It is hard to believe that it has been almost 18 months since the ACT Government’s Buyback and Demolition Scheme was first announced, and a year since we wrote our first article on this topic (for further Mr Fluffy home articles see here and here).
It was October 2014 when the ACT Government first announced the Loose Fill Eradication Scheme which was to be supported by a loan from the Commonwealth of $1 billion in order to buyback affected properties, remove loose asbestos fibres, and remediate the site for future construction.
Following closure of applications for the Voluntary Buyback Scheme on 30 June last year, attention moved towards the safe disposal of loose fill asbestos within those properties. In August 2015, an indicative demolition schedule was released by the Taskforce. As at 19 February 2016, 84 homes have been demolished (a copy of the current demolition schedule can be found here).
With the Loose Fill Eradication Scheme moving into its next phase, the Asbestos Response Taskforce had to re-examine earlier concepts such as ‘Asbestos Management Plans’ and ‘First Rights of Refusal’. The finer details of these schemes have now been finalised and released to the public.
Asbestos Management Plans
An Asbestos Management Plan is required to be implemented by those affected home owners who have chosen to continue to reside in their Mr Fluffy home.
Those still residing in a Mr Fluffy home are required to have prepared, at their expense, an Asbestos Management Plan by 1 February 2016 with implementation due by 30 June 2016.
As well as the preparation of the Asbestos Management Plans, My Fluffy residents are now also subject to onerous disclosure obligations. These include:-
- Notifying WorkSafe ACT at least 5 days prior to any intended building or significant maintenance works which may disturb loose fill asbestos within the property;
- Informing all visitors that the property contains loose-fill asbestos; and
- Making copies of the Asbestos Management Plan available to all visitors and tradespeople working on the property
Right of first Refusal
On surrendering an affected property to the Territory, home owners were able to make an election to either retain or waive their right to a right of first refusal.
For those who elected to retain the right, the Territory is required to first offer to sell the remediated block back to the home owner at ‘market price’ before it is offered for sale to a third party.
It is estimated that approximately 500 Mr Fluffy home owners have elected to retain their right of first refusal.
Exercising the Right & “Market Price”
Affected home owners who have maintained their rights will be first offered to purchase the property at “market price” as determined at the time of purchase.
The “market price” is determined by the Land Development Agency taking into account independent market valuations. The market price as determined by LDA is non-negotiable and there is no process for review.
Those affected home owners who elect to purchase the property will also be obliged to:
- Construct at least one residential property on the land within a specified timeframe; and
- to live in the property for a period of at least 6 months following the issuing of a Certificate of Occupancy and cannot sell or dispose of their interest in the land until they have fulfilled this requirement.
What will a Homeowner Aquire?
The Taskforce will make a determination as to the scope of the demolition works which may include retaining particular improvements on the block of land.
What this means is that affected home owners may be purchasing a partly cleared block. In reality, this may also result in further costs for the affected home owners when looking at reconstructing a home on the land.
For those who have retained their right of first refusal, the Territory will consult with them when determining the scope of demolition works. There is, however, no guarantee that the agreed retained improvements will not be damaged or destroyed during the demolition process. The Territory has also made it clear in these circumstances that no compensation is payable.
Those affected home owners who exercise their right of first refusal will be required to enter into a Contract for Sale with the Taskforce within 60 days of exercising their right. They will also be required to pay a deposit.
If the affected home owner does not purchase the property then it will first be offered to ACT Government agencies for sale and, failing that, it will be sold on the open market by way of public auction with a reserve price no less than what was offered to the affected home owner.
If you would like to find out more about Mr Fluffy homes, ACT Government’s Buyback Scheme or exercising your First Right of Refusal, please contact Emma Bragg on (02) 61403263 or email [email protected].