Major Changes in 2020-21 Lead Paint Liability Pursuant to Local Law One for New York City Landlords
In general, residential landlords have a common-law warranty of habitability to all of their tenants, regardless of any lease provisions to the contrary. This means that that premises are free from hidden or trap like dangerous defects that would endanger the health or well-being of any of the tenants. Lead paint is a hazardous and hidden defect that can give rise to liability to the tenant for any resulting injury or property damage pursuant to the warranty of habitability.
At common law, the tenant has the burden of proving that the landlord had notice of the condition and failed to correct the condition within a reasonable time period. Andrade v. Wong, 251 A.D.2d 609, 675 N.Y.S.2d 112 (2nd Dep’t 1998). Accord Batista v. Mohabir, 291 A.D.2d 365, 737 N.Y.S.2d 117 (2nd Dep’t 2002); Haider v. Rahim, 273 A.D.2d 442, 711 N.Y.S.2d 751(2nd Dep’t 2000); Perez v. Ward, 271 A.D.2d 590, 706 N.Y.S.2d 160 (2nd Dep’t 2000). A landlord cannot be held liable in a lead paint personal injury suit if the landlord had no knowledge of a dangerous condition. Chapman v. Silber, 97 N.Y.2d 9, 734 N.Y.S.2d 541 (2001); Kimball v. Normandeau, 132 A.D.3d 1340, 18 N.Y.S.3d 237 (4th Dep’t 2015). That is still the law for dwellings outside of New York City although the courts have made it easier to prove notice constructively. See Chapman, infra. However, New York City enacted a “Local Law One”, NYC Admin Code § 27-20565.1 et seq. in 2004 which dramatically changed the law for lead paint liability and the City quietly made substantial changes to that law in 2019 and 2020 greatly expanding landlord liability.
Lead based paint was commonly available and used in all types of house paints, both interior and exterior, prior to 1970 when lead paint was effectively banned in the United States. The lead was used to stabilize the paint and was considered by most to be better quality paint. Exterior paints were often designed to be ablative; that is, gradually shed the most exterior layer of paint by fine dust to give the outside of the house a freshly painted look. This naturally resulted in lead dust accumulating in the gardens and soil adjacent to the outside of the home. Although interior paint was not ablative, all paint will shed to fine dust as it becomes worn, and the dust will settle because of the heavy elemental weight of lead and end up on the floors, other horizontal surfaces such as sills, and in the carpet. Certain areas of the interior are subject to much more use and friction and as a result the paint tends to wear out more quickly. Windows (particularly sash windows) and sills, doors and hinges, moldings, painted floors, painted radiators, painted cabinets, and the lower levels of walls in active rooms that people tend to touch, all are particular areas of concern. Almost five decades after lead paint was last sold, lead paint still persists in much of the housing stock in New York City and its suburbs, although it may be covered by subsequent layers of paint. Paint peels, so lead paint “encapsulated” by subsequent layers of non-lead paint is not a safe or acceptable form of abatement.
In the sixties and seventies, health experts were primarily concerned with “Pica” which is the behavior of young children eating peeling paint chips. In practice, that has turned out to be less common than initially thought. Most experts currently believe that the greatest risk to health is lead paint dust which is not usually visible to the naked eye but easily picked up by toddlers and crawling children with common hand-to-mouth activity. Dust does not necessarily require peeling paint, so it is difficult to detect unless it is carefully checked for by an expert. Dust can also be controlled by fastidious housekeepers, especially by damp mopping, but sweeping and vacuuming can exacerbate the contamination and the hazard by causing the dust to become airborne.
In the bloodstream, lead can bind to receptors that are intended for iron and commonly cause children to become anemic. Indeed, many doctors use iron tests as a quick method to determine if the child needs to be tested specifically for lead. Current law requires all children to be tested for blood lead prior to entry into any school or day care program. In practice, many doctors test children much sooner if they are high risk, such as children that live in older impoverished areas, impoverished families or families that move often and have resided in shelters. In my practice, I have seen blood lead contamination in four-month-old infants (children are not born with any lead in their blood or body).
The level of lead in the blood that is “the threshold of concern” is a hotly debated and constantly evolving issue. At present, the Center for Disease Control (CDC) sets the level at five (5) ugms/dl (micrograms per deciliter) for blood lead poisoning. That is, five one thousandths of a gram of lead per tenth of a liter of blood. New York state law and New York City law has been amended to be consistent with the CDC recommendations. For many years, the CDC used ten ugms/dl, and for years before that, twenty-five ugms/dl. Many experts believe that the lower limits are far too conservative and the result of active lobbying by the plaintiffs’ personal injury bar, but New York courts have held that any level of blood lead is dangerous, even less than five, even if it is not “poisoning” within the definition of the CDC (this is a position that is consistent with the court’s (and plaintiffs’ bar) position in asbestos cases – even one dust particle of asbestos is hazardous). Peri v City of New York, 11 N.Y.3d 756, 864 N.Y.S.2d 802 (2008), aff’g 44 A.D.3d 526, 843 N.Y.S.2d 618 (1st Dep’t 2008). Indeed, experts have pointed out that prior to the elimination of leaded gasoline which was phased out starting in 1970 but not formally banned in on the road vehicles until 1996, the air breathed in most urban areas likely resulted in blood lead levels of twenty-five ugms/dl or more.
The damage caused by typical blood lead levels in plaintiff children is also an area that is hotly contested and constantly evolving. There is no serious scientific dispute that “chronic” blood lead levels (50 ugms/dl or more for more than ten years) cause very serious health effects including loss of I.Q., hyperactivity, and generally shortened lives. The plaintiffs’ bar routinely asserts the same injuries for children which typically have much lower levels for a much shorter period (e.g. a “spike”) but there is no hard science that supports such extreme claims of injury. Commonly, the typical plaintiff has a spike in blood lead levels at less than twenty quickly followed by much lower levels decreasing below ten within a few months. Usually the plaintiff receives no pro-active medical treatment other than continued blood lead testing and iron vitamins if the child is anemic. Once the child’s blood lead level is below five, or the child is older than six, the doctor stops the tests. Considering that everyone older than fifty who lived in an urban area was exposed to lead paint and leaded gasoline and probably had blood lead levels of twenty-five or so, plaintiffs’ position means that we would all be smarter today if not for lead. Be that as it may, the New York Courts permit such testimony and leave it to the jury to determine.
Local Law One
New York City enacted the Childhood Lead Poisoning Prevention Act of 2003, NYC Admin Code § 27-2056.1 et seq [Local Law One eff. 2004] to address the notice issue on liability and to essentially force landlords to be pro-active about checking and abating lead paint. That law was substantially changed in 2020 greatly expanding landlord liability. While the language of Local Law One applies to multiple dwellings (legally defined as three or more apartments) in New York City, Local Law changed that definition for that statute only, effective 2021, to include any private residence where at least one unit is occupied (not necessarily rented) by someone other than the owner or the owner’s family. The statute presumes that all buildings constructed prior to 1960 contain lead paint. This is significant because it changes the common law requirement of notice of lead paint to the landlord. The landlord can provide proof to rebut this presumption and receive an exemption but the 2020 amendments sunset that exemption upon turnover of the unit; i.e. when the unit is vacated by the current tenant. In addition, Local Law One requires the landlord to take certain pro-active measures to check for children and keep records the 2020 amendments pout teeth into those provisions.
The landlord must inquire at lease commencement/renewal/turnover and annually if any children under age six reside in the unit . Reside is now defined as ten or more hours per week so the child does not have to be “living” in the unit full time. Indeed, it applies to children who visit but do not sleep in the unit. Thus, if Grandma watches the child for a few hours for a few days per week, the child is residing in the unit for purposes of the statute. The notice must be sent (in either English or Spanish) by January 16 of each new year. The landlord must also provide the tenant with a pamphlet about lead paint and should also inquire about window guards. Notice of the lead paint provisions also has to be included in the lease. The tenant must respond to the annual notice within twenty-one days or by February 15. If the answer changes during the year, the tenant is required to notify the landlord, but the landlord may still be on notice even if tenant fails to do so, if an employee or agent of the landlord observes the child in the apartment. Typically, plaintiffs claim that a porter saw the child or that the landlord’s agent saw the child when he/she came to collect rent. If the tenant fails to respond to the annual notice, the landlord must inspect the apartment for a child by March 1. If the landlord cannot obtain access to the apartment, the New York City Department of Health must be notified.
If a child under six is reported or found to be present, the landlord must inspect both the unit and all common areas for lead paint and notify the Department of Health if abatement of lead paint is required. Local Law One requires the landlord to keep records of all notices, responses, inspections and abatements for ten years. Management companies and agents have the same liability as the landlords. The latest amendments add substantial fines to landlords who fail to keep all the required records including the notices, pamphlets, abatement, and testing records, etc. Indeed, the City now mandates the Department of Housing Preservation and Development (“HPD”) to conduct at least 200 random audits each year of landlords.
Water contamination of lead is presently a very significant concern as a result of the crisis in Flint, Michigan. Historically, lead may have been used in pipes or in the welding of the pipes. New York City water is provided by upstate reservoirs and considered by most experts to be among the best local water supplies in the world. It is very unlikely that the source of any lead that is found in New York City water is from the supply, unlike the situation in Flint. Water should be tested for lead in older buildings because of the concern of lead in the local pipes. If it is found in the water, then the pipes should be tested and replaced.
The latest amendments to Local Law One specify standards for lead contamination and abatement. Testing must be done by EPA certified workers and the tenants and the Department of Health must be notified of the results. As previously mentioned, the tenants must be protected during the actual abatement work. Landlords should always carefully vet their contractors and proceed with documented EPA licensed and insured vendors, and maintain copies of the credentials. I have been involved in lawsuits in which the contractor that was hired by a County was not properly trained or licensed and likely made the lead paint situation worse. Proper abatement of lead paint is not the same thing as preparing and painting an apartment. The time period to abate a lead violation is relatively short and failure to quickly act can cause substantial penalties and also substantially increase personal injury liability.
Lead paint must be tested by use of an x-ray fluorescence (XRF) machine. This machine looks like a gun and is held point blank to the wall/surface and uses light waves to see if lead paint is buried beneath the surface layer of paint. Any reading above one requires abatement and will result in an HPD or DOH violation. Some types of final testing must be done using dust wipes which only measure surface dust. The results must be sent to an independent lab for analysis. The same tests must be done in common areas.
The landlord is responsible under the law for the safety of the tenants while the apartment is abated. Children should never be permitted to be present at the actual abatement location. The best solution is to relocate the tenants temporarily, even in a hotel if that is all that is available.
Local Law One also has a “turnover” provision pertaining to landlords who acquire a building that was constructed prior to 1960 (or a building where the purchaser knows there is lead paint). The landlord must check and abate lead paint in any apartment where there is a vacancy regardless of whether children were present or will be present in the future. This short provision imposes the duty on the purchaser to abate the lead paint hazard but does not provide a time period to do so. The presumption in law when time period is omitted is a “reasonable time”. The turnover provision has not been tested by the courts at this time, but the law essentially codifies “buyer beware” for purchasers of multiple dwellings in New York City who could be immediately ambushed by lawsuits by acquiring neglected buildings. The new amendments to the statute add an additional fine if the apartment is found to have lead paint and there has been turnover since 2004; a fact that would likely apply to virtually every apartment.
In most cases, since the mid to late 1990s, liability insurers have expressly excluded any coverage for lead claims. There may be coverage for lead hazards pursuant to some umbrella insurance policies even though the primary policy excluded the risk. In the case where umbrella liability policies provide coverage for lead paint claims, they will “drop down” to defend the insured if the primary insurer disclaims coverage. There are some that offer limited ($250,000) claims-made policies for landlords usually on the condition that the landlord can demonstrate that it has already checked for and abated any lead paint hazards on the premises.
In general, a landlord is the easiest target for liability, and there is usually no insurance coverage for lead paint liability. Accordingly, landlords are well advised to do all of the following even if they are not in New York City:
- Never own leased property or a management company of property in your own name. A corporate entity, “C” Corp., “S” Corp, LLC etc. depending on your accountant’s recommendations should always be the landlord or management. Otherwise you are placing all of your personal assets at risk. Once you form the corporate entity and it has title to the land etc., make sure you maintain the legal and accounting boundaries of the company. Rent checks should be payable to the company, not to you certainly and not to “cash”. Receipts for cash should be to the tenant of record and from the company. Bank accounts should never be commingled. You can pay distributions to your shareholders like any other company as long as they are clearly accounted for as such. Salaries of course can also be paid to employees as long as the employees receive W2s for their salaries. All leases, notices, correspondence etc., should be from the company.
- Use a different corporate entity for each different property. Otherwise, you are placing your other assets at risk if one building has an issue. Keep the bank accounts and all accounting separate as discussed above.
- The New York City law already requires landlords to test for lead paint if there is a child under age six in the apartment. The turnover provision requires that upon a vacancy, the landlord must inspect and abate the apartment for lead paint regardless of whether children were there or are eventually the tenants. This is a smart thing to do even if the building is not in New York City. The quicker you get rid of the lead paint permanently, the lesser your risk. Tenants are notorious for children suddenly appearing even when they assert there will not be any children.
- If you do discover lead paint while there is a tenant with children present, attempt to immediately relocate them to a lead-free apartment while their own apartment is abated.
- Certain building improvements are particularly recommended to avoid future lead paint issues even if they don’t test positive for lead paint at the time. Sash windows and sills, floor level moldings and chair rails, old wooden doors and moldings and old painted radiators are all notorious for lead paint. Replacement of these items is usually very simple and quick for an experienced contractor and may well result in energy efficiencies and cosmetic improvements for the tenant.
- Check the common areas of your building for lead paint, asbestos and mold as soon as possible.
- Beware that purchasing an old building will immediately make you liable for old lead paint, mold, and asbestos contamination. Have a licensed contractor check the building carefully for lead paint before you agree to purchase. If the buyer will not let you check, for example if the building is in bankruptcy, I would advise you to walk away from the deal.
- If you perform an abatement of the entire building, check into liability coverage for lead paint . Several insurers offer limited (up to $250,000 usually) coverage for abated buildings. The biggest value of these policies is that they provide for an unlimited defense. That is, they will pay for the attorney to defend you if you are sued for lead paint poisoning and such defense can be quite expensive, exceeding six figures.
- Keep careful records of everything pertaining to tenants or lead paint and notices for at least ten years, regardless of whether you are in New York City.
- Respond promptly, within ten days to any notices of violation, regardless of the jurisdiction.