Asbestos in your building? Beware of liability

Real Estate Weekly, July 22, 1992 by Walter Cohen

If your building is one of the many thousands in the City of New York with pipes, boilers or other insulation containing asbestos, you should be aware of your responsibility with regard to the existence, disturbance,,removal, storage, and transportation of asbestos containing material.

The problem with broken or damaged insulation containing asbestos may come to your attention when you are refinancing or selling your building or when someone contacts the New York City Department of Health which results in an inspection of your premises. If the sample taken during that inspection is positive for asbestos, an order will be issued by the Commissioner of Health directing the owner to abate the condition within a prescribed time. The order will designate the specific areas to be abated and in addition to the areas specified, the order also requires the removal of all other damaged or broken asbestos containing material on the premises. After the time to abate has elapsed, the Health Department inspects the premises to determine if the owner had complied with the Commissioner's order. If it is found that the Commissioner's order had not been complied with, then a violation is issued and a hearing scheduled at the Administrative Tribunal of the New York City Department of Health. If found in violation after a hearing, a penalty is imposed. My experience has been, that owners correct the specific areas indicated in the Commissioner's order, but neglect to abate asbestos in all other areas not specified in the order.

In the City of New York, abatement of asbestos containing materials comes under the jurisdiction of the New York City Department of Environmental Protection. All asbestos handlers and supervisors have to be certified and licensed by the City of New York and all third party air monitors have to be certified by the State of New York. All abatement must comply with the Asbestos Control Program Rules and Regulations. Depending upon the number of rules and regulations violated, an owner of a building could face penalties anywhere between $1,000 and $100,000. Adjudication of violations takes place at the Environmental Control Board.

If an owner hires an asbestos abatement company which employs licensed asbestos handlers and supervisors, could the owner become liable for infractions incurred by these licensed handlers and supervisors? Unfortunately, according to the interpretation of Section 8000(b) of the Asbestos Control Program Rules and Regulations by the Environmental Control Board, the answer is yes. Both the owner and contractor are cited, and if a violation is found, both owner and contractor are required to pay penalties.

This imposition of two penalties, one against the contractor and one against the owner, for the same infraction, is now being challenged in the New York State Supreme Court.

When an owner hires an asbestos abatement contractor, the contract should provide a hold harmless and indemnification on clause whereby the contractor agrees to be responsible for the payment of any penalties imposed by any governmental agency. It is obvious, that when selecting an asbestos abatement contractor, a low bid should not be the only consideration. Confidence that the abatement company will be capable of indemnifying the owner should also be an important factor in making your selection.

In the City of New York, storage and transportation of asbestos containing materials are regulated by the New York City Department of Sanitation. Violations of the rules and regulations promulgated by this agency could result in substantial penalties imposed by the Environmental Control Board. If the owner has loose asbestos containing material or asbestos containing material stored in garbage bags or stored any place in or about his premises or placed out for collection, the owner could be liable for penalties ranging from $3,000 to $25,000 for each infraction. Each incident could give rise to numerous infractions and thereby lead to substantial penalties. The fact that the owner did not know that the material stored or put out for collection contained asbestos is not considered a defense. In many cases owners have been cited for violations arising out of the same incident by both the Department of Environmental Protection and the Department of Sanitation.

If an owner is going to clean out a basement, do any demolition or construction or remove any insulation whatsoever, he should first verify that the material does not contain asbestos. This should be done by employing an asbestos investigator licensed by the Department of Environmental Protection. Failure to identify this material and properly handle asbestos containing material, could prove very costly.

Walter Cohen, formerly an administrative law judge for the New York, City, Environmental Control Board and all Attorney for the New York City Department of Health, is now with the Law Firm of Cohen & Hochman.