Do I have to volunteer asbestos information to a buyer?
This is a very common question from owners of older NSW houses preparing to sell: “Do I legally have to tell buyers there is asbestos in the house?”
For an ordinary house, there is no general statutory duty on a NSW vendor to volunteer that the house contains asbestos. That does not mean asbestos can be ignored. Loose-fill asbestos insulation is the major exception, the selling agent has separate duties about material facts, and nobody should answer a direct question from a buyer dishonestly or with a half-truth.
How does disclosure usually work in a NSW house sale?
In a NSW residential sale, disclosure usually works through the contract for sale. The contract includes prescribed documents and warranties, such as title documents, the section 10.7 planning certificate, the sewerage diagram and similar material.
Those documents tell the buyer certain things about the property. The general condition of the building is otherwise something the buyer investigates before exchange. That is why buyers often obtain building and pest reports, and why asbestos is commonly dealt with by inspection or testing rather than by a general vendor disclosure statement.
This is the practical reason ordinary bonded asbestos, such as fibro walls, eaves, vinyl floor tiles and similar materials, is not automatically listed in the contract documents simply because it may be present. Many homes and buildings built or renovated before 1990 still contain asbestos, and 1 in 3 houses in NSW constructed or renovated between 1945 and 1990 are estimated to contain asbestos.
What is different about loose-fill asbestos insulation?
Loose-fill asbestos insulation is different from ordinary bonded asbestos products. It is raw crushed asbestos installed as ceiling insulation, sold in NSW and the ACT mainly by the “Mr Fluffy” business in the late 1960s and 1970s. The problem with loose-fill is that it is a loosely packed form of asbestos which makes it easy for fibres to circulate in the air.
Since 1 September 2017, every NSW contract for sale of residential property must include a standard warning about loose-fill asbestos insulation. The warning tells the purchaser to consider the possibility of loose-fill asbestos insulation, to search the loose-fill asbestos insulation register, and to make inquiries with the local council. It appears in every residential contract, whether or not the property is affected.
The loose-fill asbestos insulation register is maintained under the Home Building Act 1989. It lists NSW residential premises where loose-fill asbestos insulation has been confirmed, or where the government is satisfied there is substantial evidence it is present. If a property is listed on the register, that listing is required to appear on the section 10.7(2) planning certificate. Because the planning certificate is attached to the contract, the listing surfaces in the contract itself.
For more background, see our article on loose-fill asbestos insulation.
What does the selling agent have to disclose?
The agent’s duty is separate from the vendor’s general disclosure position. In plain terms, an agent must not sell a property by misleading a buyer, hiding a material fact, or failing to disclose a material fact the agent knows or ought reasonably to know.
The prescribed material facts include a property being listed on the loose-fill asbestos insulation register. They also include a property being subject to significant health or safety risks. Other prescribed material facts cover matters such as recent flooding from a natural weather event or bushfire, certain serious crimes at the property, use for prohibited drug manufacture, cultivation or supply, and certain combustible cladding and building rectification orders.
Ordinary bonded asbestos in a house is not, by itself, a prescribed material fact. A specific asbestos situation may be different if it amounts to a significant health or safety risk, for example badly deteriorated friable asbestos. That is a judgment call, not a rule that all asbestos in older houses must be disclosed as a material fact.
Fair Trading’s guidance says agents should take reasonable steps to determine whether any material facts apply. That includes making appropriate inquiries with the property owner. In practice, your agent may ask you directly about asbestos-related matters. If they do, answer accurately and do not guess.
What if the buyer asks me directly?
A direct question is different from volunteering information unprompted. If a buyer asks, “Does the house contain asbestos?” or “Are those eaves asbestos?”, do not give a false answer and do not give a half-truth.
If you do not know, say you do not know. If you know a material has tested positive, say so. If you suspect something may be asbestos but it has not been tested, say that. For agents, false or misleading answers are squarely within the misrepresentation rules. For vendors, false answers can create a risk of misrepresentation claims under general law.
What should a sensible seller of an older home do?
If you are selling an older house, especially one built or renovated before 1990, it is sensible to know what you are selling before you renovate, repair or answer detailed buyer questions.
Asbestos may not pose a risk if undisturbed, but when renovators drill through walls, rip up floor tiles, and so on, they risk releasing asbestos fibres into the air. Fibro is a type of bonded asbestos, meaning that if it is in good condition, sealed and left undisturbed, it is lower risk and more likely to be safely contained. However, that is a big “if”.
Laboratory testing is simply the only way to tell if something is or isn’t asbestos. It cannot be identified reliably by sight. Airsafe analyses asbestos samples in its own NATA accredited laboratory, NATA accreditation No. 2959, using polarised light microscopy. See our asbestos sample testing page if you have a specific material that needs to be identified.
Where there are multiple suspect materials, or you are planning work before sale, an asbestos survey may be more useful than one-off sample testing. We treat any suspect material as containing asbestos until we ascertain otherwise. Airsafe has seven Licensed Asbestos Assessors, and our survey reports are accepted by SafeWork, local councils and certifiers. You can read more about asbestos and hazardous materials surveys.
Buyers can also commission their own pre-purchase asbestos inspection before exchange, just as they have a pre-purchase inspection to make sure the home’s foundations are solid. It is not going to set your mind at rest if somebody who does not know what they are looking for certifies a property as asbestos-free based on a superficial look around. Airsafe has offered pre-purchase asbestos inspections for years.
Here at Airsafe, we are in the business of testing for asbestos, not removing it. If asbestos removal is needed, that is work for an appropriately licensed asbestos removal contractor.
Are commercial premises different?
Yes. Commercial premises and other workplaces are different from an ordinary residential sale.
Under NSW work health and safety rules, the person with management or control of a workplace must keep an asbestos register unless the building was constructed after 31 December 2003 and no asbestos has been identified or is likely to be present. If management or control changes, including on a sale, the asbestos register must be given to the person assuming management or control.
Briefly, an asbestos register states where asbestos has been found in your workplace. An asbestos management plan is about the processes you have in place for dealing with that asbestos. See asbestos registers and management plans for more on workplace registers and management plans.
If you are preparing an older NSW house for sale and want to know whether suspect materials contain asbestos, call Airsafe on 1300 888 338.
