California Asbestos Disclosure

What is Asbestos Disclosure in California

Prior to 1980, asbestos use was prevalent in California's construction industry. Asbestos refers to a set of minerals that naturally occur in the environment. Asbestos was the preferred component in building materials for many years because of its unique properties (resistance to heat, fire, corrosion, and electricity). The typical applications included roofing and siding shingles, heating ducts, vinyl floor tiles, drywall, ceiling, and wall insulation, patching compounds and textured paints, and hot water pipes and boilers. It was not until much later that the inherent toxic effects of asbestos were discovered. Consequently, the state established California's mesothelioma and asbestos laws to regulate asbestos and its use within state limits.

Today, it is well-known that asbestos is a human carcinogen, and prolonged exposure can lead to ailments like lung cancer, asbestosis, and mesothelioma. Still, asbestos may be found in many pre-1980 properties and structures in California, even though uses of the mineral in building materials are restricted by the U.S. Environmental Protection Agency's (EPA) regulations. (The EPA's regulations, embodied in the Toxic Substances Control Act, deter the production, importation, processing, and distribution of certain asbestos-containing products. They also prohibit all new uses of asbestos after August 25, 1989.)

Ordinarily, the mere existence of asbestos or asbestos-containing construction materials (ACCM) in a building does not constitute a health hazard. Neither does its presence in the environment, as many regions in California have naturally-occurring asbestos (NOA). However, asbestos becomes friable when dry. It can crumble under the slightest pressure and become suspended in the air, thereby creating a substantial risk to persons who breathe in or ingest the particles.

In response to the rise in asbestos-related illnesses - 6,503 by the latest count, California enforces strict regulations for the safe handling, removal, and disposal of asbestos. Some of these regulations cover the notification of inhabitants and workers when asbestos-containing materials are found in a building, also referred to as the California Asbestos Disclosure Act.

California Asbestos Disclosure Laws

Because asbestos was mainly used for construction in California, people may encounter it in older homes, rental properties, or commercial/public buildings. In such establishments, the actual danger arises when products or materials containing asbestos are damaged in a manner that causes particles to be released - for example, during everyday activity or the remodeling/demolition of a property. Therein lies the primary objective of California's asbestos disclosure laws; to inform locals of asbestos and asbestos-containing materials (ACMs) in areas where they live or work and to ensure reasonable precautions are taken to protect residents from hazardous exposures to asbestos. These statutes also reinforce a building owner's duty to be forthcoming in real property transactions.

In California, the asbestos disclosure laws about buildings and properties are codified in the following sections of the legislature:

The California Health and Safety Code, specifically Division 20 (Miscellaneous Health and Safety Provisions)
Title 8, Section 1529 (k)(1) and (2) of the California Code of Regulations

Some regulations are also outlined in the California Civil Code. For example, Cal. Civ. Code § 1102, et seq. covers disclosures upon the transfer of most residential properties.

Do You Have to Disclose Asbestos When Selling a House in California?

A house owner may or may not be required to disclose the presence of asbestos before a sale in California. According to Cal. Civ. Code § 1102, the seller of residential real property comprising one to four units (excluding a few exceptions) must furnish a prospective buyer with a Real Estate Transfer Disclosure Statement (TDS). A TDS is a multi-page document that points out or describes significant defects the seller is aware of. This includes substances, products, or materials that may be environmental hazards, such as asbestos.

According to the Department of Real Estate, a Real Estate Transfer Disclosure Statement must be provided to a buyer before the transfer of title. A seller may also give a buyer a booklet titled "Environmental Hazards: A Guide for Homeowners, Homebuyers, Landlords, and Tenants". However, should the buyer collect this booklet, the seller is not required to disclose additional information about environmental hazards that can affect the property, except they have actual knowledge of the presence of an environmental hazard affecting the house or piece of property (Cal. Civ. Code § 2079.7).

Notwithstanding, state law explicitly mandates the disclosure of asbestos-containing construction materials in buildings constructed before 1979 under Sections 25915 through 25919.7 of the Health and Safety Code. This notice requirement applies irrespective of the quantity or condition of the materials.

Altogether, in disclosing asbestos before a house sale in California, sellers are encouraged to err on the side of caution and notify their buyers, despite the imposition of a legal obligation or not. This can prevent legal and financial liability for any injury or loss sustained due to nondisclosure.

Does Asbestos Affect a Property's Value in California?

Yes, asbestos can affect the value of a property in California. However, the degree to which it impacts a property's value may depend on the state of the asbestos and how much it will cost to remove the substance.

Asbestos is now infamous for being a severe threat to human life and safety, not only in the state of California but nationwide as well. For this reason, it is categorized as a material defect (one could say a red flag) in real estate transactions, and many buyers would rather bypass the hassle of purchasing a property containing asbestos - even though the related federal and state departments only deem the mineral a hazard when it is disturbed, dislodged, or deteriorated.

Besides the deadly hazards of asbestos, a property buyer may opt for an asbestos-free building over an asbestos-containing one because of the expenses associated with the appraisal, testing, sealing, or abatement (removal and disposal) of the substance. These expenses can come up to several thousands of dollars.

Another concern that a buyer may have (which inevitably affects a property's value) is that asbestos may affect the property's ability to be used as collateral. A bank or other financial institution may refuse to finance an asbestos-containing building to prevent liability if the owner abandons the property. This liability could come as the costs necessary to resell, renovate, or demolish a property. It might be damages alleged to have been sustained from exposure to asbestos in the building or environment (if the mineral was improperly disposed of).

Those who eventually decide to purchase buildings or properties containing (or presumed to contain) asbestos will often negotiate a lower price with sellers - the offset amount to be applied toward the assessed costs of abatement or remediation.

How to Disclose Asbestos on a Property

In California, property owners and landlords who become aware of asbestos on their properties are usually required to disclose its existence. The method for disclosure is directed by law but generally involves forwarding a written notice to persons designated to receive it. This includes tenants, employees working in a building, contractors, prospective owners, and lenders.

For pre-1979 buildings, California's asbestos notification procedures are established in the Health and Safety Code, Sections 25915 through 25919.7. Under these laws, owners of public and commercial buildings constructed before 1979, who know that their building has asbestos-containing construction materials (ACCM), must advise occupants (tenants, their employees, other owners) of the following in writing:

A list or description of, or conclusions from, any survey conducted to locate asbestos-containing construction materials within the building and information describing when and where the survey results are available per Section 25917.
Exact locations known to the owner or specified in a survey known to the owner where asbestos-containing construction materials (in any quantity) are present.
General procedures and handling conditions to deter or minimize asbestos disturbance, release, and exposure. Should precise handling instructions be needed to ensure employee safety, the notice must reveal where those instructions can be found.
An overview of any bulk sample analysis, air monitoring, or monitoring executed for or by the owner pursuant to Title 8, Section 5208 of the California Code of Regulations, and information on where the specific monitoring data and sampling procedures can be found.
Potential health risks or impacts identified by a survey or known to the owner that may follow exposure to the asbestos in the building.

This notice (see a sample from Los Angeles County) may also include "a description and explanation of the health action levels or exposure standards established by the federal or state government." However, if it contains such, it must meet the condition stated in Cal. Health & Safety Code § 25915(a).

An owner will not be required to comply with the above notice requirements if they prepare an asbestos management plan as outlined in Section 25915.1. Furthermore, when the owner has no special knowledge of the provisions in (3) and (5), the party must inform the occupants of the lack thereof in the written notice and direct them to contact state or local public health agencies.

Below are the statutory timelines to deliver notice of ACCM to occupants, as stipulated in Section 25915.2:

Within 15 days of the beginning of work in the building (for new employees).
Within 15 days of the effective date of an agreement (for new owners).
Within 15 days of the first receipt of any survey or report mentioning the existence of asbestos in the building. Subsequently, such notice must be forwarded annually to the respective persons. Additionally, if new information pertaining to paragraphs (1) to (5) above is obtained 90 days after the initial notice, a supplemental notice must be forwarded within 15 days of the end of the 90-day period. This rule also stands for other subsequent 90-day periods.

For the latter two timelines, notification to other owners of all or part of a building within a residential common interest development (CID) is not required if the following conditions are satisfied:

The association of the homeowners within the CID posts a visible sign (in large size and bright color) in a prominent location that informs persons entering the building of the presence of asbestos-containing materials. The sign must also tell people where to find additional information about the ACCMs in the building.
Before the transfer of title of a separate interest in the CID, the association or owners declare asbestos in the building. This declaration must usually occur early in the transaction process. (Nevertheless, failure to disclose asbestos in this situation does not invalidate the transfer of title.)

Per the law, any owner who fails to comply with the notice requirements exposes themselves to a misdemeanor charge: a fine of up to $1,000 and a jail term of up to a year.

Asides from the regulations mandating owners of pre-1979 properties to disclose asbestos, owners who want to sell houses of up to four units in California are legally required to indicate the existence of asbestos (if they know of it) to buyers in a disclosure form. Disclosure in these situations should occur regardless of whether the substance is in good condition or not. Failure to provide notification can cause the buyer to cancel the deal or renegotiate the terms of the agreement.

Lastly, for landlords of residential rental properties, the California legislature does not explicitly specify how asbestos disclosure should be conducted. Neither does it require such lessors to go out of their way to check if their buildings contain asbestos.

However, a landlord may include an addendum (using the format in Cal. Health & Safety Code § 25915.1) to inform tenants that a building may contain asbestos and warn them against actions or activities that may release asbestos fibers into the air. For example, hanging objects from a ceiling or wall, drilling into a surface, or attaching fixtures to a ceiling.

The asbestos addendum, which may be incorporated into or attached to a lease/rental agreement, should also provide information on the steps to take upon discovering any damage or deterioration in a unit or the building at large.

California Asbestos Disclosure Form

In any real estate transaction involving the transfer or sale of a property in California, a seller is required to furnish a buyer with a disclosure form, which is officially called a Real Estate Transfer Disclosure Statement or TDS. This document reveals material defects on or affecting the property.

A Real Estate Transfer Disclosure Statement is usually lengthy and includes several yes/no questions that a seller must answer. One of those questions pertains to whether the seller knows of the existence of asbestos on a property. The form also allows additional disclosure statements if the seller has more details about the asbestos issue.

A standard sample of the TDS form can be viewed within the Department of Real Estate's (DRE) Disclosures in Real Property Transactions pamphlet or downloaded from the California Association of Realtors' site. A seller can also obtain this form from their realtor.

However, there is no standard format for the asbestos notification document drafted by owners of pre-1979 buildings in California or the asbestos addendum used in a lease/rental agreement. Interested owners, landlords, or building managers are advised to consult with a real estate attorney to draw up appropriate documents.

Can You Sue for not Disclosing Asbestos on a Property in California

Yes, an individual or business has the right to sue another for failing to disclose asbestos on a property in California. While it is not illegal to sell a building containing asbestos in the state, an owner can become liable for damages (medical expenses, pain and suffering, lost income, attorney fees) if they neglected to disclose the issue while fully being aware of it. However, a building owner's legal liability does not end here.

In civil proceedings relating to asbestos disclosure, two factors are relevant to the California courts in determining if liability should be imposed:

Whether the property owner (the defendant) had "actual knowledge" of asbestos-containing materials or not.
Whether the property owner had "constructive knowledge" of asbestos-containing materials or not.

Actual knowledge covers all scenarios where the owner knew about asbestos in a building and actively concealed it from the plaintiff (the buyer, employee, or tenant). Meanwhile, constructive knowledge deals with a property owner's obligation to have reasonably known about a hazard.

Thus, being unaware of a property's asbestos state does not eliminate liability on the building owner's part in California. A victim can sue for damages if the owner should have known, either by the practice of due diligence (for example, hiring a licensed professional to inspect the premises) or other proper means, that the building contained asbestos. (See Nos. 1003 and 1011 of the California Civil Jury Instructions.)

Additionally, landlords of rental properties in California are subject to the implied warranty of habitability. According to this law, each landlord is responsible for maintaining their premises in a condition fit for tenants. That is to say, even if no law mandates the disclosure of asbestos-containing materials on a property, a tenant can file a lawsuit if their landlord knew or should have known that the building was uninhabitable because of the presence of asbestos, a known health hazard.

How to Sue a Seller for not Disclosing Asbestos an a Property in California

Before suing a seller for not disclosing asbestos on a property in California, it is generally wise to arrange for reliable testing to confirm that the substance is indeed present. Contacting the seller to resolve the issue - whether by renegotiation, reimbursement, remediation, settlement (if the victim was injured, harmed, or suffered a loss), or other appropriate means - should also be a necessary step, as it may be less expensive and faster to resolve the matter privately.

When attempts to handle the issue informally fail, it is in every victim's best interests to consult a legal professional who can advise on whether a potential case exists. Moving ahead to file the lawsuit without legal consultation does not usually benefit the victim because such cases are complex and require substantial knowledge of the laws regarding premises liability, at the very least. A victim will also be informed about their legal options and rights by talking to a lawyer. This includes:

The type of claim to file. For example, a victim can file for fraudulent misrepresentation if the seller masked the hazard by painting over the asbestos or using other nefarious means. However, if the victim was diagnosed with a life-threatening ailment directly from asbestos exposure, the party may be better suited to file a personal injury claim.
The statute of limitations to file a claim usually begins to run from when the aggrieved party finds out about the non-disclosure.
The amount that can be received in compensation (which can include attorney fees), and so on.

Generally, a buyer must present evidence of the seller's cover-up to succeed in such lawsuits. For example, a Real Estate Transfer Disclosure Statement or photographs. The buyer will also have to prove that the seller either knew or should have known of the defect and that they suffered a monetary loss or injury because of it.