old will become ... a resident therein...". It is assumed by the state that any rental larger than a 1 bedroom will fall into this category at some point because of the anti-discrimination laws that prevent landlords from refusing a family because they have a child. The law specifically excludes rentals under 250 square feet. Basically this is their way of getting all rentals lead safe. If you don't delead, you will be putting yourself in a dangerous position.

This isn't a bad thing if you knew before you closed on your duplex. But you can still use this knowledge in your future negotiations. Assume $5k per unit and count the exterior as a unit. So a 3 family is 4 units = $20k for your negotiations. They rarely cost that much, they're usually half that, but if the property needs windows and exterior doors, it can get expensive. Like I said though, most come in about half that, so use $5k to negotiate and even if you get a 50% concession you could still potentially get it all paid for my the seller.

I can run any addresses through the database for you and see if they've been inspected or deleaded for you. Sometimes they get inspected but not deleaded and this creates a whole other set of problems. If that's the case, you can't do any renovations until you have it professionally deleaded or it would be flagged for Unauthorized Deleading and you can get fined and the property would never be able to get a Lead Certificate, only a letter of Environmental Protection that states you did illegal work, got caught, then had to pay a professional to clean up the mess. You don't want that.

If you don't already have an lead inspector you like to use, I recommend Anderson Lead Inspections, www.andersonlead.com. No, I don't get a referral fee or anything, I just know he's fair and works to help owners.

Let me know if you need any help.

Good luck on your investing!

Derreck

Best advice would be to ask your lawyer.

I'm not sure you completely understood the post. I repeatedly said "GOOD" contractor. If someone padded up a job $250k, by definition they are NOT a good contractor. Of course there are Craigslist hacks in every state that will take advantage of people. There are alcoholics in the industry as well who will not show up in the mornings. Obviously you need to check references and all that. 

Unfortunately contractors don't get the luxury of vetting investors in the same way investors vet contractors. Sure, we have our local lists, but when was the last time a contractor asked you for three past contractors you hired so we could see if you paid your final payment without issue, or if you tried to micro manage, or if you tried to get him to do free work while he was there, or any of a hundred sketchy things landlords do to try to get a "better deal"? How do you think investors got a bad reputation? Why do you think many Realtors won't work with investors? They don't all act the way you do.

In the state of MA (and many other states, I'm sure), there are certain elements that need to be in any contract by law. One of those elements specifies that the contractor is not an employee of the homeowner. Legally a contractor and an employee are two totally different things. There is a difference between you paying someone to work on your house and you having an employee. The contractor is a business owner, same as the investor is. Hiring a contractor to work on your house is a partnership, not an employee/employer relationship, and should be approached in the same way any other partnership would be. The contract and scope of work are the backbone of this particular partnership. They need to spell out what is to be done and what happens if it isn't. But the contractor doesn't work for you any more then you work for your tenant.

Think of it this way... a contractor is a landlord and the investor is the tenant. Your tenant pays you money every month for you to do the job of being their landlord... but do you work for the tenant? Not really. It's the exact same relationship between an investor and a contractor. If you have 50 tenants, do you answer the phone every time one calls or do you let them go to voicemail and screen out the important stuff from the fluff? If a contractor has 50 investors, does he answer the phone every time one calls or does he let them go to voice mail and screen out the fluff? Investors have to realize, sometimes their call is the fluff. If more investors would look at it like this, they'd get along with their contractors better and not have the issue of finding a good contractor. A contractor and an investor are partners just like a tenant and a landlord are.

YOU ARE THE CONTRACTOR'S TENANT, and just like tenants, there are good ones and bad ones that need to be screened out. Judging by her response above, Ms. Smith is a bad one that has been screened out a time or two and has a chip on her shoulder. (By the way, @Brandon Turner, The "lists" feature on the site doesn't render properly in silk browser on a kindle tablet.)

Be a good tenant and you won't get evicted. Be a good investor and you won't get screened out.