Commercial Property Update: People who don't comply with the current legislation on Asbestos Control could be at risk of being given a prison sentence of up to two years and/or an unlimited fine.
Trethowans LLP recently advised a client company that owns multiple commercial properties as to their obligations to comply with Regulation 4 of the Control of Asbestos Regulations 2006 ("the Regulations").
Any party who has, by virtue of a contract or tenancy, an obligation in relation to maintenance or repair of non-domestic premises is potentially liable if they fail to deal with asbestos correctly. Failure to do so can potentially result in prosecution.
You are potentially liable if, in relation to non-domestic property, you are either:
- an owner;
- a landlord;
- a tenant;
- a licensee - if you have repairing obligations;
- a managing agent - if you are contracted to deal with repair of a property;
- a mortgagee - but only where you become a mortgagee in possession.
You need to take the following 3 steps to ensure compliance with the Regulations:
1. Determine whether asbestos or "Asbestos Containing Material" (ACM) is present or is likely to be present in the property.
2. Assess the risk posed by any asbestos or ACM that is or is likely to be present, by way of a suitable and sufficient asbestos assessment.
3. Manage any asbestos that is or is likely to be present, keeping the situation under review and recording all findings. It is possible to claim contaminated land tax relief, where there is a requirement to remove or treat asbestos or ACM.
How do the Regulations apply to leasehold property?
This will depend on the lease terms. If more than one person is potentially liable, the relative contribution of each will be determined by the "nature and extent" of their maintenance and repair obligations, as set out in the lease.
- where the whole property is let to one tenant, the tenant will usually have covenanted to comply with their statutory liabilities - the tenant will be the primary dutyholder and will need to arrange an asbestos survey and comply with the Regulations.
- in a lease of a multi-let building to separate tenants, it is usual for the landlord to retain overall responsibility for repair of the building - the landlord will be the primary dutyholder and will need to arrange an asbestos survey (although the lease terms may enable the landlord to pass on such costs to each of the tenants via the service charge).
- even where primary liability lies with an occupying tenant, it is usual for a lease to provide that the landlord is permitted to carry out repairs where the tenant defaults - in such circumstances the landlord remains liable under the Regulations as "secondary dutyholder". The Landlord will become the "main dutyholder" if the lease is determined in some way, for example under a break clause.
What should I do if I think I'm liable to comply with the Regulations?
The short answer - seek specialist advice asap, either from your solicitor or from a surveyor.