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Mr Fluffy clean up could become Australia’s largest acquisition scheme

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Media Release

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The ACT Government’s announcement of a voluntary buyback of houses that contain “Mr Fluffy” loose fill asbestos will result in Australia’s largest mass acquisition of residential property, says national law firm Slater and Gordon, but serious questions remain about the rights of affected homeowners to negotiate with the Government and the adequacy of government-funded legal support.

The buyback scheme comes after many home owners across the ACT and New South Wales were told earlier this year that clean-up efforts in the 1980s and 1990s had not adequately rid homes of dangerous asbestos dust.

The ACT Government’s Asbestos Response Taskforce concluded that the only enduring solution to the danger posed by the loose fill asbestos is the demolition of all affected homes.

The Federal Government announced yesterday that it would loan up to $1 billion to the ACT Government, opening the door for more than 1,000 affected homes to be acquired. The ACT Government released details of their proposed voluntary buyback scheme last night.

The scheme will become the largest scale residential acquisition scheme in Australian history. By way of contrast, around 200 properties will be acquired, both voluntarily and compulsorily, for Victoria’s East West Link Project and a similar number will be affected by Sydney’s NorthConnex and WestConnex projects.

Slater and Gordon senior associate and land acquisition specialist, Manisha Blencowe, said that this scale of acquisition was unprecedented.

“Large-scale acquisitions are usually required for major infrastructure projects, however nothing of this type has been proposed before,” she said.

However, Ms Blencowe expressed concern at several features of the Government’s proposed scheme.

“Although it is pleasing that the Government has made a commitment to assess payments at the market value of the property as if it was not affected by the loose fill asbestos, the scheme omits many features of the compulsory acquisition process, including providing compensation for loss suffered as a result of the acquisition, payments to assist in finding a replacement property, and the provision of legal assistance throughout the process.”

Ms Blencowe emphasised the importance of receiving expert legal advice on the subject of property acquisition.

“Property acquisition is a complicated area of law and the provisions regarding entitlements can be interpreted in unfavourable ways by acquiring authorities,” she said.

“In our experience, obtaining expert legal and valuation advice is critical to homeowners obtaining a fair result from the process.”

A distinctive feature of the circumstances surrounding the Mr Fluffy situation was the number of homes affected.

“A significant issue that will arise for home owners who are looking to replace their property will be the potential for significant distortion in the property market,” she said.

“A large-scale removal of properties from the market at the same time that a large number of people seek to purchase a property is likely to cause a significant market distortion.

“This may present a real barrier to those affected being able to replace their property. We look forward to seeing what the Government scheme can offer by way of protection for affected owners in this context.” 

Slater and Gordon are leaders in the property acquisition field and are currently acting for clients affected by both compulsory acquisition and voluntary purchase schemes including the East West Link Project in Victoria, NorthConnex and WestConnex in NSW and the North South Corridor Upgrade in South Australia.