Asbestos risks in commercial property

It has been illegal to use asbestos in the construction or refurbishment of buildings since 1999 but historically it was widely used in building materials due to its heat, fire and sound protection qualities.

Asbestos is now recognised as a significant health hazard if disturbed and so building owners and occupiers must be aware of, and comply with, legislation that regulates its use, removal and management.

Control of Asbestos Regulations 2012

The relevant current regulations are the Control of Asbestos Regulations 2012 (CAR) which came into effect on 6 April 2012 and an approved code of practice has been issued by the Health and Safety Executive ('HSE').

In common with other health and safety regulations, breach of CAR constitutes a criminal offence, punishable by an unlimited fine and/or up to two years imprisonment. Affected persons may also bring negligence claims against the dutyholder.

There is an obligation on the dutyholder to (i) determine whether asbestos is present or is likely to be present in a building and (ii) manage any asbestos which is or is likely to be present.

Who is a dutyholder?

In essence, a dutyholder is: 

• 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.

This definition is broad - it will apply to tenants, landlords and freeholders.

A tenant with responsibility for maintenance or repair of the structure of a property is likely to be the dutyholder for the purpose of CAR. However, if the landlord retains the right to enter and repair in the event of tenant default, the landlord will also be a dutyholder.

Similarly, if a tenant grants an underlease of non-domestic premises, the undertenant may become a dutyholder if it has repairing obligations. As the tenant will remain liable under its headlease, it too will be a dutyholder.

These obligations can also extend to managing agents if they have taken over the repair or maintenance of a property.

If there is more than one dutyholder, the contribution to be made by each is determined by the 'nature and extent of the maintenance and repair obligation'.

The obligations do not rely on a person being in occupation. They apply to vacant premises.

What are non-domestic premises?

CAR does not define non-domestic, however the HSE has advised that a broad approach will be taken.

It include commercial premises, offices, retail premises, industrial premises, hospitals, schools, universities, prisons and places of worship.

Common areas in blocks of residential flats, in garages or car parks, access and circulation areas for flats over a retail unit and, in relation to hotels, pubs and halls of residence, all guest accommodation and common parts, are also non-domestic premises.

What does the dutyholder have to do?

• Assess the risk

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.

As buildings constructed after 1999 should not contain asbestos, it may be reasonable not to carry out a survey in these buildings. In all cases, the approach taken should be proportionate to the perceived risk and a full survey may not be required unless work is planned which could disturb the asbestos.

The dutyholder must review the survey and record its findings. 

• Prepare a plan

If the survey shows that asbestos is or is liable to be present, the dutyholder must determine the risk from that asbestos, prepare a written plan to identify the parts of the premises affected and specify the measures taken to manage the risk.

The measures must include monitoring the condition of the asbestos and maintaining or removing any materials thought to contain asbestos. The information about the location and condition of the asbestos must be provided to every person liable to disturb it and to the emergency services.

What does this mean for property transactions?

Every person with an obligation to maintain or repair a property constructed before 1999 must take particular note of the asbestos regulations, and comply with them.

Landlords and tenants should co-operate to ensure that there are no risks associated with a property. The lease will determine their respective repairing obligations, and also the extent to which the landlord can pass on the costs of compliance to the tenant through any service charge or contribution provision.

A buyer will become a dutyholder with immediate effect on completion of its purchase, and must obtain satisfactory replies to enquiries from the seller, including a copy of the seller's written plan and most recent survey. Although there is no duty on the seller to provide this information, detailed enquiries regarding asbestos are included in the industry standard commercial property enquiries.

If necessary, 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 is known.