Offer accepted on a great deal, but there's lead paint AND kids

[Matt Davis]

I’m in an interesting situation with a deal and looking for some advice. We got an offer accepted on a great off market 6 family in Massachusetts.

We’ve discovered that there are children under 6 living there AND confirmed lead paint hazards recorded in the database. The failed inspection was about 20 years ago and we’ve been unable to track down the report.

The TAW tenant has refused to leave. She likes the low rent (about $1000 under market) and turned down $12,000 cash for keys! She is aware of the lead and maybe using it against the landlord.

We wanted to test for lead prior to closing, but the seller is refusing to let us do a lead test. He’s afraid it will bring the issue to light with the authorities and if the cost is too big we’ll back out and he’ll be stuck with a bigger problem. We’ve considered closing with the tenant in a hotel and doing abatement after closing, but don’t like the idea of doing this without an inspection So we can get an idea of what it would cost to remove the lead.

It’s a great deal, once stabilized it should cash flow great and we can build quite a bit of equity. The seller wants to sell, and we want to buy. We just need a way around this issue.

What would you do? Buy it anyway? Walk? Or is there is some sort of compromise we haven't thought of?

[John Underwood]

I googled it and found this:

There is no law requiring landlords to remove lead paint in their houses and apartments. ... Landlords must also give renters a pamphlet on the dangers of lead-based paint prepared by the Environmental Protection Agency. The presence of lead-based paint must also be included in the written lease agreement.

Also its likely been painted over many times by now.

Don't let the tenant hold you as the new owner hostage on this low rent. Give her the pamphlet, include the information in your lease and adjust the rent as needed.