Asbestos: how it affects your property value

TY May article

Understanding your responsibilities

Asbestos was once known as a super strong building material with good insulating properties. Now asbestos insulation is known as a serious hazard.

And it’s a huge problem across the New Zealand properties, in particular, with older buildings.

Its serious effects on human health has caused many businesses to move out of buildings to protect their staff, as well as cost them a fortune to remove it safely.

New asbestos regulations for commercial buildings and workplaces

Asbestos testing, management and removal has been going on voluntarily for years. But now, the government has made it mandatory in a new piece of legislation. As of April this year, it is a legal requirement for commercial buildings that were built pre-2000 to have an asbestos register and management plan.

This new legislation will have significant impact on the commercial property sector, and in particular, landlords and property managers.

“While we generally understand that asbestos poses a serious health risk, the Regulations are about raising the bar for the removal industry and bringing New Zealand’s approach to managing asbestos in the workplace and any associated removal in line with Australia and the UK.” WorkSafe New Zealand

How asbestos exposure impacts property value

At some point, asbestos will affect the value of a building. The question is when and how much.

For example, if a commercial roof is in good condition, regardless of asbestos, it affects the value less than in the case of an asbestos roof being old, starting to leak, and needing repairs. That’s when the value will start to decline due to having the extra costs of removing the asbestos.

If any asbestos is present in your property and the structure is old and wearing, be prepared for the buyer to ask for a price reduction. Again, they’ll take on the costs of asbestos removal when the structure needs replacing or maintenance.

The effect on the property value will also depend on the current market (is it a buyer’s or seller’s market). If there are less buyers for the property, then they will do their best to push the price down if there is asbestos exposure present and if it’s a seller’s market, the negotiation power isn’t as high.

Common areas for asbestos in commercial properties

Below is a list of common areas within a property that may contain asbestos or ACM:

  • Roof and roof ventilation
  • Skylight and manhole frames
  • Asbestos cement vent pipes and capping
  • Window moulding, barge moulding and louvre blades
  • Ceiling tiles
  • Compressed sheet flooring and vinyl flooring
  • Wall sheeting
  • Plumbing and guttering
  • Fencing

Asbestos Management Plan

As per the WorkSafe website, the plan must include information about the following:

  • The identification of asbestos or ACM
  • Decisions, and reasons for decisions, about the management of risks arising from asbestos at the workplace
  • Procedures for detailing incidents or emergencies involving asbestos or ACM at the workplace
  • The workers who carry out work involving asbestos, including:
  • Information and training that has been, and will be, provided to the workers
  • Roles and responsibilities of the workers
  • Any health monitoring of the workers that has or will be done

The business (referred to as PCBU) must make sure a copy of the plan for the workplace is available to:

  • A worker (or their representative) who has carried out, or intended to carry out work at the workplace
  • A PCBU that has required, or may require work to be carried out at the workplace.

How much does it cost?

Asbestos surveying costs range depending on the size of your building. It can be under $1,000, or up to tens of thousands for multi-storey buildings.

Once the asbestos has been removed there are other costs to be aware of. Further asbestos testing needs to be done for air quality purposes, to make sure there is no asbestos residue. Costs for air quality monitoring could be as much as $500-$700 per day.

Who can help?

A PCBU can approach any of the following people for an assessment (ensuring they’re suitably experienced to identify asbestos):

  • An occupational hygienist with asbestos experience
  • A licensed asbestos assessor
  • An asbestos removal supervisor
  • Someone who has passed the unit of competency for asbestos assessors
  • A person nominated by an accredited laboratory

Talk it through with an expert

As property valuers, we have seen the effect of asbestos in buildings throughout New Zealand. Yes, it’s a harmful substance that we need to be extremely careful with, but it is becoming easier to understand and eliminate.

If you’d like to talk about your property with us and how the value of your property might be affected, please don’t hesitate to get in touch with the TelferYoung team.

Location: Tauranga | Posted 1 year ago