The Risks of Asbestos in Commercial Property

Business

It has been illegal to use asbestos in the construction or refurbishment of buildings since 1999. Much of what was used in the past, however, is still in place, constituting a significant health risk to all those involved. Therefore building owners and occupiers must be aware of, and comply with, legislation that regulates its use, removal and management.

The Control of Asbestos Regulations 2012 (SI 2012/632) (CAR 2012) came into effect on 6 April 2012. Failure to comply with the requirements of the CAR 2012 constitutes a criminal offence and is punishable by an unlimited fine and/or up to two years imprisonment. Affected persons may also bring negligence claims against the dutyholder.

Regulation 4 of the CAR 2012 imposes a duty to manage asbestos risk in “non-domestic premises”.

Who is a dutyholder?

every person who has any obligation relating to the repair or maintenance of non-domestic premises or any means of access to or egress from them under a contract or tenancy; or
where there is no such contract or tenancy in relation to non-domestic premises, every person who has, to any extent, control of that part of them or any means of access to or egress from them.

The broad definition of “dutyholder” means that a wide range of people will be liable, including all owners of non-domestic property, landlords, tenants, licensees, and, potentially, managing agents. It is important to note that the obligations do not rely on a person being in occupation. They also apply to vacant premises.

What are non-domestic premises?

There is no definition of “non-domestic premises” in the CAR 2012. The HSE advises that a broad approach will be taken, although this will ultimately be a matter for the courts to determine. It is likely to include commercial premises, offices, retail premises, industrial premises, garages, car parks, communal areas in blocks of residential flats, access and circulation areas for flats over a retail unit as well as others.

The HSE has produced a useful chart showing how the HSE views the classification of residential premises as domestic or non-domestic premises:

Asbestos: the duty to manage asbestos: what premises are affected? (HSE).

What is a Dutyholder required to do?

Carry Out an Assessment

A dutyholder must carry out a ‘suitable and sufficient’ assessment to determine whether asbestos or asbestos containing material is likely to be present in the premises.

To do this, the dutyholder must take account of building plans, other relevant information and the age of the premises. An inspection must be made of those parts of the premises which are reasonably accessible. According to the HSE, unless there is strong evidence to the contrary, it should be assumed that materials may contain asbestos and a survey should be carried out.

A dutyholder needs to be aware of its responsibilities to review the assessment. A failure to do so will be a breach of regulation 4(6).

Record the Assessment

The results of the assessment must be recorded. This will be the dutyholder’s proof of compliance. The information produced during the course of the assessment will be of value to the dutyholder in considering its further duties to determine the risk posed by any asbestos and any plan to manage that asbestos.

Determine the Risk

If the dutyholder has established as a result of its assessment that asbestos is or is likely to be present in the property, or has taken the decision to presume that it is present, then the dutyholder must determine the level of risk.

This will depend amongst other things on the type of asbestos, where it is used, whether it is exposed or encapsulated, what condition it is in, what condition the property as a whole is in, and what the dutyholder intends to do with the property.

Prepare a Written Plan for Managing the Risk

Once an assessment indicates that asbestos is present or is liable to be present, the dutyholder must prepare a written plan of action, and keep it under review.

It should be remembered that the presence of asbestos does not mean that it should be removed. It may be appropriate to encapsulate it so that it becomes “safe”, and to monitor it. It may be “safe” until such time that alteration works are required, but dutyholders do need to consider what would happen in the event of an emergency, such as a fire or flood, where previously encapsulated or hidden asbestos may become exposed and pose an immediate risk.

The information about the location and condition of the asbestos must also be provided to every person liable to disturb it and to the emergency services.

What does this Mean for Purchase Transactions?

A buyer will become a dutyholder on completion of the transaction with immediate effect, It is therefore vital that a Buyer obtains satisfactory replies to enquiries from the seller, including a copy of the seller’s written plan and most recent survey.

However, there is no duty on the seller to provide this information although detailed enquiries regarding asbestos are included in the standard commercial property enquiries.

If the Buyer is unable to obtain such information from the Seller, the buyer should carry out its own survey, particularly where refurbishment works are planned to older properties, so that the cost and extent of asbestos management work can be assessed.

What does this Mean for Landlords and Tenants?

The lease should clearly determine repairing liabilities, and usually the lease will impose an obligation on the tenant to comply with its statutory liabilities.

The written plan will give an indication of what work is planned, and might be charged for under the service charge provisions. It may also indicate any problems that the tenant may face in carrying out its own alterations.

Where a lease imposes repairing obligations on a tenant, the landlord should ensure that the tenant is aware of its obligations under regulation 4 of the CAR 2012 and be satisfied that the tenant has complied with its obligations.

Where the landlord has repairing obligations, it will probably need to gain access to demised parts of the building to carry out the necessary surveys. The lease will set out the terms of entry and whether survey costs and costs of compliance with the CAR 2012 can be recovered from the tenants under the service charge.

In multi-let premises, the responsibility for maintenance of the communal parts, services, external fabric and main structure of the building will generally lie with the landlord. The landlord will be a dutyholder and will be required under regulation 4 to arrange asbestos surveys to be carried out and for copies of asbestos registers to be produced to each tenant.

Even where the landlord has passed the responsibility for repairs and maintenance for the whole property to the tenant, the landlord will continue to be a dutyholder: the landlord may have to step in and carry out work in the event of the tenant’s default.

The landlord will become the primary dutyholder on a forfeiture or surrender, and on the expiry of the term of the lease, however determined.