Before You Demolish: The Asbestos Check That Runs Before Your First Development Decision

Before You Demolish: The Asbestos Check That Runs Before Your First Development Decision

A block can look like a simple knockdown-and-build and still carry a demolition cost you never priced. The single most common reason is asbestos. It is not a reason to walk away from an older house, but it is a reason to test the question before you rely on a feasibility.

This is the check that runs before your first development decision on an older dwelling, and it changes numbers in a way that is easy to miss.

Why an older house is a different kind of site

Asbestos-containing materials were widely used in Australian buildings for most of the twentieth century, and the Asbestos Product Guide published by the Asbestos and Silica Safety and Eradication Agency records where and when those products were used, including the brand names where they are known.

If asbestos material is in good condition it poses little health risk. The risk rises sharply when it is disturbed by cutting, drilling, water blasting or demolition, because fibres are released into the air. SafeWork NSW states that around 4000 Australians die every year from asbestos-related diseases, which it notes is double the road toll.

For a developer, that is not only a safety issue. It is a cost and programme issue, and it sits entirely inside your demolition line.

The threshold that actually changes your budget

The practical trigger most investors need to understand is licensing. On the SafeWork NSW asbestos guidance, a licensed professional must be used to remove friable asbestos, and also when there is more than 10 square metres of non-friable (bonded) asbestos. SafeWork NSW goes further and recommends using a licensed professional for any amount of non-friable asbestos because of the risk in disturbing it.

In plain terms: a few square metres of bonded sheeting and a whole fibro-clad dwelling sit in different regulatory and cost categories, even though both are 'an asbestos job'.

Victoria applies its own duties through WorkSafe Victoria, so if your site is outside NSW, do not carry an NSW assumption across state lines. Rules, licence classes and clearance processes differ by jurisdiction and by the type of material involved.

What the check looks like in practice

1. Date the dwelling. Establish the construction era from title records, council records or a building inspection, then compare against the product guide's date ranges.
2. Look before you cut. A competent person should inspect the actual materials in the areas you intend to disturb, not just the house generally.
3. Separate friable from bonded. The licence class, control measures and cost depend on which you are dealing with and how much there is.
4. Price removal as a separate line. Do not bury it in a demolition allowance, or you will never see the variance when it moves.
5. Check clearance and disposal. Removal is not finished until clearance and lawful disposal are dealt with. The agency's householder guidance confirms that waste facilities often accept asbestos only at set times, and that you should contact the facility before transporting anything.

The TPC deal lens

Treat asbestos as a feasibility variable with three numbers attached: removal cost, programme delay, and the cost of the investigations you need to price it properly. A site that only works if asbestos is absent is not a site that works; it is a site with an unresolved cost.

A practical test before you exchange: if the asbestos question resolved badly, would the deal still clear your minimum margin? If the answer is nobody has priced it, you are not underwriting a deal, you are underwriting a hope.

Where investors get this wrong

• Assuming a demolition quote includes asbestos removal when it was never scoped that way.
• Treating the 10 square metre threshold as a free allowance rather than a licensing boundary.
• Reusing a cost estimate from a different state, where duties and licence classes differ.
• Leaving the investigation until after settlement, when the cost is yours and your options are gone.

The check is cheap relative to the decision. Do it while you still have the option to renegotiate, adjust the programme or walk away.

Next step: put a named asbestos line in the due diligence budget for any dwelling built before the mid-1980s, and get a competent person to look at what you actually intend to disturb.

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