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 Asbestos and commercial property
15/10/2007
Perhaps you are thinking of purchasing that ideal property investment, or perhaps you are thinking of realising the value by selling a property on. Asbestos may not rate highly in your list of priorities, but where asbestos is concerned due diligence will pay dividends.
For those in the commercial property market they may already be familiar with due diligence, and even if you are, does it adequately investigate asbestos liabilities?
For Buyers
Risk inheriting liabilities that may prove costly in both the un-anticipated asbestos removal costs and postponed timescales, both incur financial penalties. This maybe in the form of renting temporary premises whilst asbestos abatement works are completed before finally moving in. For a redevelopment or demolition project, this postpones the project with potential late completion penalties for the developer. The likelihood of incurring these costs can be minimised by obtaining an asbestos survey or asbestos register from the onset as a pre-requisite to premises acquisition.
When there is an asbestos survey available there is a danger of ‘tick box compliance’ where the asbestos survey has not been independently validated for thoroughness and accuracy. As a minimum a Type 2 survey to the MDHS 100 standard should be sufficient, although a Type 3 survey is required if refurbishing or demolishing a property. Check that the firm has experience in conducting Type 3 surveys and that they hold an appropriate level of insurance cover.
Where asbestos has been removed under controlled conditions, and then d from the asbestos register, a certificate of re-occupation should be available for each and every job. This is to ensure that the removal job met the required standard at the time. Consider having areas for which the certificates relate to be independently re-inspected as older jobs may not meet today’s standard.
Where asbestos has been identified some material types require 14 days notification to the HSE or Local Authority before removal can take place. Then you should consider the cost of analytical air testing work and the bureaucracy in vetting and organising all this. These costs may have to be accounted by re-adjusting the perceived value of the property and changing the offer accordingly.
For Sellers
By not having an asbestos survey or asbestos register available this could potentially slow down the sale if this is identified during the due diligence. This may put off the buyer in the form of lower offers as assumptions may be made based on the building’s age, or be put off the property entirely and the loss of a potential sale.
By providing an asbestos survey/register to the minimum MDHS 100 Type 2, this will help quantify the liabilities and help you reach a decision regarding whether to sell the property on with the asbestos at a lower price or remove it in the hope of achieving a better price. Type 3 surveys could be considered if the property is dilapidated as refurbishment will be required, which for some buyers may prove a selling point. Whatever type of asbestos survey you may have carried out potential buyers may want to inspect the property to check the accuracy of the report.
For licensed asbestos abatement works keep all certificates of reoccupation as these provide assurance that the removal works were done to a satisfactory standard at the time of issue. The required hygiene standard has risen over the years, so what is considered satisfactory then, doesn’t mean that that it would meet today’s standard. As of 2006 all analytical air monitoring has to have been completed by a UKAS accredited firm.
It is also important to consider all this information as privileged due to the stigma of asbestos to blight a property. So limit the knowledge of asbestos to preferred buyers or serious buyers only.
For both the buyer and a seller asbestos survey reports and registers based upon them will have caveats, which are often issues such as electrical items like flash guards, pads and fuses. It may seem easy to be put off by the cost, however the perceived saving in not undertaking a survey may soon be far outweighed when concerned contractors raise asbestos as an issue and you don’t have a piece of paper to the contrary.
Envirocare can enable you to make confident property decisions based on the accuracy and clarity that a thorough asbestos survey to the MDHS100 standard can bring. Envirocare can also independently evaluate survey reports and resurvey abated areas as we do not deal with asbestos removal or 4-stage air clearance testing. Alternatively, as a lower cost screening survey for larger properties, rapid building appraisals can be conducted to flag up any potential significant liabilities before initiating a full survey to the relevant required standard.
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