Lead paint litigation has provided life changing compensation for children that have suffered
permanent brain damage that affects them for the rest of their lives. While the primary focus often
falls on landlords and property managers, banks can also find liable for injuries suffered by children
due to lead paint poisoning for properties that the own and/or operate, even if briefly.

Lead Paint and Legal Accountability

Baltimore City banned the use of lead-based paint in 1950. Lead-based paint was widely used
nationwide in homes built before 1978, when its residential use was banned in the United States
due to health risks. Exposure to lead, particularly for children, can cause severe health issues,
including developmental delays, learning difficulties, and other serious damage. Local housing
codes require owners and operators of properties to maintain their properties in good condition to
prevent lead poisoning to children living in or visiting those properties. Federal and state laws, such
as the Residential Lead-Based Paint Hazard Reduction Act (Title X), further impose strict
requirements for property owners to disclose and mitigate lead hazards.

Where Do Banks Come In?

Although banks are not generally in the business of owning residential properties, they can become
involved in lead paint litigation in several scenarios:

1. Foreclosure Properties
When a bank forecloses on a property, it may take possession of the home, making it a
property owner. In this capacity, the bank could be held responsible for lead paint hazards
if it fails to comply with local, state and federal maintenance, disclosure and remediation
laws.
2. Mortgage Lending
Banks financing the purchase of older homes must ensure that lead-based paint disclosures
are provided to buyers as part of the loan process. Failure to confirm compliance could
expose the bank to liability, especially if the property is later found to have undisclosed lead
hazards.
3. Trustees and REO Properties
Real estate owned (REO) properties held in trust by banks can also create liability. Banks
that neglect to inspect and mitigate lead paint hazards in these properties risk legal action
under local, state and federal regulations.

The Future of Bank Liability in Lead Paint Cases

As the housing stock ages, lead paint litigation is likely to remain a persistent issue. At O’Brien Law,
we will continue to hold banks accountable for their decisions to invest in real estate in our state of
Maryland and contribute to the poisoning of our children.