Lead-based paint due diligence for a Michigan IRA rental

An old house is not automatically a lead problem, and fresh paint is not proof that it is clear of one. For housing built before 1978, the useful questions are more concrete: What is known about the painted surfaces? Has the property been tested? Are any surfaces deteriorating? What work has been done, and who did it?

Those questions belong in the purchase review for any older rental. They need extra coordination when a self-directed IRA is buying because inspections, contractor invoices, repairs, and later maintenance have to fit the account's payment process. Lead compliance and IRA compliance are separate subjects. The closing schedule has to leave room for both.

Confirm the age before deciding the scope

Start by verifying the year the housing was built. Check the seller's records, local assessing and building files, prior title or appraisal materials, and any permits that show when additions were constructed. A parcel record is a useful lead, but an uncertain or approximate year should stay marked as uncertain until the buyer's professionals decide how to handle it.

The federal ban on consumer use of lead-based paint in housing took effect in 1978. EPA's disclosure rule covers most pre-1978 housing, with specific exemptions. Age is therefore an important screen, not a finding about one building. A 1920 house may have no lead hazard after proper work and testing. A well-kept 1970 building may still contain lead-based paint beneath newer coatings.

• Construction year and dates of additions or major alterations
• Seller disclosures and every available lead report or laboratory result
• Renovation permits, scopes, invoices, clearance records, and contractor information
• Maintenance records for peeling, chalking, cracking, water intrusion, windows, doors, porches, and exterior trim
• Tenant notices or repair requests related to paint, dust, or damaged surfaces, reviewed with appropriate privacy protections

Treat disclosure as the start of the review

EPA says that, before a buyer signs a contract for most pre-1978 housing, the seller must provide the federal lead pamphlet, disclose known lead-based paint and hazards, supply available records and reports, and include the required Lead Warning Statement. The rule also gives a homebuyer a 10-day opportunity to conduct a lead inspection or risk assessment unless the parties agree in writing to a different period or the buyer waives that opportunity.

A signed disclosure does not say that the property has been tested, and a seller's lack of knowledge is not a negative test result. Read the form beside the reports, repair history, and physical condition. If the packet refers to an attachment that is missing, ask for it. If an old report covered only one unit or one floor, do not quietly apply its conclusion to the whole building.

Contract timing matters here. The standard federal opportunity may not be enough for access, certified professional scheduling, sampling, laboratory work, a written report, repair estimates, legal review, and custodian approval. The buyer's Michigan attorney and real estate professionals should write the inspection right and response options for the actual transaction rather than rely on a deadline no one can meet.

Choose the test that answers the real question

EPA draws a useful distinction between an inspection and a risk assessment. A lead-based paint inspection identifies whether lead-based paint is present and where it is located. It does not determine whether the building currently has a lead hazard or how to address one. A risk assessment looks for lead hazards from paint, dust, or soil and recommends actions to address identified hazards.

That difference changes the scope. A buyer who needs to know whether lead-based paint exists is asking one question. A buyer evaluating deteriorated windows, dust, bare soil, or a planned renovation is asking another. Ask a properly certified lead professional which service fits the property, intended work, legal requirements, and decision deadline. An ordinary home inspection does not replace specialized lead work unless the inspector has the required credentials and performs the appropriate scope.

Review the resulting report rather than searching for a one-word pass or fail. Match findings to units, rooms, building components, common areas, exterior surfaces, and soil locations. Note any inaccessible area or limitation. If a report recommends follow-up, get that work defined and priced before assuming the issue is contained in a small allowance.

Separate repair work from permanent abatement

The words repair, renovation, and abatement should not be used interchangeably. EPA describes abatement as work designed to permanently address lead-based paint hazards. Renovation, Repair and Painting work may disturb painted surfaces without being an abatement project. The two programs can require different training, certifications, methods, records, and notifications.

EPA's RRP rule generally requires anyone paid to disturb painted surfaces in pre-1978 housing to work through a certified firm, with trained personnel using lead-safe practices. The rule expressly reaches rental housing. Before accepting a bid, verify the firm's current certification, the certified renovator assigned to the job, the work area and containment plan, cleaning and verification steps, occupant communications, disposal approach, schedule, and records the contractor will provide.

Do not reduce the review to painting over a damaged area. EPA notes that ordinary paint over a hazard is not permanent abatement. Water leaks, friction at doors and windows, failed exterior coatings, and damaged substrates may need to be addressed for the work to hold up. The qualified lead professional and contractor should explain what the proposed scope does, what it does not do, and what maintenance will remain after completion.

Price the work without borrowing a number

A lead-related budget is property-specific. Access, occupied units, the number and condition of components, exterior height, containment, testing, temporary relocation if required, permits, disposal, clearance work, and repairs to the underlying building can all affect cost and timing. Get written scopes that cover the same work before comparing bids. A low price may simply omit a task included by another contractor.

Put the findings beside the rest of the building review. Replacing windows may affect trim, siding, interior finishes, and tenant access. Repairing exterior paint may uncover wood damage or drainage problems. If the work depends on a vacant unit or favorable weather, the budget and schedule should say so. Do not offset a known cost with assumed rent, full occupancy, appreciation, or a future refinance. None of those outcomes is guaranteed.

Plan for tenants and ongoing records

Lead responsibilities do not end at closing. For covered pre-1978 rentals, the landlord or property manager needs a repeatable process for federal disclosures before leases are signed, delivery of required materials, retention of records, paint-condition complaints, maintenance, renovation notices, certified contractors, and follow-up. Have Michigan counsel identify any state or local requirements that also apply to the property and proposed work.

Tenant access, notices, temporary arrangements, repairs, and leasing practices must also comply with the Fair Housing Act and applicable Michigan and local protections. Lead safety should be handled from property condition, documented hazards, and qualified professional recommendations. It should never become a reason to screen, steer, or treat people differently because of race, color, national origin, religion, sex, familial status, disability, or another protected characteristic.

Keep the work inside the IRA's process

Ask the self-directed IRA custodian how inspection fees, laboratory charges, contractor deposits, repairs, permits, tenant-related costs, and later maintenance must be approved and paid. Confirm the purchaser name and signature procedure before the offer. If the seller will complete work before closing, the purchase agreement should define the scope, credentials, access, documentation, and buyer verification with advice from the buyer's attorney and lead professional.

Do not assume the IRA owner can scrape paint, collect dust samples, perform repairs, hire a disqualified person, or pay a contractor from a personal account. The IRS lists furnishing goods or services between a plan and a disqualified person among prohibited transactions and identifies personal use of IRA property as a concern. The answer for a specific task, person, or payment belongs with the custodian, CPA, and attorney before anyone acts.

This article is educational, not legal, tax, financial, environmental, health, fair-housing, retirement-plan, or investment advice. No property, inspection, contractor, ownership structure, or strategy is approved or endorsed by the IRS. Have your own self-directed IRA custodian, CPA, Michigan attorney, certified lead professional, contractor, property manager, insurer, local authorities, and other qualified advisors review the account, property, reports, and proposed work before taking action.

Leave the decision in one property file

Keep the age documentation, signed disclosures, pamphlet acknowledgments, inspection or risk-assessment reports, sampling results, contractor certifications, scopes, estimates, permits, renovation notices, invoices, cleaning or clearance records, tenant communications, photographs, custodian instructions, and closing documents together. Add a short list of surfaces that require monitoring and the person responsible for responding when a problem is reported.

Primary sources for this review include EPA's Real Estate Disclosures about Potential Lead Hazards page, Lead Abatement, Inspection and Risk Assessment guidance, and Renovation, Repair and Painting Program; Michigan's Mi Lead Safe resources; and the IRS prohibited-transaction guidance. They provide the general framework. Property-specific conclusions come from current reports, the applicable authorities, and the buyer's own qualified advisors.

Rennie can help identify older rental property in West Michigan and coordinate the real estate records, professional access, and offer deadlines. Lead findings, repair methods, legal duties, and retirement-account decisions stay with the buyer's own qualified professionals.