Washington -- If the new Congress is seriously looking to limit costly federal regulatory intrusions into ordinary citizens' lives, here's one the lawmakers can catch before it affects millions of home sellers per year: Proposed regulations requiring all sellers of houses built before 1978 -- roughly two-thirds of the nation's housing stock -- to give potential purchasers the equivalent of a written 10-day opt-out period before going to closing.
There's more. Under the rules, if sellers fail to provide written disclosure of the potential buyer's new right to the 10-day period, they're subject to federal criminal penalties of up to one year in prison per violation, federal civil penalties of up to $10,000 per violation, plus treble civil damages if a would-be buyer gets really angry and files suit.
You read that right: No matter where you live, all you need to become subject to an extensive new set of federal oversight procedures is to be the owner of a residence built before 1978. If you happen to fit that bill -- or if you plan to buy or rent such a piece of property -- two federal agencies are set to regulate the details of your real estate contracts under new guidelines.
Here's what's going on. Until Jan. 3, 1995, the Department of Housing and Urban Development (HUD) and the Environmental Protection Agency (EPA) are accepting public comments on their proposed regulations implementing the Residential Lead-Based Paint Hazard Reduction Act of 1992. Tucked away in that year's federal housing and community development legislation, the lead paint provisions drew relatively little notice.
The law's central purpose was unassailable: To reduce the incidence of lead-based paint poisoning, especially among children. Medical research in the 1980s had identified exposure to lead-based paint as a significant environmental hazard for youngsters living in areas with older housing. The use of lead-based paint was banned nationwide by the Consumer Product Safety Commission in 1978, but some large cities had prohibited it in the 1960s.
In the two years after passage of the 1992 lead-based paint reduction bill, researchers have come up with important new findings as to the extent, location and remedies for the problem. A National Health and Nutrition Examination survey published last July in the Journal of the American Medical Association reported a dramatic decrease in lead levels in the average
American's bloodstream in recent years.
The study focused on blood levels in over 12,000 individuals sampled between 1988 and 1991. In the late 1970s, according to researchers, 88 percent of American children had elevated lead levels in their blood. By 1991, the number of children in that category had dropped to 8.9 percent, thanks to banning of lead use in gasoline, food and drink containers, and paint among other sources.
Another study this summer pinpointed where the remaining lead problem is most heavily focused: Inner-city, low-income, minority neighborhoods, especially in the Northeast.
Still a third study, published in February by researchers at the Atlanta-based Centers for Disease Control and Prevention, found that educating and counseling parents in such neighborhoods about the hazards of lead-based paint "proved a very effective tool" in reducing the levels of lead in children's bloodstreams. The study was conducted on 490 children, many of whom lived in center city, minority neighborhoods.
None of this data was available to Congress when it passed the lead-based paint bill in 1992. For sellers of "target" homes, the rules require you to provide all would-be purchasers a four-part disclosure form warning of the potential presence of lead-based paint somewhere in the house simply because it was built before 1978. The would-be purchaser must sign a printed acknowledgment stating he or she was informed of the possible presence of such paint, and a confirming receipt of an EPA-prescribed booklet on lead-based paint hazards.
The form also requires any realty agent representing the seller to sign the disclosure, retain a copy of it for three years, and for the seller to acknowledge that he or she has informed the potential buyer of any known areas in the house containing lead-based paint.
Now for the kicker: The law prohibits the buyer from "becoming obligated" under any sales contract unless the seller allows a 10-day (or otherwise mutually agreeable) period to check for the presence of lead-based paint "hazards." And what's a "hazard"? The proposed regulations are extremely broad -- wide open to convenient interpretations on behalf of buyers who get cold feet after signing the contract and are looking for an easy way out.
The net effect of the rules if they're finalized later in 1995: Nearly three million home transactions per year, according to government estimates -- the vast majority located in areas where children rarely have elevated lead in their blood -- will be subject to new federal scrutiny, paperwork and penalties. Add the new legal liabilities hefted onto the shoulders of sellers -- and new opportunities for renegotiating price and other terms handed to buyers -- and you begin to grasp what the rules could mean for your next transaction.
Kenneth R. Harney is a syndicated columnist. Send letters care of the Washington Post Writers Group, 1150 15th St. N.W., Washington, D.C. 20071; 243-6007.