Failure to disclose lead based paint (Texas)

16 Replies

The seller signed the resale contract 10/30/2017 and I deposited the earnest money 10/30/2017 so everything is currently in motion. The issue I have is that the broker has sent a lead-based paint hazard document (10/31/2017) for me to sign, and I also discovered on my own that the property will be taxed in two separate counties as opposed to the one county the agent-provided information on which made the property attractive in the first place. With this newly discovered information, the numbers no longer work and I would like to walk away from the deal altogether. 

Before seeking legal advice from an attorney I wanted to reach out on BP and see what y'all thoughts were. 

Several easy termination option:

Do not sign the LBP

Do you have an option period ? Para 23 of the TREC contract

Sellers disclosure notice delivered ?  You can terminate within 7 days of receipt

That should be enough to work with

Originally posted by @Greg H.:

Several easy termination option:

Do not sign the LBP By not signing the LBP I am able to walk away from the deal? 

Do you have an option period ? Para 23 of the TREC contract I do not have an option period 

Sellers disclosure notice delivered ?  You can terminate within 7 days of receipt I do have a SDN received 

That should be enough to work with

Is there a mandatory HOA for the subject property?

@Guy Gimenez

No sir, The broker is saying that the lead-based paint was disclosed in the SDN and that the additional form is for my information only and if I wanted to I could hire someone to do the testing. 

I spoke with another gentleman and he said that the only way out of the contract is to not be approved for the funding.

In the third party financing addendum is says that the interest rate is not to exceed 3.5%. I spoke with the lender before proceeding and she says there would be no way they would fund the loan below 3.875%. Would I be able to walk away with earnest money refunded if unable to receive funding per the third party financing addendum terms unable to be met? 

Originally posted by @Joshua Standing Cloud :

The seller signed the resale contract 10/30/2017 and I deposited the earnest money 10/30/2017 so everything is currently in motion. The issue I have is that the broker has sent a lead-based paint hazard document (10/31/2017) for me to sign, and I also discovered on my own that the property will be taxed in two separate counties as opposed to the one county the agent-provided information on which made the property attractive in the first place. With this newly discovered information, the numbers no longer work and I would like to walk away from the deal altogether. 

Before seeking legal advice from an attorney I wanted to reach out on BP and see what y'all thoughts were. 

In Nebraska, if your house was built before 1978, it is required that a lead based paint disclosure is completed by the seller. There are no exceptions, not even for homes FSBO and As-is.

1. The broker is wrong, yet again. Hopefully this is not the same broker who has consistently given you poor advice. Regardless, the broker needs to read the regulation. The statutory language must be included in the contract itself, or attached to the contract. The SDN will not suffice and I am confident the language is not contained in the SDN anyway. NOTE: A failure to provide the notice does not give you a right, contractually or statutorily, to terminate the contract. Your only option is to report it to EPA / HUD.

2.  Since you're using financing, review the third party financing addendum regarding the number of days you're allowed to provide written notice if you can't get financing. 

3.  Para. 6(D) may also provide a termination point but you won't know until you receive the commitment. 

There may be other termination points too but no way to know for sure without additional details. 

Best of luck. 

@Anthony Gayden

I was born in Omaha, NE. I made the trip out last year and boy have some changes been made over the last twenty years! 

I was under the impression that the lead-based paint document would need to be produced and signed by the buyer prior to contact but according to my agent's broker, it does not. She is saying that as long as the seller wrote (NO) on the SDN that is good enough. 

One to four family residential contract (Resale) Form TREC NO. 20-13 reads the following - 

7. Property Condition: C. SELLER'S DISCLOSURE OF LEAD-BASED-PAINT AND LEAD-BASED PAINT HAZARDS is required by federal law for a residential dwelling constructed prior to 1978. 

There is an N marked next to lead-based paint in the seller disclosure notice.

@Joshua Standing Cloud

Both Guy and I have been Brokers for a long time and are/will try to help you.  As you can see, most of the "outs" are maybes and we all will have different opinions

Is this the same transaction that you were wanted a delayed option period and using the listing agents firm in an intermediary relationship ?

Was/is there an option period ?

Did you receive the SEller's Disclosure before signing the contract ?  On a side note, I have no idea why buyers agent ask for this.  Personally, i delay them as long as possible as they are another potential out

If all else fails, I would just tell the listing agent(seller?) "Look I do not want the property, so we can play games for the next 45 days and I will use any out I can.  Or we can just terminate today and I receive my earnest money back and you can begin your search for another buyer." 

@Jim Adrian

https://www.epa.gov/lead/real-estate-disclosure#ag... reads as follows: 

Real estate agents must:

  • Inform the seller of his or her obligations under the Real Estate Notification and Disclosure Rule. In addition, the agent is responsible if the seller or lessor fails to comply; unless the failure involves specific lead-based paint or lead-based paint hazard information that the seller or lessor did not disclose to the agent. Read the regulations that includes these requirements.
  • Provide, as part of the contract process, an EPA-approved information pamphlet on identifying and controlling lead-based paint hazards titled Protect Your Family From Lead In Your Home (PDF). Attach to contract, or insert language in the contract, a "Lead Warning Statement" and confirmation that you have complied with all notification requirements.
  • Provide a 10-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards. Parties may mutually agree, in writing, to lengthen or shorten the time period for inspection. Homebuyers may waive this inspection opportunity.

Per the language, the agent should have provided the pamphlet and warning during the contract process, as opposed to sending me the pamphlet and warning two days after the contract and earnest money had been in the hands of the title company. 

Originally posted by @Guy Gimenez :

NOTE: A failure to provide the notice does not give you a right, contractually or statutorily, to terminate the contract. Your only option is to report it to EPA / HUD.

My understanding was a buyer had 7 days from the time the seller's disclosure notice was disclosed to back out of the contract, and that is why listing agents include it when they put a property on the MLS as it would start the disclosure clock so to speak. I don't know it to be true, but it is what I always thought, like @Greg H. apparently. I am curious to hear the reasoning on either side of this!

@Jason Hirko

You only have 7 days to terminate under the S.D. IF the disclosure is not delivered prior to the execution of the contract. If it is delivered prior to, there is no termination point. 

@Jason Hirko

http://www.lonestarlandlaw.com/Seller-Disclosure.h...

Penalty

If the seller does not give the Seller’s Disclosure as required, Property Code section 5.008(f) permits the buyer to “terminate the contract for any reason within seven days after receiving the notice.” The statute does address the legal consequences of the seller never giving the Seller’s Disclosure at all. However, if the failure to give the notice is coupled with fraud or failure to disclose defects, then other laws and penalties may (and likely will) arise pursuant to the Deceptive Trade Practices Act and/or the Statutory Fraud Act (see below).

Originally posted by @Guy Gimenez :

@Jason Hirko

You only have 7 days to terminate under the S.D. IF the disclosure is not delivered prior to the execution of the contract. If it is delivered prior to, there is no termination point. 

 Awesome - that make sense. Good to know

I just assume any property built before 1978 has lead paint unless documentation is provided that says otherwise.  Why would the lead paint be a surprise at all?

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