TOM SWARTZ: Can you give a brief history of the Lead Renovation, Repair and Painting (RRP) Rule and how it affects today’s remodeler and homeowner?
WILLIAM SHAW: The rule obviously includes all homes built pre-1978. Currently, we are at 78 to 79 million homes in this country. The rule was instigated in 2010, so we’ve been under the rule for about three years now. There was a certification program that companies were to follow in order to educate them and their employees as to the proper procedures in dealing with lead in almost all instances of remodeling, restoration, and repair where certain specifications of a demolition or removal have taken place. Today, it’s an extremely controversial topic. At the NAHB Spring Boards in Washington D.C., I had the privilege of testifying before the EPA and the Senate on some of the key issues involving lead. It’s a very passionate topic for people on both sides of the fence.
William Shaw, GMR, GMB, CGP, CAPS
President, William Shaw & Associates, Houston, Texas
William Shaw & Associates, a design-build contracting firm, has been in business since 1984. The firm’s volume is approximately $2 million per year.
George “Geep” Moore, Jr., CR, CMR, CGR, CAPS, GMR, GMB, CGP
President, Moore-built Construction & Restoration, Elm Grove, La.
In business since 1985, Moore-built Construction & Restoration does repair work, insurance repair, and forensic consulting. The firm’s volume is $500,000 per year.
GEEP MOORE: The rule comes through the amended Toxic Substances Control Act of 1976. Later, then-Senator Obama put pressure on the EPA to create the RRP Rule. It was put out for comment in 2006 to proceed forward until we got the rule in April 2010. The rule is very broad. It says if you disturb the lead paint, or disturb more than 6 sf inside a home or more than 20 sf on the exterior of the home, then we fall under the lead paint rule provided the home has tested positive for lead paint. That’s part of the rub that we have with the rule at this point. Most everyone has been certified, and we are all using the lead-safe practices. However, we do not have a test kit at this time that is EPA-recognized and approved for both negative and positive criterion. The ones that we do have are showing approximately 40 percent false positives. This means that 40 percent of the time, we are doing lead-safe practices, which run anywhere from 5 to 10 percent of the cost of the entire project. Our test kits are just not that reliable. They are so sensitive; they actually show a positive result when there is no lead. On the flip side, the test kits show negative for lead paint when about 10 to 15 percent of the time the lead paint is actually there. A false-negative reading is the worst thing we deal with because when there is a false-negative it indicates we have not done the lead-safe procedure when we should have. It’s common sense stuff that we use as far as negative air pressure, cleaning, masking-off, and separating the areas where the lead paint is from the rest of the project so we can clean it up and not put the lead paint back into the environment. We don’t have the opt-out clause any longer, which gave the homeowner the right to opt out of this rule if there were no children in the house under the age of 6 and no pregnant women. That was taken away so now you have no choice. Once you come into the home and you certify that it does have lead, then you have to use lead-safe practices. The word “disturb” is the word that’s in the rule so that makes it very, very broad. Even if you’re going to do some simple painting where you might be cleaning the window off and flakes of paint are going to fall off, now we fall under the RRP rule.
SWARTZ: Can a homeowner choose not to have a remodeler with lead-paint abatement certification that follows the guidelines? Can they just call someone else to do the project?
SHAW: Not only can a homeowner hire a contractor that is not certified, they can also do the work themselves. To me, this is a much worse situation. They can do the demolition themselves, then call up a contractor and say, “I am ready to go and I am lead-free.”
MOORE: The rule itself does not put the restraints on the homeowner. The homeowner can do whatever they want. They are not bound by the RRP Rule. Anyone who comes in and performs work on that house, and disturbs 6 sf inside or 20 sf outside, they fall under the rule and are required to do the proper testing or at least use the proper safety precautions and correct practices. The problem with letting a homeowner do this work is they are not going to come in and mask-off or keep the lead paint from becoming aerosolized and falling throughout the home. Now when a remodeling contractor does come into the home and they do find lead, the homeowner is going to back off of the job. It’s extremely important for the contractor to make sure he’s covering his assets when he’s doing this type of work. Unfortunately, because of the expense to get certified and all the related supplies and materials, it’s too expensive for most small remodelers to be certified. They are just hoping they don’t get caught by the EPA or in a situation where a homeowner has a child that has tested positive for lead.
SHAW: When I told the EPA that less than 5 percent of the contractors in the U.S. are following this rule to the letter, they could not believe that was the case. When I explained there was a defective test kit, there is no policing of contractors, the EPA was picking on certified contractors and not going after the non-certified contractors, there was no education to the public that had been promised, an there are just too many issues. The other thing Geep and I have both come across is the general liability insurance debate. Nobody is talking about that.
MOORE: The deal with the general insurance is that as a remodeling contractor, you can pull anyone’s liability policy and you will find a disclaimer on the back that says a general liability policy for contractors and remodelers does not cover asbestos or lead abatement. To do this lead safe practice, you now have to add a rider to your insurance policy that is specific to cover for lead liability. The minimum cost for this rider is an additional $5,000 to $10,000 if and when you can find someone to write it. This would have been a major expense for my overhead. Now, I have another remodeling contractor who does lead, mold, and asbestos removal for me. I have the homeowner pay them directly so it never even touches my books because if I am dealing with it, I have no insurance. Most guys out here probably have no clue there is an exclusionary clause in their liability insurance that says they are not covered for lead, asbestos, or mold removal.
SHAW: We have a lot of risk in our business and when you add that layer to it, I would agree with Geep that one out of 20 or 25 even understand what’s going on with insurance assuming the general liability covers that lead. There are many situations in dealing with lead, especially when you don’t now what is going on in other parts of the house in terms of exposure to the people in the home from areas you haven’t touched at all. There is a huge risk involved.
SWARTZ: Who regulates the RRP Rule and how do you deal with them?
MOORE: I am actually the immediate past chair of the NAHBR, and Bill is the current chair. For the last six or eight years, each person in this role has dealt with lead. We’ve gone before different Congressional committees in Washington, D.C., to talk about this but it’s only administered two different ways. If someone turns you in, the EPA is supposed to go out and investigate the project. As far as I know, the local EPAs do not do a whole lot; it is generally going to be the local EPA that comes in does something. They other thing the EPA does—one that we have the most objection to—is they just send out a blanket letter and they are only sending this letter out to the names they have on file. Bill and I are both lead certified, so we are both on the radar of the EPA. Tomorrow, they could send me a letter that says, “We want to see all of your contracts since this rule went into effect on April 22, 2010.” They are going to check the contracts and my paperwork to see if I did my paperwork correctly. Whether or not a job has lead paint, there is a question they ask, “How did you certify this home was lead-free? Was it by age or some other form of information?” The only way you can get this information is when you pull permits, which reveals how old the house is, but short of that the information comes from the homeowner and whether or not a room was totally remodeled or gutted. You have to verify that information. The next question the EPA wants to know is when the home was built. The EPA also wants to know how you verified this date. It’s gotten to the point whether or not we are in a pre-1978 or post-1978 home, you still have to fill out paperwork. The paperwork is what the EPA goes after. Most of the fines that have been levied are because the remodeler did not give out the “Renovate Right” pamphlet. You have to give the homeowner that piece of paper, and if you don’t do it, you will be fined. This is where the bulk of the fines have come from, not from checking residences to see if the remodeler is actually doing the work correctly. The EPA is more concerned about the paperwork than they are that lead-safe practices are done properly.
SWARTZ: Does a remodeling contractor have to give notice to the homeowner that there may be lead in the home?
SHAW: We do our due diligence through the tax statement from our county appraisal district to find out what the age of the home may be. That is the best way and it’s usually very accurate. If the house was built pre-1978, I will know that before I go into the initial meeting with the client. It is part of the document package we go over with the client before we start on a project. We have the homeowner sign that they have received the information and that document goes into the job folder.
MOORE: It’s our job to tell them, and yes law binds us, to tell them there is the possibility there is lead in their home. We give them the “Renovate Right” pamphlet so they can be informed about the possibility of lead in their home.
SWARTZ: The major fines we are seeing have to do with the fact that remodelers are not doing the paperwork correctly.
MOORE: Yes, most people we know of that have been fined got a letter from the EPA saying, “We want to see your contracts and all the information you have from these jobs.” When the EPA finds you gave proper notice by giving the homeowner “Renovate Right”, then you completed the job, if there is not the proper documentation that you performed the lead remediation properly then the EPA is going to give you a fine. The fines are a maximum of $37,500 per violation. When they do this paperwork check, you could have multiple violations on the same job. Most guys doing remodeling may know about lead paint but they have no clue they are supposed to be providing all of this information and the “Renovate Right” pamphlets.
SWARTZ: Where does a remodeler go to learn about the RRP Rule?
SHAW: If one really wants to get bogged down, they can go to the EPA website where there is a whole section on lead. One of the benefits of being in a professional organization is that it’s a source of great information from fellow remodelers that work in your area and talk about the problems and issues they face. The nuts and bolts of it can be found at the EPA; the NAHB is also a great source to get more information on exactly what’s going on with the rule.
SWARTZ: Is there an additional expense the homeowner must incur for lead removal and do remodelers have any idea how much the additional expense may be to the homeowner?
MOORE: We generally put that cost between 5 and 10 percent. If the scope of the job gets larger and the overall price of the job gets larger, that percentage will vary. For most of the smaller projects we’ve done, it’s usually around 10 percent. The problem with this is that a homeowner comes to me with a $100,000 budget to do his kitchen, and I tell him, “It’s going to take another $5,000 to do the lead remediation. What part of your budget are you going to cut out for the lead remediation? Are you going to go with lesser grade fixtures or countertops? What are you going to do to cover this cost?” Or, they have to come up with an additional $5,000. When you are talking about the smaller projects, say a $30,000 project, now all of a sudden we are talking about taking a higher percentage of the project allowance. The homeowner thought he was going to put $30,000 into a remodeling project, now he is going to have to go back in and set their sights a little lower around $27,000 or come up with an additional $3,000 to do the project. Worst case yet for the remodeler is when we have to tell a client we cannot do a job unless the lead paint remediation is done correctly. If we don’t remediate the lead paint immediately, we have to refuse the job. We have to walk away, we cannot take that liability.
SWARTZ: When there is a lead-related violation, how is it reported?
SHAW: It can either be the homeowner or another contractor that reports a violation. If I lose a project to a contractor that is not playing by the rules, I am going to turn them in. There has to be integrity and the number of us following the rule is too small in the first place.
MOORE: You just turn the project in once you see a contractor sign go back up on a job that was tested positive for lead. We’ve been certified, we play by the rules, we have the proper insurance, so here is another remodeler who is going to beat you on this project primarily because he is not figuring the cost of lead paint into the overall cost. We have licensing law in Louisiana and we find guys out here practicing without a license, we turn them into the Licensing Board. It’s no different with lead. He is costing me work because he is not practicing correctly, and yet my business is. This is going to have to be self-policed because it is so large the EPA is not going to be able to come in and scratch the surface of the number of contractors doing this work illegally and improperly. The only way it gets done properly and we make it more public is to turn in the contractors.
By the way, most paint stores like Sherwin-Williams have the “Renovate Right” pamphlets. Until we get the public more aware, the homeowner is going to keep going to the low-ball, non-certified contractor.