Industry braces for lead law impact.

The real estate industry is bracing itself for the impact of the city's lead paint law that went into affect last week.

The new law dramatically changes and expands upon the owner's obligations set forth under "Local Law 38 of 1999." Significant changes include: 1) an increase in the age limit from six to seven years old where inspections are required to take place, 2) a greater responsibility on the owner to determine if a child under seven is residing in the unit, 3) stricter requirements for identifying and reducing lead hazards, 4) less time to correct violations issued by HPD, and 5) the opportunity to obtain tax benefits through J-51 Tax abatements, according to Josh Sarett a principal at ALC Environmental Inc.

The new law affects all multi-family properties built prior to 1960. The regulation affects not only the apartment units, but the common areas and public spaces as well. Owners will be responsible to get yearly written notification from their tenants as to whether a child under seven years old is living there, said Sarett.

Building owners are already feeling the financial pinch and are arming themselves with training on the law and removal process.

The New York Association of Realty Managers' executive director, Margie Russell reports that, "There is much concern as to who is responsible for what and in particular, which areas of which types of properties are exempt or not. Now that the rules and regulations have been released the details need to be broken down, studied and applied immediately."

The NYARM Code of Ethics Article VII speaks to the importance of taking this issue seriously. It states, a 'manager has a duty to tenants and to the public to protect safety and obey the law. Notwithstanding his duty of loyalty to the owner, the manager should always consider the safety and welfare of tenants and the public, even beyond the concerns of the owner's manager shall not knowingly act in violation of any applicable law or regulation, or assist Owner to evade any applicable law or regulation."

NYARM is sponsoring Lead Poisoning Prevention Day on August 25 and will address management's issues. Information can be found at www.nyarm.org.

Nick LaPorte, Jr., executive director of Associated Builders and Owners of Greater New York, said "First tenants are going to be at a higher risk because of lead dust. Number two, a lot more small property owners are going to abandon their buildings because they can't afford the insurance and building maintenance to meet the requirements."

ABO is currently conducting training of building personnel to certify workers to adhere to the lead paint law.

"It will cost building owner and property managers thousands of dollars to do training to certify workers to do the work," added LaPorte.

Many in the industry agree financial burdens of the law will have an impact.

"The sad, but very real fact remains, that any additional financial burdens placed on the real estate industry, can have a devastating effect," said Adelaide Polsinelli, of Besen & Associates.

"One of the biggest problems in New York City today, is the fact that there is a housing shortage. Any form of artificial control on this sensitive market is likely to cause a further, inevitable, imbalance. A decrease in supply will cause an increase in rents. Owners of real estate will be forced to spend their already crimped bottom-line dollars shadow-boxing with lead based paint litigations. Instead of rehabilitating, they will be forced to deploy their dollars in court dealing with a demon that may not even exist."

However, the city insists child safety is in danger and law will help to alleviate that danger.

"Childhood lead poisoning is a preventable tragedy. Over the past decade we have seen a significant reduction in new lead poisoning cases, but unacceptably high rates persist in some neighborhoods," said Health Commissioner Thomas R. Frieden, MD, MPH in a city press release last week. "Preventing elevated blood lead levels is key. Landlords are required to remove lead hazards from homes where young children live, and parents are advised to call 311 if this does not occur."

Fighting back is the Rent Stabilization Association that filed a lawsuit filed in State Supreme Court by the Rent Stabilization Association on April 9, 2004, challenging the validity of the new lead paint law. RSA was joined in the lawsuit by the Community Housing Improvement Program, the Bronx Realty Advisory Board, Associated Builders of New York and entities owning individual properties.

In the lawsuit, RSA contends the City Council violated the State Environmental Quality Review Act by failing to prepare an Environmental Impact Statement prior to the adoption of Local Law 1. The Court of Appeals decision to invalidate the previous lead paint law, Local Law 38, was based on the failure of the Council to prepare an Environmental Impact Statement, according to the lawsuit.