Gordon Catts

Recently a young man was prepping a house to paint. This was a historic house in Marietta. He was scrapping off flaking paint. Unfortunately he was visible from the road ,even worse a lead base paint inspector drove by and saw him. The inspector stopped, shut down the job, spent 3 hours writing up the “violations” sent him to get certified and said they would discuss fines after he was certified.

A Property Management firm in Jacksonville Florida recently had an unwelcome visitor. The EPA  came calling. They wanted to see if the firm was in compliance. Specifically they wanted to see the signed   waivers that acknowledged that the tenant had received the “Lead Based Paint Compliance Disclosure Letter “.Unfortunately the files were not complete and the Firm was fined $150,000.A large Georgia firm had the same experience.  Their fine $200,000.
In Florida the enforcement is handled by The EPA.  Georgia has elected to handle enforcement themselves (EPD)

As a property owner you are still responsible even if you have a property management firm or a realtor involved in the sale, rental, or lease purchase of your home. There are two areas of concern.  You are responsible to have the proper paperwork in file.
You are also are responsible to follow the guidelines if you have a property constructed before 1978, If you or your contractor disturbs the paint.

A contractor friend estimates that following the guidelines for dealing with lead based paint will add ten percent to the cost of a job.

A Realtor friend   commented recently that he was doing a short sale on a large historic property with a lot of detail work that will have to be dealt with the next time the house is painted. I think ultimately the price of older buildings will be affected by the guidelines.

This may create opportunities in older dwellings.

On a property constructed prior to 1978 the requirements for the treatment are very specific.

For further information go to the EPA web site

http://www.epa.gov/lead/

You can Download the Brochure that must be given to a tenant or buyer:

http://www.epa.gov/lead/pubs/leadpdfe.pdf

You can download the compliance form you must get signed by the tenant:

http://epa.gov/lead/pubs/lesr_eng.pdf

You can download the compliance form you must get signed by the buyer:

http://www.hud.gov/offices/lead/library/enforcement/selr_eng.pdf

Classes for Certification

John Adams Classes scheduled weekly:

Webb site and contact info:     www.renovate99.com

Pete Youngs  scheduling  classes beginning in July:

Webb site:        www.peteyoungs.com

Email:           Peteyoungs@AOL.com

A developer friend of mine has what he call the third owner syndrome. He is very experienced and has turned projects around that his team purchase after the original developer went belly up. He says that many developers get carried away by the project and try to build a monument.  Or that they get caught in a changing market. They may have allowed a bit of wishful thinking to flavor their due diligence.  Several years ago before the market tanked, some “lenders” were more interested in the fees generated by a project than in its viability.  The project was going to be sold to Wall Street anyway. I remember back during the Saving and Loan Debacle looking at a project, We called it Camp Swampie. The project was a Second Home Golf Course Resort Community located in rural Louisiana. It was probably a hundred miles from anything. You had to travel miles on marginal secondary roads to get there.  They had a golf course, a nice clubhouse with all the upscale amenities, state of the art kitchen, golf carts in the garage (NEVER USED) and condos as well as developed Golf Course lots. Unfortunately, they had not sold one unit.  The RTC wound up with this puppy.
My friend says that after the project has been foreclosed several times many projects can be turned around because the numbers are finally realistic. I do not think Camp Swampie fell in that category. On a smaller scale there are a number of builder houses , small subdivisions and condos that are lying fallow . Many of these were started by reputable builders who got caught in a changing economy. They were unable to sell other units leaving them without the funds to finish other projects.  They were caught short when the lender who was funding their project was taken over. There have been many bank failures, leaving builders/developers stranded. Other projects were caught in changing demands.  Mac Mansions are much less desirable now. How about non conforming properties?  A contempory house in a traditional subdivision is certainly hard to sell.
Other properties were built either by inexperienced or fraudulent builder/developers. There are several subdivisions in my market that were built specifically to sell to unwary investors and have code violations, shot tie workmanship  and other issues.
There are opportunities in taking on an unfinished project but it is critical that you do your due diligence. Review the documentation, check for code and zoning restrictions. Check the construction. Some things may be covered up. A good inspector is money well spent on these types of projects. Be certain to get an owners title policy and read the title exceptions.  Do your due diligence very thoroughly. Be sure that your experience level matches the project or that you have access to the experience level necessary for this type of project.  Is this the best use of your resources?  There are lots of houses out there.