Lead Paint Test Waiver. Did you check the box?

After trying and failing to get their Offers accepted on other homes, a couple finally outbid the competition. All that was left was for the seller to sign the Offer and send it back to the buyer. And that’s when the listing agent noticed an unchecked box on the Lead-Based Paint Disclosure and Testing Contingency, Addendum S. Instead of accepting this Offer, the sellers, facing an approaching deadline, decided to go with their second choice Offer. Once again, this couple came in second, and their search continues. What’s most painful this time is the reason they didn’t get the house was not their fault. The error is common and avoidable.

The Offer defers to included

Unless a buyer elects to waive the Lead-Based Paint (LBP) Testing opportunity by merely putting an X in a tiny box, the contingency becomes part of the Offer. Homes built before 1978 may have lead-based paint or lead paint hazards, such as lead dust, chipping, peeling paint. It’s safe to assume homes built when lead paint was prevalent will test positive for lead. And when they do, the implications are complex and everlasting. Given a choice, home sellers prefer not to have their homes tested for lead paint, and buyers who want to own older homes don’t test for lead paint. The presence of lead results becomes a permanent disclosure obligation from here to eternity. 

But I don’t want to test for LBP

The penalties for sellers and real estate agents for denying a buyer the opportunity to test for LBP are severe. The lead issue is considered a serious health risk by the EPA. Their tolerance for even the appearance of creating roadblocks to pre-commitment testing subject the parties to significant financial liability. For that reason, the LBP Testing Contingency is a condition of the Offer, and the only way to remove the contingency is for the buyer to waive it. Unless the buyer waives the contingency (and they can do that by merely placing an X in a box indicating they choose to waive), proceeding with the Offer will put the seller in a position of discovering the house has lead paint. With that knowledge comes the unpredictable and expensive obligation of mitigation to a level acceptable to the EPA. The closing with this buyer will be in jeopardy. The chances of selling to anyone else are uncertain. If you don’t want the LBP testing opportunity, you have to make sure you waived. 

A Counter Offer is Not an Option

A simple counter offer is all that’s needed to remove a drafting flaw or an unfavorable condition in an Offer. Unfortunately, when the issue is an LBP test, the seller is wise to avoid doing anything that looks like they are committing the buyer without allowing the test. Attorneys have advised using a counteroffer from the seller to the buyer could be interpreted as the seller’s act to deny the right to test. The safe route for the seller who has multiple acceptable offers, including one with a testing contingency, is to seek an attorney’s advice. When there are other acceptable alternatives on the table, it may be safest for the seller to turn to one of the other offers and move forward with one of those.   

An avoidable flaw

It’s not the seller’s or the listing agent’s place to try to fix a flawed offer if the seller has an offer they want to accept. We can suggest changes and explain options. It’s up to the buyer’s agent or attorney to make sure the Offer accurately expresses their client’s intention. Failing to check the box to waive the LBP test is a common error. And it’s avoidable. 

Author: Tom Meyer, Owner-Broker, Essential Real Estate, LLC Madison, WI

The real estate transaction, disclosure, and confidentiality are the business of a Wisconsin licensee. It's in the transaction where the skill of the licensee, and their commitment to the law where the public is protected or placed at risk. Essential real estate services are specified in real estate license law. Those services are worth professional fees. Paying professional fee rates for administrative services is a choice when an alternative exists. We are that alternative. Old business model commission rates are taxing the home equity of American home sellers. Essential Real Estate LLC was created so our clients keep more of their home equity, spend less on broker fees, and receive skilled representation in negotiating purchase agreements.

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