RRP Enforcement: 7 Predictions
Frustrated by EPA’s general failure to enforce the RRP rule? You and more than 400,000 other professionals who’ve received certification training. Collectively, your biggest gripe involves the uneven-playing-field argument: Competitors that don’t following the rule maintain a pricing advantage by not having the training, overhead, material and labor costs that you do.
It will take time, but enforcement is on the way -- not because the EPA is consciously cracking down, but because the rule’s residual effects are building momentum. The seven catalysts enumerated below will lead to an increase in the number of violations that are reported and require action, either by the EPA or the states. If you are concerned about your costs of doing business now, I’m afraid that you haven’t seen anything yet.
1. From Delegated States, Stronger Enforcement
EPA has authorized nine states to administer their own RRP programs: Iowa, Kansas, Massachusetts, Mississippi, North Carolina, Oregon, Rhode Island, Utah and Wisconsin. Last month, when Massachusetts joined the list, the state’s regulations embraced not only the EPA-required “Certified Renovator” training, but also many OSHA-related considerations that the EPA’s RRP rule had omitted.
In a recent blog, RRP trainer and business coach Mark Paskell shared a story of a Massachusetts painter who was visited by a state safety inspector after a neighbor called the safety division with concerns about soil contamination on the painter’s project. The contractor was in compliance with the state RRP, and he made out fine, but the inspector left him with a message that he asked the contractor to share:
"Tell every contractor you know we're out there enforcing. Tell your friends, your neighbors, contractors you know, suppliers and trades. We are here and we will enforce the new law."
2. OSHA Will Be Watching
Speaking of OSHA, the RRP’s required work practices trigger new safety considerations, such as the risks of working on a surface covered with plastic. Of bigger concern should be “official” misinformation. For example, if you have employees, you could get into trouble with OSHA if you use the sample signage (required to be posted outside contained work areas) that is included in the EPA approved training manual. Per OSHA, you must also tell employees what these signs warn, and your signs must also instruct the employees not to smoke, eat, or drink in a work area assumed to contain lead.
Check out this article by Dick Hughes, of Excellence in Safety, for a list of other OSHA requirements left out of the RRP rule.
3. From Nervous Neighbors, Calls of Alarm
Public awareness of lead-paint risks remains low but is increasing -- but not necessarily in helpful ways. For instance, the EPA’s “public awareness” campaign warns people of the dangers of lead but does little to inform them about the RRP. In effect, it could frighten people while basically leaving them ignorant of their options.
Warning signs and barriers that the RRP requires being placed around containment areas are also raising concerns, and are likely to cause some people to react out of fear. As a result, I predict that contractors will be reported -- and face inspections -- even if they are fully compliant with the law.
4. Insurance Coverage: Harder to Get, More Expensive
Tom Messier, of Mason and Mason Insurance, tells me that insurance companies are finally becoming aware of the RRP rule. Insurance is all about risk, of course; the greater the risk, the higher the cost of insurance.
Tom predicts that existing policies will not be renewed unless contractors can show that their firms are certified and that they use certified renovators to oversee the work their company performs. Further, he predicts, insurance carriers will require proof of RRP compliance from not only the contractors they insure, but also from the trade partners those insured contractors work with. What’s more, he predicts that insurance carriers will ask to see completed copies of their insured contractors’ required RRP documentation.
5. Contractors and Trade Partners: Who’s in Charge?
Many contractors seeking to comply with the RRP rule say they’re having a hard time finding trade partners who are willing to operate in compliance. Likewise, some conscientious trade partners are finding they can no longer rely on a high volume of work from contractors who choose not to comply with the RRP. An electrician told me he was having problems finding any general contractors who were in compliance.
The liability risks of such relationships are massive. General contractors and their trade partners must agree on who will do what. If a trade partner or his employees are not RRP-certified, will the GC take on the responsibility of training and supervising the trade partner and his employees? If so, at what level of risk -- and will either business’s insurance company allow such a relationship in the future?
The finger-pointing will begin the very first time a fine is assessed for an RRP violation. At that time, one or both businesses will get serious about certification and compliance.
6. Property Values and Equity Will Drop
The good news -- for compliant contractors -- is that homebuyers, investors and real estate agents will help to raise awareness about lead and the RRP rule. The bad news is that such awareness will drive down the values of pre-1978 properties, as buyers become less willing to buy homes that may contain lead and the supply of those homes rises accordingly. In some areas, this could have the effect of lowering property values to the point that they’re worth no more than the land value, minus the cost of removing the original structure.
Real estate agents: still ignorant of the RRP’s additional risks, liabilities and costs? You’re about to walk into a hornet’s nest.
As a side note, realtors are dues-paying members of a single, well-funded and very powerful trade association that represents their interests. I predict that once a good number of agents understand how the RRP will affect their industry, their association will work to modify the rule in their favor. This could impact contractors in any number of ways, for better or worse.
7. For Lenders, New Considerations
Banks are realizing that the costs and liabilities related to RRP can dramatically increase their costs and risks -- not only on the foreclosed properties that they’re taking ownership of, but also in considering loans to people who want to buy or renovate pre-1978 properties. If these homes contain lead, the banks will reason, their values will be impacted.
Shawn McCadden founded, operated, and sold a
successful design/build company. A co-founder of the Residential
Design/Build Institute and former director of educaton for a national
K&B remodeling franchise, Shawn writes a monthly column for
REMODELING, speaks at industry events, and consults with remodeling
companies. Email him at firstname.lastname@example.org.
Visit his website at http://www.shawnmccadden.com/.
Click here to see Shawn's columns in REMODELING
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more REMODELING coverage of the EPA's Lead: Renovation, Repair, and
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