Article by Lauren Temple, © 2007, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Real Estate Leasing, November 2007
On November 1, 2007, new legal requirements regarding asbestos came into force which significantly increase the responsibilities of landlords and tenants in dealing with asbestos in their buildings and premises.
Lease negotiations will be impacted by parties responding to the Regulation, enacted under the Occupational Health and Safety Act and titled I (Ontario Regulation 278/05).
Expanding The Application Of The Regulation
Section 8 of the Regulation specifies responsibilities in the ongoing management of buildings containing asbestos, and sets out various notice and record-keeping requirements.
Importantly, an owner was previously only required to give notice of the presence of friable (readily crumbled) asbestos-containing materials. The expansion of the application of the Regulation to any asbestos-containing material (material that contains 0.5% or more asbestos by dry weight), including, in each case, insulation, fireproofing and ceiling tiles, is significant, in that it will require greater due diligence on the part of owners.
Virtually every building constructed before the mid-1980s is affected by the new Regulation.
Landlord Responsibilities Under New Regulation
Building owners are now required by law to prepare and keep records relating to the presence of asbestos including, among other things, its location and whether the material is friable or non-friable. These materials must be inspected at reasonable intervals to ascertain their condition and the owner’s records must be updated at least once in each 12-month period.
Building owners are also required to give any other occupier of the building (e.g., tenants) written notice of any information in those records that relates to the area occupied by that tenant. Additionally, the owner is also required to forewarn employers and workers in the building who may do work that involves the material or who may work in close proximity to the material and who may disturb it. As previously noted, this expands the obligations of owners, who were previously only required to notify tenants and contractors of friable asbestos-containing materials. The result is that owners will now be required to advise all of their tenants and contractors if any portion of their premises or work area contains asbestos.
Finally, building owners are also required to establish and maintain a program dealing with the hazards of asbestos exposure, the use, care and disposal of protective equipment and clothing to be used and worn when doing the work, personal hygiene to be observed when doing the work and certain other protective measures and procedures.
Tenant Responsibilities Under New Regulation
If a tenant receives notice from its landlord of the presence of asbestos-containing materials in its premises, the Regulation specifies that it, in turn, will be required to perform certain of the owner’s duties. In particular, the tenant will be required to notify its employees of the information in the landlord’s records, if those employees may do work that involves the material or if they may work in close proximity to the material and may disturb it. As well, the tenant will be required to establish and maintain a program dealing with the hazards of asbestos exposure. Unfortunately, the establishment by the landlord of such a program does not absolve the tenant of establishing its own program.
Some Implications
As a result of having to notify tenants of the presence of asbestos in their premises, landlords will almost certainly be flooded with questions and concerns raised by their tenants. Landlords will need to be able to respond in a manner which avoids widespread or unwarranted panic.
Sophisticated tenants will undoubtedly review their leases to ascertain what rights, if any, they are afforded in connection with asbestos that pre-dated their tenancy. Also, as the new Regulation increases the cost of demolition and build-out, tenants will likely place increased pressure on their landlords to either remove all asbestos-containing material before they take possession or obtain a warranty from their landlord that the premises are asbestos free.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
