Assessing and Managing Lead Risks in Commercial Properties.Originally published 1 July, 2005 Lead exposure - in drinking water drinking water supply of water available to animals for drinking supplied via nipples, in troughs, dams, ponds and larger natural water sources; an insufficient supply leads to dehydration; it can be the source of infection, e.g. leptospirosis, salmonellosis, or of poisoning, e.g. , paint, dust and contaminated contaminated, v 1. made radioactive by the addition of small quantities of radioactive material. 2. made contaminated by adding infective or radiographic materials. 3. an infective surface or object. soils - is reemerging as a target of public concern and governmental regulation, and as a source of potential legal liability. In October 2002, the District of Columbia Water and Sewer Authority The District of Columbia Water and Sewer Authority, or WASA was created in 1996. The District of Columbia Government and the United States Government established WASA as a semiautonomous regional entity. WASA's finances are completely separated from DC's finances. sent letters to thousands of homeowners notifying them that it had measured lead in their drinking water at concentrations as much as 20 times the 15 parts per billion action level which the United States Environmental Protection Agency "EPA" redirects here. For other uses see EPA (disambiguation) and Environmental Protection Agency. The Environmental Protection Agency (EPA or sometimes USEPA ("EPA EPA eicosapentaenoic acid. EPA abbr. eicosapentaenoic acid EPA, n.pr See acid, eicosapentaenoic. EPA, n. ") established for public water supplies in 1991. The Authority's disclosures provoked considerable public outcry, and prompted a review of federal drinking water requirements both in Congress and at EPA. The results of EPA's inquiry are due out later this summer. EPA's acting administrator for water programs reportedly has stated that, although EPA has not found a pervasive national problem, certain public water systems, including metropolitan Boston and San Juan San Juan, city, Argentina San Juan (săn wän, Span. sän hwän), city (1991 pop. 353,476), capital of San Juan prov., W Argentina. It is a commercial and industrial center in an agricultural region. , continue to have elevated lead levels. EPA's reassessment of federal drinking water requirements is not the only area of renewed national interest in lead exposure. EPA has continued to augment and refine its regulations concerning "lead-based-paint hazards" in an effort to reduce confusion concerning their application and scope. Further, EPA continues to urge regulated entities to undertake interim control measures for conditions below those regulated limits. Of equal concern to property owners and managers, lead-based-paint claims have been on the rise in the last decade, with a number of substantial jury verdicts recently reported. In New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , for instance, a boy alleged to have been exposed to lead paint was awarded $49.5 million in a jury verdict against New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. and two property-management firms. In Massachusetts, a state court assessed $7.7 million in damages against a landlord as compensation to a twenty-year-old allegedly exposed to lead as an infant. And in California, a landlord recently agreed to pay $1.2 million in a settlement involving medical monitoring of children living in his buildings. These examples, and national databanks on litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. trends, suggest that litigation against property owners and managers for exposure to lead is not waning. While lead exposure traditionally has been an area of concern for residential property owners, increasingly it is becoming an issue in commercial buildings. Developers, property owners, managers and investors have taken note of renewed public and regulatory interest in lead hazards, in drinking water and through other potential routes of exposure, and they are grappling with how to evaluate and respond to these potential sources of liability. This advisory offers a practical approach for anticipating and addressing lead exposure issues. It begins with a basic review of the sources of lead exposure and the current regulatory landscape. It then suggests a general framework to address lead conditions, including by providing guidelines on how to assess and manage lead-associated risks in an evolving regulatory climate regulatory climate The extent to which a regulated firm or industry is permitted to earn an adequate return on the stockholders' investment. This term is nearly always used in reference to utilities, which are required to obtain approval for rate changes. . Sources of Lead Exposure Common lead-exposure pathways, largely a result of the historic use of lead in products, include lead in paint, dust, drinking water and soil. Of these, lead-based paint is, perhaps, the best known source of human exposure to lead, owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de a now decades-old federal public information campaign. Lead carbonate lead carbonate n. A poisonous white amorphous powder, PbCO3, used as a paint pigment. Noun 1. lead carbonate - a poisonous white pigment that contains lead ceruse, white lead was used as a pigment in white paint until it was banned in 1978 by the Consumer Product Safety Commission. The sale of paint containing more than .06% lead is now prohibited, but recent U.S. Department of Housing and Urban Development estimates indicate that as many as 38 million pre-1978 dwellings may still contain lead paint. Exposure paths for lead paint range from oral ingestion ingestion /in·ges·tion/ (-chun) the taking of food, drugs, etc., into the body by mouth. in·ges·tion n. 1. The act of taking food and drink into the body by the mouth. 2. by young children to ingestion or inhalation of paint dust by construction workers. While lead-based paint is a well-publicized source of lead exposure, EPA estimates that approximately 20% of human exposure to lead is caused by lead in drinking water. Lead in drinking water is typically caused by the presence of lead in pipes, solder, and other water system components. Household fixtures also may contain lead. Corrosion associated with this infrastructure can result in lead leaching into the water that passes through these systems. In D.C., for example, it is suspected that the high lead levels were caused by increased lead leachate leach·ate n. A product or solution formed by leaching, especially a solution containing contaminants picked up through the leaching of soil. associated with a switch from chlorine to chloramine chloramine: see hydrazine. for water treatment. Another source of human exposure less frequently considered is lead in soil. Soils may be contaminated with lead through any number of manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. , including incinerator and smelting operations that release lead into the air, disposal of demolition debris, or application of pesticides containing lead arsenate lead arsenate n. A poisonous white crystalline compound, Pb3(AsO4)2, used in insecticides and herbicides. Noun 1. . Soils also may have become contaminated as a result of auto exhaust emissions during years when leaded gasoline was still sold in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Because of its widespread historical use, lead is commonly identified in soils associated with former manufacturing facilities being redeveloped as Brownfields sites. These exposure pathways share a ubiquity - they occur in various aspects of our ambient environment. Potential Health Effects of Lead Exposure The United States Department of Health and Human Services United States Department of Health and Human Services (USDHHS), n.pr a cabinet-level government organization comprising 12 agencies, including the Food and Drug Administration and the Centers for Disease Control and Prevention. has called lead poisoning lead poisoning or plumbism (plŭm`bĭz'əm), intoxication of the system by organic compounds containing lead. "the number one environmental threat to the health of children in the United States." Children under six years old are perceived to be at greater risk of health hazards from exposure because of their undeveloped blood-brain barrier blood-brain barrier n. Abbr. BBB A physiological mechanism that alters the permeability of brain capillaries so that some substances, such as certain drugs, are prevented from entering brain tissue, while other substances are allowed to . In children, harm attributed to lead poisoning may include damage to the brain and nervous system, behavioral and learning problems, slowed growth, and hearing difficulties. While children are customarily the focus of the lead-exposure debate, adults also may be affected. Conditions attributed to lead in adults include high blood pressure, reproductive problems, nerve disorders and kidney problems. In short, whether in residential or commercial buildings, exposure to lead poses the specter of personal injuries and, consequently, increased risk of both regulatory sanctions and civil litigation. Federal Regulation of Lead Currently, federal law concerning lead exposure focuses on residential properties (with respect to lead paint) and public drinking water systems. Under the federal Residential Lead-Based Paint Hazard Reduction Act of 1992 ("Title X"), a landlord must disclose and provide information on any known lead paint on the property, as well as give a tenant an EPA-approved pamphlet, before signing or renewing a rental agreement A rental agreement is a contract, usually written, between the owner of a property and a renter who desires to have temporary possession of the property. As a minimum, the agreement identifies the parties, the property, the term of the rental, and the amount of rent for the term. . Certain buildings are exempt, including post-1978 construction, lead-free certified property, and short term rentals. Title X does not apply to commercial property owners, with the result that little practical guidance exists for commercial property owners seeking to address lead conditions on their properties. While the focus of Title X is on lead paint, EPA's implementing regulations (at 40 CFR CFR See: Cost and Freight Part 745) address "lead-based-paint hazards," which are defined to include residential dust and soil. Under this broader heading of "lead-based paint hazards," EPA has instituted training requirements for lead abatement workers, established the parameters for state-led programs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc lead exposure and remediation, and provided standards generally for "dangerous levels of lead." Importantly, in promulgating these regulations, EPA acknowledged that considerable confusion exists with respect to the scope and applicability of federal regulation - confusion that has not been substantially ameliorated despite EPA's rulemaking efforts. The federal Safe Drinking Water Act The Safe Drinking Water Act (SDWA) is a United States federal law passed by the U.S. Congress on December 16, 1974. It is the main federal law that ensures safe drinking water for Americans. ("SDWA SDWA Safe Drinking Water Act of 1974 SDWA System Diagnostic Work Area (IBM) SDWA Sun Data Warehouse Appliance ") requires, as pertinent here, that operators of public water systems regularly monitor and take action to reduce lead in drinking water. In 1991, EPA promulgated prom·ul·gate tr.v. prom·ul·gat·ed, prom·ul·gat·ing, prom·ul·gates 1. To make known (a decree, for example) by public declaration; announce officially. See Synonyms at announce. 2. maximum contaminant level Maximum Contaminant Levels are standards that are set by the United States Environmental Protection Agency (EPA) for drinking water quality. A Maximum Contaminant Level (MCL) is the legal threshold limit on the amount of a hazardous substance that is allowed in drinking water under goals ("MCLGs") for lead (56 FR 26460, June 7, 1991). EPA's regulations implementing the Act are designed to reduce lead levels at consumers' taps to as close to the MCLGs as feasible. EPA has set a treatment standard of 15 parts per billion for lead in tap water. As a result, if lead levels are higher than 15 ppb in over 10% of tap water samples, further testing and possible remedial action A remedial action is a change made to a nonconforming product or service to address the deficiency. Rework and repair are generally the remedial actions taken on products, while services usually require additional services to be performed to ensure satisfaction. must be taken by the water-system operator. Remedial action may include treatment of source water, if it is found to contribute significantly to high levels of lead at the tap, and replacement of lead service lines in the distribution system, if the level of lead at the tap continues to exceed the lead levels. Water-system operators also must perform public education when the level of lead at the tap exceeds the lead action level. Again, however, these SDWA requirements do not apply to property owners, whether commercial or residential, except in limited circumstances involving the operation of certain qualifying water systems. In addition, the SDWA proscribes the use of any pipe, any pipe or plumbing fixture in any public water system providing water for human consumption that is not "lead free," which includes solders and flux of no more than 0.2% lead, and pipes, pipe fittings, and well pumps of no more than 8.0% lead. These requirements may apply to developers and certain property owners, including commercial property owners, insomuch as in·so·much as conj. 1. To such extent or degree as. 2. Inasmuch as; since. they are responsible for the lead content of internal building plumbing. Practical Steps for Property Owners The patchwork of relatively recent federal regulation relating to lead conditions, most of which is not directed at commercial buildings, is not a model of clarity and does not provide ready guidance to owners and managers of commercial property. We do not suggest that EPA undertake additional regulation. We do suggest that owners and managers develop their own programs, tailored to the circumstances presented in their specific properties, including consideration of, for example, existing and historical land use, age and construction of buildings and services, drinking water supply and configuration, and other site-specific factors. To guide development of these propertyspecific programs, following is a framework for addressing lead conditions in a manner consonant with applicable regulatory standards and evolving principles of tort law A body of rights, obligations, and remedies that is applied by courts in civil proceedings to provide relief for persons who have suffered harm from the wrongful acts of others. . A primer on tort liability is in order. Lead-exposure claims typically involve allegations that a plaintiff suffered exposure to lead, and some purported harm, as a result of a defendant's negligence. In the context of premises liability, where the action is brought against a property owner or manager, a plaintiff ordinarily will allege a breach of some common law duty requiring "reasonable care under all circumstances" to all persons lawfully on the premises. This so-called "reasonable care" standard may include a duty to warn duty to warn AIDS A legal concept indicating that a health care provider who learns that an HIV-infected Pt is likely to transmit the virus to another identifiable person must take steps to warn that person about dangerous conditions that a property owner or manager should have discovered in the exercise of ordinary care. The standard also may include a duty to remedy unsafe conditions. Thus, if a property owner or manager neglects its duty to maintain a building in a reasonably safe condition, and someone lawfully on the premises is harmed as a result, that owner or manager may face liability for a breach of its legal duty. Plaintiffs must show that this breach of duty directly led to the harm suffered from lead exposure. Elevated lead levels in the blood, or at least evidence that the plaintiff was exposed to and then experienced symptoms medically attributable to lead, are usually required as proof. Based on these general negligence concepts, key considerations for commercial property owners and managers are appropriate notification and handling of lead conditions that may affect tenants. When owners or managers have knowledge - or a reasonable basis to suspect - that lead may exist at a property, they should consider providing notice of the potential hazard. Because premises liability potentially extends to all individuals lawfully (and even unlawfully in limited circumstances) on one's premises, tenants, contractors and members of the invited public should be considered in any notice of lead-exposure risks. In considering any notice requirement, owners and managers undoubtedly will wonder: "How am I supposed to know if there is a risk of lead exposure in the building?" With respect to potential lead paint, we have identified no affirmative obligation Affirmative Obligation An obligation of NYSE specialists to enter the market on a particular security (either by posting or bidding and ask) when there is not sufficient market demand and supply to efficiently match orders. to test for the presence of lead in commercial properties in the absence of construction or demolition activities. However, federal regulations suggest a presumption of lead presence in pre-1978 residential construction. Though expressly not applicable to commercial buildings, the presumption may nonetheless inform judgments concerning appropriate standards of care Standards of care are medical or psychological treatment guidelines, and can be general or specific. They specify appropriate treatment protocols based on scientific evidence, and collaboration between medical and/or psychological professionals involved in the treatment of a given in the commercial context. As a result, notice in commercial leases and transaction disclosures may weigh in favor of the disclosing party, if its "reasonableness" were ever challenged, and therefore may be prudent. With respect to drinking water, a property owner or manager ordinarily does not have an obligation to test the water for lead. Given information that old plumbing systems or other conditions in a particular building may pose a risk of lead exposure, however, prudence may dictate that property owners and managers conduct their own testing. More often, media reports concerning elevated lead levels in public drinking supplies may induce tenants to lobby for testing. In turn, adverse testing results, or readily apparent conditions indicating that elevated lead levels very likely may be present in drinking water, may trigger further notice requirements and other protective measures, as described below. Not all notice is alike. The District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). water controversy arose, in part, because of perceived failures to make the public aware of elevated levels in the drinking water. Given the seeming omniscience Omniscience Ea shrewd god; knew everything in advance. [Babylonian Myth.: Gilgamesh] God knows all: past, present, and future. of the media today, we encourage property owners and managers to promptly provide honest, accurate and comprehensive information before tenants acquire potentially incorrect and inflammatory information from other sources. Drinking water testing typically targets "worst case" conditions - e.g., faucets and fountains likely used for drinking water or food preparation are sampled early or late in the day when they have not recently been used and the water has been allowed to sit in the piping system for some time. Based on the results, interim or long-term remedies can be implemented. Short-term measures include instituting daily maintenance programs to flush out the piping before it is used, eliminating use of the system for potable potable /pot·a·ble/ (po´tah-b'l) fit to drink. po·ta·ble adj. Fit to drink; drinkable. potable fit to drink. water and providing bottled water instead, or installing corrosion controls or "end of pipe" filtration devices. On a more permanent level, the water supplier may be persuaded to improve the quality of the water - either by reducing lead concentrations at the source or eliminating chemicals causing increased lead leachate - or the building owner may be able to replace pipes or components in the system. Follow-up testing ordinarily is performed periodically to ensure that remedial measures are successful. Rather than addressing these issues separately and in times of crisis, building owners and managers should adopt global procedures for evaluating and communicating potential lead hazards. These procedures should include, for example, an appraisal of the likelihood and potential sources of lead exposure in each building, and depending on the results of that evaluation, procedures for determining when and what to test, how and to whom to provide notice, and risk management steps to be undertaken to minimize exposure. For investors, similar procedures also should be adopted to guide diligence and evaluate risks, particularly in large portfolios containing many older properties. Insurance Considerations In conjunction with any lead condition, property owners and managers should not presume that insurance coverage will be available. Heringer v. American Family Mutual Insurance Co., a recent decision by a Missouri Court of Appeals, affirmed a trial court's decision that injuries resulting from the inhalation, ingestion or absorption of lead paint were excluded from coverage by a policy's pollution exclusion. The plaintiff in Heringer suffered harm from lead-paint exposure while working as an independent contractor A person who contracts to do work for another person according to his or her own processes and methods; the contractor is not subject to another's control except for what is specified in a mutually binding agreement for a specific job. on a home-renovation project. After the homeowners settled with the plaintiff for $1 million, she filed a garnishment garnishment, in law, means of requiring a third party who holds a debt (including wages) due a defendant to retain the property temporarily. The garnishment consists of a warning, in the form of a judgment, to the third party, called the garnishee, not to deliver the action against the insurers to partially satisfy her judgment. The court found that there was no coverage because of the exclusion. In the policy, injury arising out of the ingestion, inhalation or absorption of pollutants was excluded, and the definition of pollutants expressly included lead. Thus, Heringer illustrates the importance of a careful examination of existing insurance coverage to ensure against unforeseen exclusions. If lead is not explicitly defined as one of the exclusions, then it may be included in the coverage, as the Massachusetts Supreme Court found in Atlantic Mutual Insurance Co. v. McFadden. Conclusion In summation, commercial property developers, investors, owners and managers may find shelter from lead exposure liability in the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. of reasonable action. This includes investigation of suspected lead exposure pathways, notice of known lead exposure risks, and remediation of lead contamination. If a claim is brought, a wellstructured and implemented program may help to establish that an owner acted reasonably and did not breach any duty owed to the plaintiff. With regard to individual and portfolio acquisitions, the assessment of lead exposure risk should be incorporated into due-diligence protocols, and insurance policies should be reviewed to determine coverage for lead-exposure claims. Goodwin Procter LLP LLP - Lower Layer Protocol is one of the nation's leading law firms, with a team of 650 attorneys and offices in Boston, New York Boston is a town in Erie County, New York, United States. The population was 7,897 at the 2000 census. The town is named after Boston, Massachusetts. The Town of Boston is an interior town of the county and one of the county's "Southtowns. and Washington, D.C. The firm combines in-depth legal knowledge with practical business experience to deliver innovative solutions to complex legal problems. We provide litigation, corporate law and real estate services to clients ranging from start-up companies to Fortune 500 multinationals, with a focus on matters involving private equity, technology companies, real estate capital markets, financial services, intellectual property and products liability. This article, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin Procter LLP or its attorneys. [c] 2005 Goodwin Procter LLP. All rights reserved. Ms Elise Zoli Goodwin Procter LLP Exchange Place Boston MA 02109 UNITED STATES Tel: 6175701000 Fax: 6175231231 E-mail: Jtrillos-decarie@goodwinprocter.com URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : www.goodwinprocter.com Click Here for related articles (c) Mondaq Ltd, 2005 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com |
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