Updated August 16, 2026
Almost every pre-1978 Los Angeles apartment building has one or both, and buyers know it. Their presence is not a defect that stops a sale — it is an assumed condition of the vintage, priced into how the market values older stock. What matters is disclosure and management. Federal law requires specific lead-based paint disclosure for residential properties built before 1978, including a written disclosure, the EPA pamphlet, and any records or reports the owner has. Asbestos disclosure follows the general California materiality standard: if you know it is there, you disclose it. The genuine cost exposure is not in the material sitting undisturbed in the building — it is in what happens when someone renovates.
The federal requirement applies to residential housing built before 1978 and is not discretionary.
Written disclosure of known lead-based paint and hazards. What you know, stated plainly. "No knowledge" is an acceptable answer if it is true.
Delivery of any records or reports you have. Prior testing, abatement records, risk assessments. If they exist, they go over.
The EPA-approved information pamphlet. Provided to the purchaser.
Signed acknowledgment retained. Both parties sign, and the records are kept.
The exposure for skipping this is real and is one of the few disclosure failures with a federal penalty attached. It is also trivially easy to comply with, which makes it a strange thing to get wrong — and yet it is one of the more common omissions on smaller owner-sold LA buildings.
There is no equivalent federal transaction-disclosure regime for asbestos in residential sales, but California's materiality standard covers it. If you know there is asbestos in the popcorn ceilings, the floor tile mastic, the pipe insulation, or the roofing, you disclose it. If you have had it tested, you hand over the report. If you have had work done, you hand over the documentation.
The typical locations in an LA building of this era are predictable: acoustic ceiling texture, vinyl floor tile and the adhesive under it, pipe and duct insulation, roofing felts and mastics, and certain wallboard joint compounds.
Undisturbed material in good condition is generally managed in place rather than removed. The cost arrives with disturbance.
Renovation triggers survey and abatement requirements. A buyer planning a unit-turn renovation program on a 1962 building is going to encounter this on every unit, and their underwriting should include it. Sophisticated LA value-add buyers already do.
Regulatory requirements attach to the work. Air quality rules governing asbestos-related demolition and renovation, contractor licensing, notification, containment, and disposal. This is specialist work with a specialist price.
Lead safe-work-practice rules attach to renovation of pre-1978 housing. Certified firms, contained work areas, specific cleanup verification.
Worker and tenant exposure claims are the tail risk. Which is precisely why an owner should never have unlicensed labor scraping ceilings or sanding old paint in occupied units — including during the pre-sale cleanup that owners are so often tempted to do.
Modestly and predictably, for most buildings. Every bidder on a pre-1978 LA building is underwriting the same assumption, so it is baked into the market's pricing of that vintage rather than deducted from your building specifically.
It affects your price more when: you have an active or recent renovation program with undocumented practices, there is a prior complaint or claim, or the building is being bought for a heavy renovation where the abatement scope drives the budget.
It affects your price less when: you have testing reports, abatement documentation, and a clean record of using licensed contractors for anything that disturbed the material.
Locate any prior surveys, test reports, or abatement records. Producing documentation converts an assumption into a known quantity, which is always worth something.
Prepare the lead disclosure package properly. Disclosure form, pamphlet, records, acknowledgment. It costs nothing and closes off a real liability.
Do not do unpermitted cosmetic work that disturbs suspect material. Scraping a popcorn ceiling to freshen a vacant unit before a sale is exactly the wrong move — it creates the exposure the material did not previously present.
Be accurate rather than reassuring. "No known asbestos" when you had a unit remediated four years ago is the kind of statement that produces a post-close claim.
Assume both materials are present in any pre-1978 LA building, disclose what you actually know, complete the federal lead disclosure package properly, and hand over every report and record you have. Leave undisturbed material undisturbed, and do not let pre-sale cosmetic work create an exposure that did not exist. Buyers of older LA stock have priced this for decades — what they punish is not the asbestos, it is the missing paperwork.
Do I have to test for asbestos before selling?
No. There is no testing requirement to sell. You disclose what you know. Testing is worth considering if you expect to sell to a heavy-renovation buyer and want the scope known rather than estimated conservatively.
Does the buyer inherit the liability?
Ownership of the condition passes with the building, but that does not release a seller who concealed something they knew. Accurate disclosure is what actually transfers the risk.
Can I renovate units before selling to get better rents?
Be careful in a pre-1978 building. Renovation that disturbs asbestos-containing material or lead paint carries specific legal requirements, and doing it informally creates exposure that will outlive the sale. If units are being turned before a sale, use properly licensed contractors and keep the documentation.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
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