$1.15 Billion Lead Paint Ruling Will Have Devastating Effects On Residential Real Estate Market, Experts Say

 $1.15 Billion Lead Paint Ruling Will Have Devastating Effects On Residential
                       Real Estate Market, Experts Say

PR Newswire

LOS ANGELES, Jan. 9, 2014

LOS ANGELES, Jan. 9, 2014 /PRNewswire/ --A judge's sweeping ruling in a
residential lead-paint case threatens to send home values in a freefall
throughout Los Angeles County, causing a ripple effect that will result in
less money for schools, police services and other vital programs supported by
property taxes, a leading housing and real estate advocacy organization warns.

The dire outlook by the Los Angeles County Boards of Real Estate®, which
represents private property rights in Los Angeles County, comes in response to
yesterday's ruling by a Santa Clara County Superior Court judge that three
major companies pay $1.15 billion to remediate lead paint used in the interior
of homes built before 1978.

The final ruling by Judge James Kleinberg, affects about 2.6 million homes in
Los Angeles County and an estimated 5 million statewide.

Defendants ConAgra Grocery Products Co., NL Industries Inc. and
Sherwin-Williams Co. are expected to appeal the ruling, which marked the
culmination of 13 years of legal wrangling. Two other co-defendants, Atlantic
Richfield Co. and DuPont Co., were relieved of any liability.

"This could precipitate the worst plunge in California home values since the
housing crash of 2007," said Giuseppe Veneziano, president of LACBOR, saying
the ruling will have "frightening consequences."

In declaring such pre-1978 dwellings "public nuisances" because they contain
paint with lead in their interiors, Kleinberg awarded $1.1 billion to Los
Angeles, San Francisco, San Diego, Santa Clara and Monterey counties, as well
as five cities. The award to Los Angeles County alone is $605 million.

The state filed the lawsuit on behalf of the 10 agencies against companies
that manufactured and promoted the use of lead pigments in paint before it was
banned in the United States in 1978.

The lawsuit was filed to address public health dangers regarding children's
exposure to lead-based paint, despite efforts by paint manufacturers dating
back to the 1950s to voluntarily remove lead from interior paints following
research that showed it posed a potential health risk.

Similar "public nuisance" lawsuits against manufacturers of lead paint have
failed in Rhode Island and other states.

The ruling leaves unanswered a host of troubling questions, Veneziano said,
including the fate of well-maintained homes with lead paint and what actions
sellers of homes affected by the ruling, as well as potential home buyers,
should take.

Kleinberg ordered $700 million of the $1.1 billion go toward repairs to poorly
maintained properties and that $400 million be used to pay for inspectors to
look for evidence of lead paint in pre-1978 homes.

"Imaging the coming disruption of inspectors fanning out to ascertain traces
of lead in pre-1978 structures and then requiring the removal of that lead,"
Veneziano said. "This will require occupants, possibly blocks at a time, to
vacate and relocate until safety is restored to the satisfaction of

Warren J. Rohn, a LACBOR official who owns a home in Los Angeles County,
called the ruling "draconian." He said the ruling will have a far-reaching
impact on home owners, sellers and real estate professionals.

Rohn, whose home was built in 1958, fears buyers will shun his home if he puts
it on the market and believes that lenders, insurers and title companies will
blackball him because of the "public nuisance" label attached to his dwelling.

"When my home and (about 2.6 million) homes in L.A. County are reduced in
value, that will mean less income for the county assessor's office," said
Rohn, executive director of LACBOR.

CONTACT: Giuseppe Veneziano
President, Los Angeles County Boards of Real Estate
(310) 372-8453, www.lacbor.org

Warren Rohn
(310) 499-8889

SOURCE Los Angeles County Boards of Real Estate

Website: http://www.lacbor.org
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