Lead Paint Compliance

In January of 1998, as part of its lead-based paint enforcement efforts, the U.S. Environmental Protection Agency (EPA) published its policy for compliance, monitoring, and enforcement of the Residential Lead Based Paint Hazard Reduction Act of 1992, known as Title X. 42 USC § 4851. Title X applies to most housing built prior to 1978 and requires both landlords and sellers to disclose to tenants and purchasers the presence of lead-based paint on the property to be rented or purchased. Violators of Title X are subject to a variety of possible enforcement actions, including criminal penalties and a maximum civil penalty of $11,000 for each violation.

The recent enforcement policy issued by the EPA provides procedures that the EPA will follow for determining the appropriate enforcement mechanism to be used in response to disclosure violations. First time violators will be issued a Notice of Noncompliance (NON). A NON will be issued in lieu of civil penalties, unless the violation is considered to be egregious. The policy provides that civil penalties are appropriate for second time and egregious violators. Criminal penalties may be sought were violations are committed "knowingly and willfully."

The amount of a civil penalty to be assessed by the EPA is calculated through the use of a penalty matrix. Penalties are set in two stages, the Gravity Based Penalty stage (GBP) and the adjustment stage. At the first stage the EPA will evaluate the seriousness of the violation. Facts such as the nature and circumstances of the violation and the possible harm that could result are factored into a penalty matrix to determine the appropriate penalty. The second stage adjusts the penalty up or down depending on a variety of factors. The factors used include the violator's ability to pay, the violator's prior history, whether violations were disclosed voluntarily, the level of culpability, and whether the violator qualifies as a small business. The EPA's policy leaves open the possibility that the penalty may be completely eliminated if the violation was discovered during a violator's self-imposed auditing procedure.

The maximum penalty that the two-stage penalty procedure may yield is $11,000. However, the $11,000 maximum penalty is assessed for each violation. Thus, the aggregate penalties applied to any individual violator can be substantial.

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