Owners of properties that contain loose-fill asbestos should be prohibited from renting them out, rather than just being required to disclose the fact to any potential tenant.

The New South Wales government, through NSW Fair Trading, has made a significant push in recent years to develop the loose-fill asbestos insulation register (LFAI Register) and identify properties in the state that may be affected.

From 30 May this year, owners of a property on the LFAI Register have been required to advise possible tenants that the property contains asbestos, but the Real Estate Institute of New South Wales (REINSW) doesn’t believe that goes far enough.

“We are of the view that if the dwelling is on the LFAI Register it should not be made available for rent and have voiced our concerns with NSW Fair Trading,” REINSW president John Cunningham said.

“REINSW is concerned that unsophisticated tenants and other people in low socio-economic circumstances who may agree to lease premises listed on the LFAI Register will be adversely impacted if they receive a discounted rent,” Cunningham said.

The REINSW also believes that requiring landlords to notify a tenant within 14 days if a property added to the LFAI Register during a tenancy is also insufficient.

“REINSW considers this to be insufficient as it fails to accurately reflect what happens to the lease in the event the premises is listed on the LFAI Register during a tenancy. Pursuant to the Residential Tenancies Act 2010 (NSW), the premises will become wholly uninhabitable and the residential tenancy agreement will become frustrated,” Cunningham said.

“In those circumstances, the landlord or tenant may give the other party a termination notice.”

NSW Fair Trading this week announced it is extending its free loose-fill asbestos testing program across an additional 35 local government areas.

The NSW government is also considering laws that would make it mandatory for a contract of sale in the state to stipulate if a property does or does not contain loose-fill asbestos.

A spokesperson from NSW Fair Trading said the government was committed to helping owners indentify and remedy homes in the state that contain loose-fill asbestos and their stance on rental properties supports that.

“The NSW Government introduced the Voluntary Purchase and Demolition Program (the Program) to address the loose-fill asbestos insulation issue in NSW. The primary objective of the Program is to locate and eradicate loose-fill asbestos insulation from residential properties in NSW,” they said.

“To support this objective, a number of legislative changes have been introduced, including a public register of residential properties that contain loose-fill asbestos insulation and disclosure requirements for landlords and property agents.”

The spokesperson said NSW Fair Trading’s stance on renting properties that contain asbestos does not abdicate landlords of their responsibility to ensure a property is habitable.

“If a tenant finds out that the property they are already renting has been placed on the LFAI Register and they are not concerned, they can choose to keep renting the property. Landlords are still required to ensure the property is habitable and the termination provisions of the Residential Tenancies Act 2010 still apply to both landlords and tenants.

“If tenants are not within the fixed term period of a tenancy agreement and they wish to vacate an affected property, they will need to give 21 days’ notice. If tenants are still within the fixed term period of a tenancy agreement but want to vacate the property as soon as possible, they should contact their managing agent or landlord and seek to negotiate the termination of the lease.”

Homeowners and tenants whose homes contain loose-fill asbestos insulation may also be eligible for financial assistance through the Program.

Financial assistance available to tenants includes $1,000 for relocation per tenant named on the residential lease, $1,000 for the replacement of soft furnishings and up to $850 for counselling services.

Owner-investors are entitled to $1,000 in financial assistance for legal expenses.