The Anniversary of the EPA’s Lead-Based Paint Ruling – a Reflection of the Impact to our Remodeling Business
Last Friday, April 22, 2011, marked the one-year anniversary of the EPA's Lead Based Paint ruling. The year has passed quickly, and many residential and commercial remodelers have adjusted their business practices to ensure they are in compliance with the ruling. In this article, we will provide information on the ruling and how it has impacted our remodeling business practices and the bottom line.
Info on the Ruling: EPA Lead-Based Paint (http://www.epa.gov/lead/pubs/renovation.htm):
Common renovation activities like sanding, cutting, and demolition can create hazardous lead dust and chips by disturbing lead-based paint, which can be harmful to adults and children.
To protect against this risk, on April 22, 2008, EPA issued a rule requiring the use of lead-safe practices and other actions aimed at preventing lead poisoning. Under the rule, beginning April 22, 2010, contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.
EPA requires that firms performing renovation, repair, and painting projects that disturb lead-based paint in pre-1978 homes, child care facilities and schools be certified by EPA and that they use certified renovators who are trained by EPA-approved training providers to follow lead-safe work practices. Individuals can become certified renovators by taking an eight-hour training course from an EPA-approved training provider.
How Have We Changed?
When the ruling was announced our initial reaction was "how will this affect our business, and what processes do we need to implement to ensure we are operating in full compliance with the ruling?" Perhaps a more critical question was, “can we afford to continue to work on structures built before 1978, or should we focus only on structures built after 1978?” The Stonebridge Builders team elected to follow these steps to ensure we could protect our clients and our team, and remain in full compliance with the ruling:
1. During the bid process, determine the year that the project location was built: This may sound easy, especially when it comes to a residential remodel, because most homeowners know the year that their home was built. However, this information isn’t always readily available from clients who manage commercial buildings. Some of our business comes from remodeling apartment buildings, and the exact year of building is not always known by apartment leasing agents or community managers. With a little bit of research we found that we can easily locate any structure's birth date from the county records. The impact to our bottom line? More time spent in the bid process to research and confirm a project’s building date.
2. Update our contracts with lead-based paint clauses: There is one truth that can always be predicted: any time there are significant rulings affecting in the building industry, law firms see an uptick in their business. Our first reaction to this ruling was to call a few construction attorneys and determine what we needed to do to mitigate our contractual risk with this ruling. We received a few interesting responses. One attorney suggested including an addendum to our project agreements that included the building date of the project location, as well as direction on the ruling and how it would impact the project. Another attorney advised that we should always subcontract any lead-based paint mitigation work to a third party that specialized in the lead-based paint containment. Better yet, our risk was even further reduced if the client was willing to hire the lead-based paint containment company directly, instead of our company subcontracting to the firm. Because we were, and still are not, a company that focuses solely on lead-based paint containment, we decided to subcontract any mitigation work to a separate company that specialized in the containment. The impact to our bottom line? We had to spend money to consult with attorneys, and time to identify reputable lead-based paint containment companies that we could trust as subcontractors to perform the work.
3. Educate ourselves on the ruling and the lead-based paint containment process: As a general contractor, we know that we can’t be experts in all of the building trades. We aren’t master electricians or plumbers, and we know that we have to hire the right folks to perform these specialized tasks. However, as a general contractor, we have to be confident with how these tasks are performed by our subcontractors. Therefore, we need to know enough to be dangerous about any given trade. We elected to become trained by the EPA as a Certified Lead Renovator/Contractor. This certification enabled us to know exactly what steps were required for lead-based paint mitigation, and better manage the companies that we subcontract to do this work. The impact to our bottom line? Time and money spent on training and certification.
How Have Our Clients Changed?
Fortunately or unfortunately, human behavior is quite predictable, and when any change is introduced there can be upheaval and panic. But after a short time, the dust settles and we all establish a new normal. When the ruling was first introduced, there was a lot of discussion and education provided by trade associations and publications. Most commercial clients associated with larger companies were aware of the ruling and had questions about the impact to their projects. However, most residential clients were not aware of the ruling, and had to be educated on the incremental costs associated with containing the lead-based paint in their home renovations. These residential clients have therefore experienced more of a gap between their anticipated budget and actual bid price, resulting in smaller project scopes or delayed projects.