This week the ACT Government announced that it will offer to buy back the 1,021 Canberra houses contaminated by ‘Mr Fluffy’ loose fill asbestos insulation under a programme called the Loose Fill Asbestos Insulation Eradication Scheme. The announcement follows a report by the Asbestos Response Taskforce which recommended that the demolition of affected homes is the only enduring solution. The Commonwealth Government has agreed to provide the ACT Government with a $1 billion concessional loan to fund the Scheme.
What is the ACT Government offering for the homes?
Under the Scheme, the ACT Government has offered to buy the affected properties at market value as if they were free from asbestos and including any improvements on the property. This value will be determined by taking the average of two independent valuations of the properties and a dispute resolution process will be established to deal with the disputes. The valuations will be paid for by the ACT Government. For properties sold or agreed to be sold between 18 February 2014 and 28 October 2014 the buyback offer will be at the agreed sale price in the contract for sale.
The ACT Government will also grant owners who participate in the Scheme a stamp duty concession on their next purchase of property in the ACT.
What will the ACT Government do with the land?
The Homes will be demolished and the soil under the homes removed. Other free standing structures on the land such as pools, retaining walls and sheds will be considered on a case-by-case basis.
Once the blocks have been cleaned, the ACT Government will then consider consolidating or unit titling blocks where appropriate to maximise the value of the blocks.
Once the houses are demolished and the land remediated, blocks will be made available for re-sale. Homeowners will be given the first option to buy back the land for their own occupation at market value. However, where blocks have been subdivided, home owners will only be offered smaller, subdivided blocks.
Emergency Financial Assistance
The ACT Government will provide financial assistance for short term accommodation to people who live in homes contaminated by Mr Fluffy and choose to participate in the Scheme in the amount of $10,000 per household plus $2,000 per child. Tenants of contaminated houses will also be entitled to the relocation assistance.
When will this happen?
It is anticipated that the Scheme will take up to 5 years to complete.
Homeowners will have six months from January to July 2015, to nominate whether they want to participate in the Scheme. Demolition will be stages with owners who have already been advised to leave their homes given priority. Other applications will be dealt with in the order the applications are received.
What happens if a home owner doesn’t accept the offer?
Owners can elect not to participate in the Scheme. However, homeowners who wish to stay in their affected properties beyong July 2015 will have to comply with stringent health and safety requirements stipulated by the ACT Government at their own expense. These requirements will significantly affect the use and amenity of the home. There is no guarantee that the government will seek to compulsorily acquire the properties at the end of the Scheme.
More information, including the Asbestos Response Taskforce report, is available at http://www.act.gov.au/asbestos-response-taskforce.