For the next few years real estate brokers can expect to hear more and more about lead-based paint litigation, but they should be safe as long as they keep sales associates focused on meeting the EPA's disclosure requirements.

Earlier this month the state of Rhode Island became the first in the nation to file lawsuits against the some of the country's oldest and best known paint manufacturers, contending they are liable for poisoning tens of thousands of the state's children. The public action followed a private lawsuit filed earlier this year in Baltimore against apartment building owners.

While the legal actions are worth watching, say real estate lawyers, they nevertheless should not directly impact brokerage companies - even if in the past the companies have sold homes that contain lead-based paint.

"Real estate brokers didn't manufacture the paint, they weren't involved in the marketing of the paint and they didn't put it on the walls," says Chicago lawyer Bob Butters, one of the top real estate litigators in the nation.

"As long as agents make the proper disclosures that are mandated by the government, they should not have liability."

He quickly adds, however, "But if the broker or agent does have specific knowledge that the house has lead-based paint - if it's been tested or the seller tells him -- he needs to disclose what he knows. It's no different than if a house is near a toxic waste site. If he knows the subdivision is next to a landfill, he has to tell what he knows."

NAR attorney Ralph Holmen notes that, while it is hard to predict what judges and juries will do, there is little to suggest culpability would reach all the way to the real estate broker.

"There are precious few cases where the real estate agent is named in his capacity as an agent of the seller," Holmen said. "If the owner has no reason to know a house contains lead-based paint, then there isn't liability.

"In fact, theoretically if (Rhode Island and other states) are successful in compelling the clean up of buildings, that might help Realtors just by getting rid of the stuff. Of course, that's a long way down the road."

What begs the issue is that paint manufactures also believe they should not be part of the litigation, arguing that they stopped adding lead to paint in the 1950s - long before the government banned it in 1978. And, they don't understand why they are being penalized now for something that was perfectly legal for most of the century.

In part, of course, what encourages the action is the $206 billion tobacco settlement brought by attorneys general around the nation. If tobacco companies can be made liable for the side effects of a legal substance (cigarettes), why shouldn't manufacturers of lead-based paint also be held liable for the harm their products do to children.

In theory, real estate brokers could be swept into the litigation if only because they are in the chain of those responsible for putting families into homes.

For the past few years real estate agents have been involved in the lead-based paint issue because the EPA has mandated that persons buying homes built prior to 1978 must be provided an EPA pamphlet discussing he the problems of lead-based paint.

Also, buyers of such homes are permitted an opportunity to test for the presence of the paint.

Lawsuits that have gone forward so far against real estate agents predominantly involve failure to make the EPA required disclosures.

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Published: October 20, 1999

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