ASBESTOS TESTING ISSUE

[Tim Silvers]

We wholesaled a small multi-family deal to one of our buyers. The property had a sewer line damage and an insurance claim that had since settled. Seller provided us with an asbestos report which showed that 6 samples were done and all samples tested negative. Buyer purchased as-is. Subsequent to closing escrow, one of the units caught fire and in the process of the fire investigation, it was discovered that there was in fact asbestos behind the drywall. I have since learned there are 2 layers of drywall and you have to test both layers. Apparently, the testing company did not test for both layers. In addition, i have learned that there should've been about 30 samples tested for as opposed to only 6. I'm concerned the asbestos testing company's defense may be that they only tested the units for the damage related to the sewer line backup and not a full inspection. Don't know if that makes any sense.

What recourse does my buyer have, if any, at this point, as he is obviously dissatisfied with the purchase and is blaming the seller for non-disclosure even though the seller claims the report they sent is the only report they are aware of.

[Greg Scott]

Asbestos is not nuclear waste.  In the early part of the 20th century insurance companies gave you a discount the more asbestos you had.  Imported drywall as late as 1985 still had traces of asbestos.  There is still a lot more of it out there than you would think.  Most if it is not in a condition that it would cause any health issues.

If the Asbestos Containing Material (ACM) was undisturbed, it should have been fine.  Since this ACM was under another layer of drywall, it would have been considered encapsulated, with negligible risk to anyone.  How much testing should have been done due to the sewer damage would be a requirement of local laws.  I suspect the testing company knew the appropriate number of samples.

Hopefully the owner has good insurance.  If so, insurance will cover for the cleanup and repair.