Question: We purchased our house in 1961. The basement floor is entirely covered with tile. A family friend who manages commercial real estate told us that those nine-inch tiles are asbestos. We were advised to either remove these tiles or cover them with concrete. We plan to sell the home shortly. What are our legal obligations and what should we do?

Answer: You really have two choices: remove (or cover) the asbestos tiles or disclose their existence to potential purchasers.

In many parts of the country, sellers are required to disclose certain conditions relating to the property -- and asbestos is one area which obviously must be disclosed. However, the experts in this area agree unanimously that if the asbestos is encapsulated (covered up) it is not a hazardous substance. However, when you start to make repairs, and start chipping away at those tiles, you are going to spread the asbestos molecules around your house.

First, I would find out what it will cost to remove the tiles. You should understand that when you deal with such hazardous materials, any contractor that will remove them must be certified by the Environmental Protection Agency (EPA) as an approved asbestos abater. As such, there will be an additional cost to you over and above the mere removal of your basement tiles. The abater must secure the area to make sure that asbestos particles will not get into the air, nor land on other items in your basement, thus defeating the removal purpose.

Then, determine the cost of adding concrete over the tiles. This may be less expensive than removing all of the tiles, but it may also cause your basement to look unsightly or even shoddy.

Once you have determined these costs, you will be in a better position to determine whether or not you want to incur the expense.

Clearly, it is better to remove the asbestos. Some potential purchasers -- especially those with young children -- may get turned off when they learn of this environmental problem.

On the other hand, you are not legally obligated to clean out the asbestos. You certainly can sell your house with all its infirmities -- including asbestos -- but you must carefully disclose to a potential purchaser that there is a problem.

Some purchasers will walk away. Others may use this as a bargaining chip and try to get you to reduce your asking price in light of the asbestos. Here, again, you have a choice: if, for example, it will cost you $7,500 to totally remove all asbestos from your house, clearly you do not want to give a potential purchaser a cash credit at settlement for more than this amount.

Many potential purchasers plan to do major renovations in their new home once they go to settlement. While it might cost you $7,500 to hire the asbestos abater, your purchaser may be able to get a better price, since their contractor will already be doing work in the house. And thus, the purchaser may be willing just to receive a credit at settlement, rather than forcing you to do the work before the house is conveyed.

Thus, there is flexibility and negotiability here. The potential purchaser will make you an offer, and may lowball the price based on the existence of the asbestos. Since you are now armed with information as to the real cost of the abatement, you are in the position to bargain with the purchaser. You can offer a smaller credit, or you can agree to have the asbestos removed prior to closing. My experience, however, is that most buyers would prefer to get the credit, rather than be forced to rely on a contractor selected by the seller.

In any event, disclosure is the name of the game. You can be sued if you do not disclose. But you avoid litigation (and aggravation and legal fees) by fully and completely disclosing -- in writing -- the existence of your asbestos tiles. Most insurance companies specifically decline to get involved when there is a hazardous material claim.

Published: December 22, 2003

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Author of the weekly Housing Counsel column with The Washington Post for nearly 30 years, Benny Kass is the senior partner with the Washington, DC law firm of Kass, Mitek & Kass, PLLC and a specialist in such real estate legal areas as commercial and residential financing, closings, foreclosures and workouts. Mr. Kass is a Charter Member of the College of Community Association Attorneys, and has written extensively about community association issues. In addition, he is a life member of the National Conference of Commissioners on Uniform State Laws. In this capacity, he has been involved in the development of almost all of the Commission’s real estate laws, including the Uniform Common Interest Ownership Act which has been adopted in many states.