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Lead Based Paint Regulations and the Increased Cost for Renovations

EPA Lead Based Paint (LBP) Regulations are impacting contractors who work on target housing in a big way. Target housing includes single family homes, duplexes, triplexes, apartments, condominiums, townhouses and child care facilities built before 1978, when lead based paint was commonly used. Here, we will examine how contractors are being impacted, and why compliance with the regulation is costing the contractor, and ultimately their customers, more.  The added cost to the contractor is felt from both a time and money perspective.  When looking at this from a contractor’s perspective, you will quickly understand why their quotes on pre-1978 target-housing are higher.

Lead based paint detector being held over old chipping paint.

List of EPA Regulations,Requirements and Costs for RRP Certified Contractors

Contractors May Have to Pay Fees in Multiple Jurisdictions

Some States and Indian Reservations applied to EPA and were granted the right to both administer and enforce the LBP regulation.   These are Agreement States or Territories.   A contractor that lives near and works across a state line or Indian Reservation will find that their certified firm must pay both application and renewal fees to multiple entities.  The fees can vary greatly.

Getting Certified and Assembling a RRP Certified Crew

A contractor must either work for a Certified Firm as an employee or own their firm.  EPA’s definition of a firm can be a sole proprietor, corporate entity or partnership.  Additionally, one or more individuals must take and pass the exam to become an RRP Certified Renovator affiliated with that Certified Firm.  The number of individuals needing to pass the exam would depend on the size of the firm and the number of pre-1978 jobs they could have going at any one time as a RRP Certified Renovator must be assigned to each qualified job.

Cost of Training Employees to Work on Lead Based Paint Contaminated Projects

All employees that work on target housing projects must be trained on how to comply with all the regulatory requirements necessary to contain LBP contaminates.  This can only be done by the Certified Renovator.  Their training records must be available on each job site they are working, just in case of an unannounced onsite audit.  Violations can result in a heavy fine.

Additional Paperwork and Staff Required for Lead Based Paint Jobs

Each job will require a file that will include:

  • Renovate Right Brochure(s) – signed by owner and tenant(s), if applicable
  • Contract – Outlining scope of the work to be done
  • LBP testing results, if testing is authorized to be conducted
  • Verification of age of property that is normally procured from public tax records
  • Training records of employees assigned to job
  • RRP Certified Renovators final report certifying that all work was done in compliance with regulations
  • The prudent contractor will include the before, during and after pictures to minimize legal exposure from owners and tenants

Additional Equipment and Supplies Needed for Lead Based Paint Removal

Each firm will need to have one or more EPA approved HEPA vacuum cleaners to be used during the clean-up stage.  These alone can range between $600-$2,000 dollars.  The 6 mil plastic, contractor bags, masking and duct tape, moon suits, masks, booties, barrier equipment, signs, special cleaning supplies and cloths, quickly add up to hundreds of dollars for each job.  On small jobs, expect between $150 – $500 or more.  On larger projects like an apartment complex, it could run into the thousands.

Liability Exposure for Lead Based Paint Contractors

Free Real Estate Investing WorkshopThe cost of Error and Omissions or Liability insurance, if you can get it, is exceptionally high for the party requesting it.  The last time I checked, it was about the same as a LBP abatement contractor. We are referring to an annual premium in the thousands, even for small ongoing maintenance situations.  Since contractors are subjecting themselves to possible lawsuits from tenants, property owners, landlords and even employees, having the insurance is a smart move.

Additional Time Needed for Lead Based Paint Compliant Renovations

The additional time required to complete a job can add hours to smaller or days to larger jobs.   That, along with the increased wages that must be paid, plus a higher service sales tax, is exactly what contractors don’t need; higher expenses and lower revenue.  

When you consider the additional time, expense, training and risk involved in remodeling a home with lead based paint, it is easy to understand why honest, concerned, responsible contractors are having to charge 10%, 15%, 20% or more for their services.  Hopefully, this article will help you as an investor/consumer better understand the contractor’s perspective when pricing your next quote request on a pre-1978 target housing project.

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