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Posted 09 March 2017
31 March 2017 Deadline to confirm registration
31 July 2017 Deadline to opt into Voluntary Purchase and Demolition Scheme if Loose Fill Asbestos Identified
Home owners whose properties may contain the so-called Mr Fluffy loose fill asbestos insulation need to obtain advice and act urgently. The Government has implemented an assistance package which is managed through the Office of Fair Trading.
Loose fill asbestos insulation is a raw crushed asbestos product, which was widely used for ceiling insulation in the 1960s and 1970s, mainly by a company known as Mr Fluffy. In NSW, its use was initially identified in 28 local government areas. However, the Government has identified an additional 35 local government areas where it may have been used.
Homeowners may not be aware that they have it, as it could lie underneath insulation batts. It is a particularly dangerous product because over time fibres can move into the living areas of the home. It is also problematic because company liquidations, elapsed time and other circumstances probably preclude legal action, leaving affected homeowners to government assistance measures.
The main issues for homeowners whose homes may contain loose fill asbestos insulation are:
1. Information – You need to know whether your home contains loose fill asbestos insulation. If you are in a designated local government area and have registered you may be eligible for a free Government inspection or you could organise a private inspection by a licensed asbestos assessor. Bear in mind that use of loose fill asbestos insulation will not necessarily be limited to properties constructed prior to 1980 or within the designated local government areas, e.g. if contaminated materials were reused.
2. Management – Owners of properties affected by loose fill asbestos insulation are required to register the property in a public register and display a compliant warning sign at the main switchboard. This is a significant issue for agents, whether strata managing agents, letting agents or selling agents, because they have disclosure and other obligations under the property stock and business agents legislation. The Department of Fair Trading has issued further details here.
3. Renovation and other works – When working with or removing asbestos contaminated materials, particularly when dealing with loose fill asbestos insulation, the contractor will generally need to be licensed and should always have appropriate expertise. Strata managing agents and homeowners engaging contractors should take great care with this.We have seen catastrophic consequences of engaging a contractor with insufficient expertise, e.g. buildings rendered uninhabitable for extended periods, with enormous clean-up and compensation costs.
4. Selling & Leasing – The Government has proposed law reforms to require disclosure, when selling or leasing, of whether the property is listed in the register of properties containing loose fill asbestos insulation. This may be more complicated than it sounds, as the disclosure requirement is whether the property is listed in the register, not whether it is affected by asbestos. Clearly, there is potential for legal proceedings where a property sold or leased is not listed on the register, but nevertheless contains loose fill asbestos insulation and that is not disclosed to the purchaser or tenant.
5. Government Assistance – The New South Wales government has announced an assistance package in relation to loose fill asbestos:
Broadly, this involves:
a. Inspection – If your home was constructed prior to 1980, and you live in one of the designated local government areas and if you have registered by the 31 July 2016 deadline you can obtain a free test and government assistance as set out below.
Free testing is only available to those in a designated area that registered before 1 August 2016.
b. Otherwise, you could organise a private inspection by a licensed asbestos assessor, which would be relatively inexpensive and arguably money well spent, particularly as the Government will reimburse the inspection fee if the result is positive and you are still able to opt into the second half of the Office of Fair Trading program being the Voluntary Purchase and Demolition Program operating for buildings that have tested positive and register before 31 July 2017.
6. Remediation – If a property has been identified as affected by loose fill asbestos insulation and you have already registered or elect to opt into the Voluntary Purchase and Demolition Program by 31 July 2017 , two options will be available:
a. Government acquires land for a compensation payment determined according to a valuation scheme, demolishes the building, remediates the land and sells the remediated property. This would be the only practical option for strata schemes.
b. Owner remains the owner of the property, but on the basis that the Government demolishes the building, remediates the land and makes a compensation payment based on the value of the building (treated as not affected by loose fill asbestos), enabling the property owner to sell or rebuild on the remediated property. This will be the only available option for some rural properties.
The scheme is voluntary, leaving a third option of doing nothing. This is highly inadvisable, for many reasons, including:
7. Financial assistance – The NSW Government will also provide financial assistance to affected homeowners and tenants, including financial assistance with the cost of:
The crucial points to note are that:
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.