Legislation & Litigation

Mr. Fluffy Asbestos Disclosure Burdens Real Estate Agents

Written By:
June 1, 2015
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Written By: Lorraine Kember,
June 1, 2015

The ongoing Mr. Fluffy asbestos insulation debacle in Australia is placing a heavy burden on unprepared real estate agents who must disclose if the homes they sell contain the deadly substance.

Real estate agents in the Australian Capital Territory (ACT), where more than 1,000 homes in Canberra were identified to contain asbestos, are obligated by law to disclose the presence of asbestos or face fines of $1 million or more.

In New South Wales (NSW), where more than a dozen homes showed asbestos contamination, officials had said real estate agents and property managers had no clear guidelines. Thousands more homes may be affected.

Real Estate Institute of New South Wales (REINSW) president Malcolm Gunning said the government “has been caught on the back foot.”

“Our concern is that real estate agents generally are not equipped because they’re not building experts,” Gunning said. “We require some sort of guidelines. We can then train our members up.”

However, Gunning’s real estate group and several NSW government branches, including workplace safety and consumer protection agencies, have developed a guide to educate real estate professionals about asbestos disclosure in their clients’ homes.

Asbestos Requirements for Real Estate Agents

If an asbestos assessment and property report reveals the presence of asbestos, real estate agents must disclose this information to all potential buyers and tenants.

In every initial property inspection report, agents must disclose:

  • The age of the property
  • Whether tenant or homeowner is aware of any asbestos on the property
  • Any asbestos assessment reports for the property
  • Whether tenant or homeowner is aware the property was part of the Mr. Fluffy loose-fill asbestos ACT clean-up program that ran between 1988 and 1993

The law also states that any documents concerning asbestos on the property should be included in the contract of sale and in the property’s building file.

These documents include:

  • Certificate of asbestos removal work completed
  • Any correspondence to the homeowner about loose-fill insulation
  • Building plans, applications and removal control plans
  • Lease conveyancing enquiry report stating that asbestos is or has been on this land

Real estate agents in Canberra may face fines higher than $1.1 million if they do not disclose asbestos information to potential clients.

Disclosure of Asbestos in Residences

In July 2014, the ACT government published a fact sheet that served as guidance to the real estate industry about asbestos in residential properties.

That fact sheet outlines obligations real estate agents must adhere to as a duty of care to their staff members and clients. It stresses the need for everyone in the real estate industry to be aware of the dangers of asbestos.

REINSW officials recently developed an asbestos disclosure guide with help from consumer group NSW Fair Trading and occupation safety agency WorkCover NSW. It explains the steps agents and consumers should follow when addressing asbestos-related risks.

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