The four-page document for agency principals, agents and property managers underlines the responsibilities the industry has under law in relation to asbestos in residential properties. This includes disclosing that a home was once identified as containing the Mr Fluffy insulation and was part of the 1988-93 remediation program.

The Real Estate Institute of the ACT alerted agents last week that they could face fines of $1.1 million if they did not fully disclose the status of homes that had had the dangerous Mr Fluffy asbestos.

The Canberra Times has reported claims that sales had fallen through on houses when the potential buyers had learned of the dangerous status of the home with the possibility of residual asbestos fibres.

Many of the 1049 Mr Fluffy home owners were shocked to discover the home they bought had been part of the program following the ACT government’s mailout in February indicating a lack of disclosure upon sale.

Several real estate agents had also called for clarity over the issue of disclosure following a Mr Fluffy information evening in May.

REIACT chief executive Ron Bell said last week that Mr Fluffy homes were like other stigmatised houses – including those where there had been a murder – for which the history had to be disclosed. He said the industry could not afford to have people ignorant of what was a serious issue and disclosure was the most important thing of all.

The guidelines, which will be released on Friday, recommend agents ask vendors in their initial property inspection whether they are aware of the presence of asbestos in the home and whether the residence was part of the loose-fill asbestos insulation removal program.

It also recommends that agents familiarise themselves with contract documents that could indicate the home had the loose-fill asbestos. This includes the certificate of completion for asbestos removal work indicating that fibres still may be in wall cavities and correspondence to home owners about loose-fill asbestos insulation.

“Real estate and managing agents should exercise due diligence by having processes in place for identifying and managing the risks from asbestos in relation to properties that they manage or are engaged to sell,” the document says.

“Agents should disclose the presence of asbestos to all clients (potential buyers and tenants) as it may impact the property value and its use.”

The guidelines also suggest that policies be developed to encourage owners to obtain risk assessments of homes, including in relation to all forms of asbestos, and that these be included in the contracts of sale and tenancy.

Minister for Workplace Safety and Industrial Relations Simon Corbell said the guidelines were developed to assist the real estate institute after it made inquiries about disclosure of information.

“Agents will have clear guidance on how to manage asbestos issues, including Mr Fluffy loose-fill asbestos insulation, which provides for a consistent and fair approach across the industry,” he said.

Mr Corbell said under the Agents Regulation 2003 agents were required to act honestly, fairly and professionally with all parties in a transaction and not to mislead or deceive any parties in negotiations or a transaction.

“All agents should be aware that not disclosing a stigma that they are aware of can constitute misleading or deceptive conduct when having regard to all the relevant circumstances,” he said.

Mr Corbell said the document, which was developed by the ACT Office of Regulatory Services in consultation with the REIACT, would enable a clear and consistent approach to be taken.

“The issues associated with Mr Fluffy asbestos have caused a great deal of distress amongst ACT residents and it is important to address what can be done to help those affected,” he said.

The ACT government is expected to roll out further measures to assist the real estate sector, home owners, buyers and other stakeholders to manage the risks associated with asbestos.