I was at a party a few weeks ago and met a friend who is in the new home and renovation business. He mentioned that he had just completed his certification regarding the New Lead Paint Law which took effect in April of this year. This law affects homes that were built prior to 1978 and have lead based paint.

My friend was furious about this new law. He stated that "this new law is going to push many contractors out of business because of the costs involved in the new requirements".

Today I saw an article in the Wall Street Journal that more or less broke down some of these requirements and costs.

Every 5 years a contractor must be certified at a cost of $300. If a contractor works on a renovation project and don't comply with the law can be fined up to $37,500 per DAY ! Contractors will have to invest in testing kits, respirators, plastic sheeting, and protective clothing to name a few.

The EPA estimates that 87% of homes built before 1940 and 24% of homes built between 1960 and 1978 have lead based paint. Contractor companies are saying that it will add substantial costs of new equipment and labor costs and they are concerned with the ability to pass these costs on to the consumer.

In my local market, which has a high percentage of older homes, a renovation could cost $16,000 to $60,000 more due to this new law. Homeowners are cash strapped now and I don't think they are going to be willing to lay out the extra money for a renovation, especially since $60,000 equates to 25% of the value of their home.

One plus....home owners who do their own renovations are exempt from the law, but again, the small business owner takes a huge hit.