Asbestos in the Joint Compound - Insurance & Value Advice needed

[Rob Chiang]

I am in contract now for an apartment complex less than 16 units, built before 1980. 

During the due diligence period, Seller provides a positive test for asbestos in the joint compound.  (previous environmental report).   Funny enough, it tests negative for lead based paint.

I still have time to cancel the deal.  Haven't decided what to do yet.  

It's easier to deal with a popcorn ceiling because people don't generally touch the ceiling.  Don't touch it and disturb it, no problem.

If I end up buying the deal, asbestos disclosure in the lease becomes mandatory as well as prohibiting tenants from puncturing the wall, etc.  However, it's easy for them to forget when wanting to hang a picture, etc. a nail goes through the wall/joint compound.  Also, any time a maintenance worker creates dust that can be a problem.  

Are there any insurance policies that will cover a landlord for asbestos exposure from their tenants?  I am having trouble getting this answer quickly.  It's one thing to get a good deal. It's another to be able to sleep good at night.

Questions:

1. Have any of you been sued over asbestos?

2. How much % less is the property worth now that this is NEW info?

3. Would you cancel the deal or proceed forward with a retrade?

Any help is appreciated.