EPA Announces Lead Paint Enforcement Actions, Bed Bug Lawsuits, Tax Cuts And Jobs Act and Capital Gains Q&As

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CALIFORNIA ASSOCIATION OF REALTORS®

REALEGAL®

March 2018

  • EPA ANNOUNCES LEAD PAINT ENFORCEMENT ACTIONS
  • BED BUG LAWSUITS
  • TAX CUTS AND JOBS ACT and CAPITAL GAINS Q&As 

EPA Announces Lead Paint Enforcement Actions

The Environmental Protection Agency is serious about cleaning up lead paint. On March 12, the U.S. Environmental Protection Agency announced six settlements, totaling $287,000 and completed over the last year, regarding lead paint enforcement actions. Five of the settlements concerned the Renovation, Repair, and Paint Rule and involved four companies in California and one in Arizona.  The Renovation, Repair and Paint Rule requires certain notifications, certifications, work practices, and record keeping when making renovations to pre-1978 housing.  More information is available in the Q&A Lead-Based Renovation Rule.

The sixth settlement involved a California residential rental property firm for violation of the Real Estate Notification and Disclosure Rule, which requires that landlords, property managers, and real estate agents provide lead paint hazards notifications on pre-1978 housing.  C.A.R. members can easily comply with the rule by providing the form “Lead-Based Paint and Lead-Based Paint Hazards Disclosure, Acknowledgement and Addendum for Pre-1978 Housing Sales, Leases, or Rentals” (C.A.R. Form FLD) and the “ Protect Your Family From Lead in Your Home” pamphlet available in the zipForm® California E-Pubs library and included in the printed “Combined Hazards Booklet.”  More information is available in the Q&A Federal Lead-Based Pain Hazards Disclosures.

In the settlement, EPA’s Acting Regional Administrator for the Pacific Southwest said “Lead paint is one of the most common sources of lead poisoning in children. EPA’s diligent enforcement of federal lead paint laws is not only necessary to protect communities across the country, but also ensures those who break the law are held accountable.”  Click on the link above to see the EPA announcement.

Bed Bug Lawsuits

Bed bugs have been with us since time immemorial and lawsuits about bed bug infestations are not new.  However, two recent jury awards emphasize the exposure rental property owners face.  In one case involving a very large Los Angeles rental complex, the jury award the plaintiffs $3.5 million, and in the other, a hotel in Rancho Cucamonga, the jury awarded the plaintiffs $546,000. 

California law, Civil Code section 1954.600 through 1954.604 provides that a landlord may not show, rent or lease to a prospective tenant any unit that the landlord knows has a current bed bug infestation.  Additionally, the law requires that the landlord provide to all tenants by January 1, 2018, a notice containing certain information about bed bugs and the procedure for the tenant to report any infestations.  The C.A.R. Residential Lease, or Month to Month Rental Agreement (C.A.R. Form LR) was modified in June 2017 to provide that the landlord has no knowledge of any bed bug infestation and that the tenant acknowledges receipt of the required Bed Bug Disclosure (C.A.R. Form BBS).  More information about bed bugs can be found at the California Department of Public Health, “Bed Bugs”, and

Guidance for Property Owners and Tenants On The Control and Prevention of Bed Bug Infestations in California”, and 

at HUD “Guidelines on Addressing Infestations in HUD-insured and Assisted Multifamily Housing”.

Tax Cuts and Jobs Act (TCJA) and Capital Gains Q&As

As taxpayers are filing their 2017 taxes, they may want to start planning for their 2018 tax filings. The C.A.R. Member Legal Department has four Q&As that can help you understand the basics of the TCJA. 

  • The Tax Cuts and Jobs Cat- In Brief, discussing the provision of the TCJA perhaps most of interest to real estate professionals, such as SALT (state and local tax) and mortgage interest deductions, tax rates and personal and dependency exemptions, qualified business deductions, sale of a principal residence and capital gains exclusions, and 1031 exchanges.
  • The Tax Cuts and Jobs Act – Highlights and In Depth, providing, as the name implies, a more thorough discussion of the portions of the TCJA of interest to real estate professionals. This Q&A also gives examples of the application of the TCJA to certain taxpayer scenarios, comparing the differences between the prior law and the new law.
  • Tax Reform Law Chart: Prior Law vs. New Law, a side by side comparison of provisions of the TCJA of interest to real estate professions.
  • Capital Gains Tax. This Q&A has been revised to clarify that the required use and ownership period for the capital gains exclusion for the sale of a principal residence remains at two of the last five years.  It also was revised to reflect that only real property, and not personal property, qualifies for 1031 exchanges.

As always, the Q&As provide general information.  If you have specific questions about your tax situation, you should seek your own tax and legal counsel, and you should advise your clients to do so as well. 


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