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Loose-fill Asbestos Insulation Voluntary Purchase & Demolition Program

The following article was published by Hillside Legal and is reproduced here with their permission.

Loose-Fill Asbestos Insulation And The Voluntary Purchase And Demolition Program

Throughout the 1960s and 1970s, pure loose-fill asbestos was sold as ceiling insulation for both residential and commercial premises. At least one particular company used raw amosite and crocidolite asbestos, known as loose-fill asbestos, and installed insulation in around 1,000 houses in the Australian Capital Territory and also into homes in New South Wales. The insulation is easy to disturb meaning the fibres can be inhaled.  Over time, the hazardous airborne fibres can move from the ceiling into living areas.

In addition to receiving updated advice from NSW Health, The NSW Government has addressed the issue of loose-fill asbestos by conducting independent investigations to establish the number of residential properties with insulation that may contain loose-fill asbestos material, offering a free ceiling insulation testing service available for homeowners with homes built before 1980 and developing a Voluntary Purchase and Demolition Program for affected properties.

There is no doubt that the value of your home will be affected if it contains loose-fill asbestos insulation. Assistance is available through the Voluntary Purchase and Demolition Program – but you must register by 1 August 2016.

DISCLOSURE REQUIREMENTS

In late 2015, the Home Building Act 1989 was amended to allow NSW Fair Trading to publish a register identifying properties affected by loose-fill asbestos insulation (the LFAI Register). Changes to the Home Building Regulation 2014 deal with verification of the presence of loose-fill asbestos insulation and provide for warning signs to be displayed at the main switchboard at affected residential premises. The sign must contain the words “Danger these premises contain loose-fill asbestos insulation” in block letters.

Changes to the Residential Tenancies Regulation 2010 provide that a listing on the LFAI Register becomes a material fact that must not be concealed by a landlord or its agent to induce a tenant to enter into a residential tenancy agreement. From 30 October 2016, the Standard Form Residential Tenancy Agreement will also be changed by the insertion of a new clause 40B, providing that the landlord has advised the tenant in writing that the premises are listed on the LFAI Register and that if during the tenancy, the premises become listed on the LFAI Register the landlord will advise the tenant in writing within 14 days.

Changes to the Environmental Planning and Assessment Regulation 2000 will require a Section 149(2) Planning Certificate issued by a local council to state if a property is listed on the Register.

In an attempt to protect people from unknowingly purchasing a property that contains loose-fill asbestos, the NSW Government is proposing new laws which will require vendors of property to confirm in the contract of sale whether the property contains or is free of loose-fill asbestos.

VOLUNTARY PURCHASE AND DEMOLITION PROGRAM

Demolition, comprehensive site remediation and disposal has been identified as the best way to ensure the health and safety of the community. As such, the NSW Government is offering free sample testing for loose-fill asbestos to owners of pre-1980s residential properties in 28 identified Local Government Areas (LGAs). The 28 LGAs are:

  1.  Albury City Council
  2.  Bankstown City Council
  3. Bega Valley Shire Council
  4. Berrigan Shire Council
  5.  Bombala Council
  6. Boorowa Council
  7. Cooma Monaro Shire Council
  8. Eurobodalla Shire Council
  9.  Goulburn Mulwaree Council
  10. Greater Hume Shire Council
  11.  Hornsby Shire Council
  12. Ku-ring-gai Shire Council
  13.  Lithgow City Council
  14. Manly Council
  15. Narrandera Shire Council
  16.  North Sydney Council
  17.  Orange City Council
  18.  Palerang Council
  19. Parramatta City Council
  20. Queanbeyan City Council
  21. Snowy River Shire Council
  22. The Hills Shire Council
  23. Tumbarumba Council
  24. Upper Lachlan Shire Council
  25. Wagga Wagga City Council
  26. Warringah Council
  27. Yass Valley Shire Council
  28. Young Shire Council

The Loose-fill Asbestos Implementation Taskforce, established by NSW Fair Trading, is responsible for overseeing and implementing the Voluntary Purchase and Demolition Program and its associated Assistance Package. The program is being delivered in four stages:

1.       Assistance and Identification

Owners of pre-1980 residential properties in the 28 identified Local Government Areas are eligible for free sample testing. To be eligible, you must be registered for testing by 1 August 2016. If you own a house outside of the identified LGAs, you are not eligible for free sample testing. However, if you wish, you are able to have your property tested by a Licensed Asbestos Assessor. If the assessment results in a positive test, you will be eligible for the Voluntary Purchase and Demolition Program and the cost of the test will be refunded.

2.       Valuation and purchase of affected properties

The valuation process will be coordinated by the Australian Property Institute and each eligible property will be valued as if it was free of loose-fill asbestos. Two independent valuation will be carried out and averaged. Once the valuation has been completed, you will receive a letter identifying how much you will be offered. You will then have two options.

OPTION 1: You will be offered the value of the whole property, including land and improvements. If you choose this option, the Government will prepare a Contract for Sale of Land and send it to your nominated legal representative.

OPTION 2: You will be offered the value of the whole property only, meaning you will retain ownership of the land. If you choose this option, the Government will prepare a Licence Agreement permitting the Government to enter the property, demolish the affected premises and remediate the land. You will then be able to rebuild on the same block of land. For rural properties, this will be the only option available.

The Option Election Form you receive with your letter is not binding, and legally, you will not be required to proceed with any option until such time as you have signed either a Contract for Sale or a Licence Agreement. We recommend that you seek independent legal advice on the sale of the property and note that the Government will provide affected homeowners with $1,000.00 in financial assistance to obtain legal advice.

3.       Demolition and Remediation

The removal of loose-fill asbestos insulation from the affected property will be done by a Class A Licensed Asbestos Removalist (LAA). We understand that demolition will be by order of registration date, balanced with properties identified as ‘at risk’. A property or homeowner could be deemed ‘at risk’ because of health and safety, hardship concerns or other environmental factors which may change the priority of the demolition process.

4.       Sale

Assistance for homeowners and tenants

If your home contains loose-fill asbestos insulation, you may be eligible for financial assistance through the Voluntary Purchase and Demolition Program. This may include relocation assistance, whereby owner-occupiers can receive up to $10,000, plus an additional $2,000 per dependent child living in the affected property (up to a maximum of two children) after a property is sold to the NSW Government.

Homeowners who sell an affected property to the NSW Government under the Program are also entitled to a stamp duty concession on the purchase of a residential property in NSW. The value of the concession is equal to the value of the stamp duty that would have been payable by the NSW Government when it purchased the affected property.

WHAT TO DO IF YOU BELIEVE YOUR HOME MAY BE AFFECTED BY LOOSE-FILL ASBESTOS

  1. If you live in a free testing area, to establish eligibility and request testing, register online or contact Service NSW on 13 77 88. You must register by 1 August 2016. Please note that even if you are not in an eligible area, you can pay for your own sample testing and if the result is positive, you will be refunded the cost of the test and become eligible for assistance.
  2. If the test comes back positive, have the property independently valued.
  3. Once you receive the results of the valuation, explore your options (whether to sell your home and land to the Government or sell your home only, demolish it safely and restore the land so that you can rebuild.

Remember, if you do not register by 1 August 2016, you will have to bear the cost of any future rectification. In addition, the new disclosure requirements and the availability of the public register of affected properties will mean that prospective buyers and tenants will know that the property is affected – potentially reducing the value of your property.

This information is provided as a general guide only. It is not designed to be, nor should it be interpreted to be an exhaustive statement of the law. It is not and should not be relied upon as legal advice.