How Loose-Fill Asbestos Insulation Could Destroy Your Property’s Value

In July 2018, the Department of Fair Trading will launch a loose-fill asbestos insulation (LFAI) awareness campaign in Newcastle, as part of the department’s Loose-Fill Asbestos Insulation Taskforce.

If LFAI is discovered they’ll buy the property at market valuation and demolish it, but if you don’t register before 31st July who knows what will happen.

NSW State Government Loose Fill Asbestos Insulation Register Newcastle Property Investment and buyers agentsThe goal is to get as many property owners in the region to register their homes for testing.

Loose-fill asbestos is an especially noxious form of raw, crushed asbestos used for ceiling insulation during the 1960s and 70s [Is There Loose-Fill Asbestos Insulation in Your Home?] that requires the complete demolition and remediation of the house and land to remove the hazard.

A public register of LFAI-affected homes

Since the NSW Government introduced a voluntary buyback scheme for properties that tested positive for LFAI, it’s created a public register of properties that are confirmed to contain LFAI or where there’s significant to suggest that it is present.

Homes confirmed to contain LFAI are eligible for the government’s buyback scheme, detailed in a previous post. Meanwhile, properties that are listed on the register as a risk of containing LFAI but not tested, will remain there.

How LFAI changed the law

A number of new laws have been introduced to identify properties affected by LFAI and to protect residents and workers in those communities. This has resulted in the following:

  • Property tagging: The owner of an affected property must display a warning sign at the main switchboard of the premises, even if the premises are only suspected to contain LFAI. The warning signs are only removed once the property has been demolished and remediated.
  • Mandatory disclosures: Section 149 (2) and 149 (5) certificates — or the Environment Planning and Assessment certificates — will now list properties included on the register.
  • Property transaction disclosures:
    • An amendment to the Conveyancing (Sale of Land) Regulation now includes a warning to purchasers about LFAI. Under the amendment, all sales contracts must include a standard warning about LFAI, which encourages the purchaser to search the LFAI register and contact the relevant council to see whether it holds any records showing the property contains LFAI.
    • An amendment to the Residential Tenancies Legislation requires that a property listed on the LFAI register is disclosed to prospective tenants as a material fact. The Residential Tenancy Agreement also requires that a property included on the register is listed on the agreement. The tenancy checklist must include a disclosure about the property’s inclusion on the register as a material fact.
  • Real estate agent disclosures: A property’s inclusion on the LFAI register must be disclosed to tenants and purchasers by a real estate agent as a material fact, per an amendment to section 52 of the Property, Stock and Business Agents Act.

Failure to rectify LFAI in your home

If your home is suspect to contain or confirmed as containing LFAI and the premises aren’t demolished and remediated, effectively renders them worthless due to new mandatory reporting and disclosure rules introduced by the state government.

We make this announcement because it is one step in the due diligence process for Property Evaluation that is important now but will be mandatory in the near future.

 

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