Comply with OSHA's Asbestos Notification Requirements to Avoid Penalties, Lawsuits

If you own or manage an office building (or shopping center), you could be at risk of huge, unanticipated costs if you fail to comply with federal asbestos notification requirements. These requirements were set out in an asbestos rule issued by the Occupational Safety and Health Administration (OSHA) in 1995. Despite the amount of time that has passed since then, many owners still aren't fully familiar with the rule and its implications or with the simplest and least expensive method of complying with the rule. If you fail to comply with the rule, you could be hit with OSHA fines as high as $70,000—not to mention potential lawsuits for asbestos exposure, says Connecticut environmental attorney Andrew N. Davis, author of the asbestos chapter of the Environmental Law Practice Guide (Matthew Bender, 2003).

We'll explain the OSHA asbestos rule's notice requirements and offer suggestions for how to comply with them. Plus, we've given you a Model Lease Clause (see p. 5) that you can adapt and use in your leases to address these requirements.

What Are the Asbestos Notification Requirements?

The OSHA asbestos rule consists of two OSHA regulations, Davis points out.

“General Industry Standard.” This regulation applies to occupational exposure to asbestos in the general industry (for example, asbestos operation and maintenance personnel work), he says.

“Construction Industry Standard.” This regulation applies to occupational exposure in the construction industry (for example, renovations to rental space), Davis says.

Whichever regulation applies, the OSHA asbestos rule requires owners and managers of all pre-1981 commercial buildings to, among other things, notify tenants about the presence and location of asbestos-containing materials (ACMs)—and presumed asbestos-containing materials (PACMs)—that the tenants' employees or contractors could come in contact with while doing certain work in the building. The rule also makes tenants responsible for notifying their employees and contractors about the ACMs and PACMs. The rule also applies to buildings built in 1981 or later that are known to contain ACMs.

If you don't notify your tenants about the presence of ACMs and PACMs, you may be asking for trouble, Davis warns. For example, a tenant's electrician may disturb asbestos while doing rewiring in the building for the tenant. If you didn't notify the tenant about the location of the ACMs that the electrician disturbed, you may face OSHA fines of up to $7,000 per day per “serious” violation—not to mention potential lawsuits for asbestos exposure, says Davis. And if the violation is willful or repeated, you may have to pay as much as $70,000, he adds.

Which Buildings Are Covered?

Both regulations in the OSHA asbestos rule affect the following buildings:

All buildings with ACMs. If you know or should know that you have ACMs in your building-—regardless of the year the building was constructed—you must comply with the notice requirements set out in one or both regulations of the OSHA asbestos rule, depending on what type of work is contemplated, says Connecticut environmental attorney Cindy J. Karlson. But the OSHA asbestos rule is vague about the extent of your obligations. It says you must exercise “due diligence” to find out if your building has ACMs. But it gives no clear examples of what steps you must take to do that.

All pre-1981 buildings. If your building was built before 1981 and has PACMs, you must comply with the notice requirements set out in one or both OSHA regulations, depending on the type of proposed work (for instance, general or construction activities), says Davis.

PACMs are certain materials that were installed in many buildings before 1981, notes Davis. They're presumed to contain asbestos because of the nature of the material and because it was manufactured during a period when asbestos was used, he explains. They include pipewrap (known formally as thermal system insulation (TSI)), vinyl flooring, asphalt-containing tile, sprayed-on or troweled-on materials (such as fireproofing materials), and acoustical plaster. But if these materials were installed in your building in 1981 or later, they're not presumed to contain asbestos, notes technical consultant Robert E. Brown.

Should You Conduct Survey to See if You Have PACMs?

If you own or manage a pre-1981 building with PACMs, you can perform a survey to find out if the PACMs actually contain asbestos, says Davis. You don't have to perform such a survey, but in most instances, it's better to do so, he notes (see box, p. 3).

If you conduct survey. If the survey shows that the PACMs don't contain asbestos—that is, the PACMs don't contain more than 1 percent asbestos—you have no notification requirement, says Davis. But if the survey shows that the PACMs in your building do contain asbestos and are, thus, ACMs, you must notify the affected tenants of their location and condition. You can do this by giving the tenant a copy of the survey or a notice summarizing the results of the survey, says San Francisco attorney Michael J. Steel.

Make sure you get the tenant to sign a form acknowledging that it has gotten and reviewed the survey. This is important to comply with the asbestos rule's record-keeping requirements, Davis notes (see box p. 4).

If you don't conduct survey. If you don't conduct a survey, you must treat the PACMs as ACMs, warns Davis. This means you must notify each of the affected tenants of the exact location and condition of the PACMs if there's a chance their employees or contractors may come in contact with them, he explains. In the long run, it's much more expensive and complicated to treat every PACM—that is, every floor tile and layer of insulation—as an ACM, he warns. That's because, in the absence of survey information showing otherwise, you're forced to continually comply with expensive and time-consuming worker protection requirements for all PACMs, Davis says.

When Must Notice Be Given?

The OSHA asbestos rule sets out specific notice requirements that you must follow. For example, the General Industry Standard requires that you notify “employers” whose employees may be exposed to these ACMs or PACMs in the course of certain work, says Karlson. Tenants are considered employers under that regulation. The Construction Industry Standard requires that you notify tenants, contractors, and your employees who may be exposed to ACMs or PACMs in or near a construction area at your building or center, adds Davis. When must you give them this notice? Before they or the tenant's employees or contractors do any work that may disturb any ACMs or PACMs, says Davis.

Work that may disturb ACMs or PACMs includes the following:

• Removal of either TSI or of surfacing ACMs and PACMs (those are sprayed-on or troweled-on material, such as textured ceiling paint or fireproofing material);

• Removal of ACMs or PACMs that aren't TSI or of surfacing ACMs and PACMs;

• Repair and maintenance of operations that are likely to disturb ACMs or PACMs;

• Custodial and housekeeping activities where contact with ACMs or PACMs may occur;

• Salvage work of structures with ACMs and/or PACMs;

• Construction, alteration, repair, maintenance, or renovation of structures with ACMs and/or PACMs (such as plumbing, electrical, or HVAC work); and

• Transportation, disposal, and storage of products containing ACMs and/or PACMs on a construction site.

Here's where the rule gets complicated. Although you must give a tenant notice before its employees or contractors do any of the above work, it's almost impossible for you to know beforehand that this work will occur. For example, a repair person hired by a tenant may inadvertently disturb ACMs or PACMs by simply cutting away a piece of wallboard that contains asbestos to fix a leaky pipe or to install a telephone or other telecommunication jack, says Davis.

Protect Yourself by Notifying Tenant in Lease

The best way to protect yourself is to notify your tenants as soon as possible about any ACMs or PACMs that their employees or contractors may come in contact with—regardless of whether you know if regulated work activities will occur, says Davis. And the easiest way to accomplish this goal is to put a notice in the lease, advises Steel.

You could just send the tenant a letter giving the location of the ACMs or PACMs. But then you risk having the tenant deny having received the letter, warns Steel. Or the tenant may argue that it wasn't properly notified because the letter was sent to one of its employees who didn't understand its significance, Steel adds.

If you put the notice in your lease, the tenant can't argue that it never got it. And it would be tough for a tenant, especially a sophisticated tenant or one represented by an attorney, to argue that it didn't understand the notice's significance, explains Steel. Putting the notice in the lease also means that the tenant will get the notice before it can do any work in the space that might inadvertently trigger the OSHA asbestos rule.

Complying with the notice requirements doesn't relieve you of potential liability for hazardous conditions related to asbestos. But it provides evidence of your efforts to comply with OSHA and might help you avoid or lessen OSHA penalties and fines and fight lawsuits.

What Clause Should Say

To put an asbestos notice in the lease, add an asbestos notification clause, like the Model Lease Clause, to your lease. Steel has successfully used a similar clause to comply with a notice requirement in California's asbestos rule. Make sure your asbestos notification clause addresses the following points:

Location of asbestos. The clause should spell out exactly where the ACMs and/or PACMs are located, says Steel [Clause, par. a]. Give as specific a location as you can, say Davis and Karlson. Don't refer just to floor tiles when only the floor tiles in the leased space's storage room are PACMs or ACMs, says Davis. You may wish to attach a building plan that specifically identifies the location of the ACMs and/or PACMs to avoid any potential confusion, he advises.

You must notify the tenant about any ACMs and/or PACMs that its contractors or employees may come in contact with during the work activities listed in the OSHA asbestos rule, says Davis. This generally means notice about those ACMs and/or PACMs that are inside the tenant's space because that's usually where the lease allows the tenant's employees or contractors to do work, he explains. To play it safe, you may want to notify the tenant about ACMs and/or PACMs that are in the common areas or another tenant's space where they could be affected by the tenant's work, says Steel. For example, if there are ACMs in the space next door or in the common area adjacent to the tenant's space, the tenant might disturb them when drilling into the wall in its own space, says Brown. Or if the tenant has a right in the lease to install an antenna; it could need notice about ACMs and/or PACMs on the roof.

Information from asbestos survey. If you've had an inspector conduct an asbestos survey of your building, refer to the survey in the lease and attach a copy of the survey report to the lease as an exhibit, Davis and Karlson recommend [Clause, par. a(i)]. Not only will this give the tenant a precise reference for the location of the ACMs (or PACMs that must now be considered ACMs), it should also help reassure the tenant that the information you're providing is reliable, says Karlson.

Location of signs. Spell out the location of all signs at your building that are required by the OSHA asbestos rule, says Brown [Clause, par. a]. The OSHA asbestos rule requires you to post signs at the entrances to mechanical rooms or areas where work that may or will disturb the ACMs or PACMs is being performed, add Davis and Karlson. OSHA representatives agree that the asbestos regulations don't require signs to be posted in every instance where ACMs and/or PACMs are present, says Davis. For example, no signs are required to be posted in a building entranceway, even though ACMs or PACMs are present unless there's a planned activity or removal work that may disturb the ACMs and/or PACMs, say Davis and Karlson. When work is being conducted that may disturb the ACMs and/or PACMS, signs must be posted that indicate which ACM or PACM is present, its location, and the appropriate work practices to be followed to ensure that it won't be disturbed, Brown says.

Although OSHA requires labeling of ACMs and PACMs, the OSHA asbestos rule allows signs to be used instead, as long as the signs contain the same information that OSHA requires for labeling, Brown says. So, for example, if employees will be drilling through flooring that contains ACMs or PACMs in a common equipment room, you must post a label for asbestos flooring (or a sign containing the same information) in that room, say Davis and Karlson.

Tenant's acknowledgment of notification. Have the tenant acknowledge in the lease that it got the notification about the presence and location of the ACMs and/or PACMs and agree not to remove or deface the OSHA-required signs, recommend Brown and Steel. You may even want to get the tenant to sign or initial this clause, adds Davis [Clause, par. a(ii)]. Or you could have it sign a separate acknowledgment, he says.

Tenant's notification of employees and contractors. You want to be sure that the tenant passes on your information to its employees or its contractors before they do work covered by the OSHA asbestos rule that might disturb the asbestos, says Davis. So require the tenant to get a signed acknowledgment from any employee or contractor who's scheduled to do such work. Attach an acknowledgment form to the lease as an exhibit, and require the tenant to use it [Clause, par. b].

The acknowledgment should say that the employee or contractor understands that there are ACMs and/or PACMs in certain locations. The tenant's employee or contractor should also acknowledge that any work he or she does won't disturb the ACM's and/or PACMs and that he or she will perform all necessary actions required by OSHA or any other federal, state, or local law or regulation—including wearing protective gear and following required safety precautions, says Davis.

Practical Pointer: Change your lease's alterations clause to reflect the notification requirement, advises Davis. That clause usually lists the reasons for which you can reasonably withhold your consent to an alteration in the space. To that list, add the tenant's failure to get a signed asbestos acknowledgment from its employee or contractor doing the work, he says.

Will OSHA Come After You if You Violate Rule?

So far, OSHA has generally been cracking down on tenants, rather than owners and managers, that violate their obligations under the OSHA asbestos rule, Davis says. But owners or managers have been targets when they directly hired the contractors performing the work, he says. And there's no telling when OSHA may decide to direct more pressure toward owners and managers, he warns.

CLLI Sources

Robert E. Brown: Principal and Director, EHS Compliance and Training Programs, Specialty Technical Consultants, Inc., 2100 Embarcadero, Ste. 204, Oakland, CA 94606; (510) 533-4067; RBrown@stcenv.com.

Andrew N. Davis, PhD, Esq.: Partner, LeBoeuf, Lamb, Greene & MacRae LLP, 225 Asylum St., 13th Fl., Hartford, CT 06103; (860) 293-3500; ADavis@LLGM.com.

Cindy J. Karlson, Esq.: LeBoeuf, Lamb, Greene & MacRae LLP, 225 Asylum St., 13th Fl., Hartford, CT 06103; (860) 293-3500; CKarlson@LLGM.com.

Michael J. Steel, Esq.: Member, Pillsbury Winthrop LLP, 50 Fremont St., San Francisco, CA 94105; (415) 983-7320; msteel@Pillsbury Winthrop.com.

Sidebar

What Asbestos Survey Involves

If you choose to conduct a survey to identify which presumed asbestos-containing materials (PACMs) in your building are actually asbestos-containing materials (ACMs), the survey should include analytical sampling conducted according to the Asbestos Hazard Emergency Response Act, says Connecticut environmental attorney Andrew N. Davis. You'll need to hire a licensed asbestos inspector to conduct the survey and collect the samples, he says.

When selecting an inspector, be sure to request a scope of work and budget estimate to help avoid unexpected cost overruns, Davis advises. Also, check the inspector's track record with the appropriate state agency. And get written confirmation from the inspector that you and third parties will be able to rely on the final report (especially if you're thinking of selling the building or getting insurance coverage), he says. Proficient laboratory technicians must then analyze the samples, he adds.

Sidebar

Record-Keeping Requirements

The asbestos rule requires you to keep written records that identify the location and quantity of asbestos-containing materials and/or presumed asbestos-containing materials in your building, says Connecticut attorney Andrew N. Davis. Davis and San Francisco attorney Michael J. Steel say the written records should include:

• All survey results;

• Documents proving that you provided the survey results to the tenant; and

• Documents proving that the tenant acknowledged receipt of those results.

You must keep these records for as long as you own the building, says Davis. And you must transfer all of these records to the next owner of the building, he adds.