Mold Growth Can Dampen Your Day
November 22, 2004
New Hampshire: Court allows tenant to withhold rent for mold contamination
California: Apartment residents settle mold claims for $3.5 million
Kansas: Realtor sued for failure to disclose in mold case
These headlines are just a sampling of some recent new reports about mold. Mold litigation and claims have exploded over the last five years. Insurers are specifically excluding mold from all types of insurance policies, lawyers are advertising to solicit mold claims against building owners, and large verdicts and settlements have fueled the feeding frenzy over mold. Target defendants have been sellers, building owners, developers, landlords, constructors, real estate agents, inspectors and just about everyone in the construction and transaction chain of real estate. All this hoopla exists despite the lack of medical evidence that links mold to serious medical problems.
While everyone agrees that mold has always existed, whether or not mold or mildew can cause illness has always been a subject of great debate. Some translations of the Bible have a passage in which God tells Moses and Aaron how to decontaminate a house in which mold or mildew has appeared, while other translations interchange mildew with skin disease or leprosy. Some have even alleged that the famous curse of King Tut’s Tomb was really a release of mold spores, resulting in the sudden deaths among the archaeologists who were present at the opening of the tomb. However, the recent Institute of Medicine survey of health effects of mold (May 2004), found insufficient scientific evidence to link mold to serious health issues but did find a link between mold and allergies and allergy related asthma.
One of the hallmarks of the contemporary business world is that uncertainty, lack of standards and the absence of empirical, scientific evidence are no impediment to litigation. In the case of mold, there are no scientific and/or regulatory standards regarding safe levels of exposure to mold in indoor environments. If no one can say what is or is not a safe or unsafe level of mold, how can anyone say that a person’s illness was or was not caused by a exposure to a particular kind of mold?
Molds and mildew are everywhere – indoors and out. Molds survive and propagate in humid, damp conditions, from the average bathroom to air conditioning and duct work. Molds live in the soil, on plants and on dead or decaying matter, and on indoor organic material such as dust, wood, ceiling tiles, gypsum board and fabrics. Molds, unlike plants, lack chlorophyll and must survive by digesting plant materials, using plant and other organic materials for food.
Molds produce tiny spores to reproduce, just as some plants produce seeds. When mold spores land on a damp spot, they may begin growing and digesting whatever they are growing on in order to survive. Three things are needed for this process: (1) a food source; (2) a temperature range of 40º to 100º Fahrenheit; and (3) water. The microscopic spores are spread by air movement, people and animals. It is physically impossible for a building to be free of these spores. The focus has to be on prevention. The key to that prevention is the control of water, both liquid water and water vapor, in the form of high humidity.
Moisture can enter a building through: outside air infiltration, water diffusing through the building envelope, moisture in construction materials, leaks into the building and water damage from burst pipes, fire extinguishment and roof leaks. Of these, the most complicated to control are the humidity problems which arise from the intrusion of humid outside air diffusing through the building envelope.
The bottom line is that mold will not grow without water either in the form of liquid or high humidity. If you stop the water, you will stop the mold growth. If you do find mold, you have found a water problem. First and foremost, prevention of water intrusion should be a key part of building design and construction. Selection of building materials, HVAC unit sizing and control, the relationship and interface between building penetrations (doors and windows particularly) and the building envelope, flashing, grading, irrigation and landscaping are all important. During construction or renovation, every effort should be made to keep materials and the building dry. Maintenance is also a key ingredient in mold prevention. Routine cleaning can reduce the risk of mold growth, but other aspects of the building must also be regularly maintained. The HVAC system should be regularly checked and kept clean. Caulking around windows, doors and all other building envelope penetrations should be regularly inspected and repaired. Exterior painting should be maintained and cracks repaired immediately to maintain the integrity of the building envelope.
Since mold begins to grow within 24 to 48 hours after exposure to a water source, it is critical to find and fix the source of that water before trying to remediate any mold, otherwise the mold will simply return. There are some guidelines for remediation, such as those provided by the Environmental Protection Agency and the New York City Department of Health. It is important that owners have procedures in place to effectively manage this process.
The building owner, buyer, lender and real estate professional are on their own as to whether a property is “contaminated” or “safe.” There are no government standards or legal requirements for what is safe or not. However, there are ways to try to protect yourself. Sellers and real estate professional representing sellers should provide disclosure documents that specifically discuss mold and water intrusion. The seller may have a duty to disclose material conditions effecting the property. Is mold a material condition? Mold in shower grout probably isn’t a material condition but at what point does mold contamination become “material?” There is no case law on this point. Sellers may also want to provide basic mold information sheets to potential buyers informing them about mold, its causes, mold and water intrusion prevention, and maintenance. More and more sellers are incorporating damage waivers or indemnity language in their contracts. These provisions have not been sufficiently litigated to determine their enforceability. At the very least, sellers are informing buyers about the risk of mold and of the advisability of having a mold inspection performed.
Real estate buyers, lenders and real estate professionals representing buyers should be educated about mold, its risks and prevention. They should carefully study the property, disclosure forms and conduct an inspection by a qualified indoor air quality inspector as part of the due diligence process. More and more insurers are excluding mold coverage and are refusing to provide coverage for properties with a history of mold or water problems. Insurers maintain a database of water intrusion and mold claims. It may be wise for the buyer to check with their insurer during the investigation of the property.
While there are no perfect solutions to the problem of mold, careful
inspection and maintenance of existing properties, good design and
construction of new properties, renovation and expansion of existing
properties, and a careful insurance review can make this a manageable
problem. Thorough due diligence by buyers and full disclosure by the sellers
will reduce the chances that the sale today doesn’t result in a mold lawsuit
tomorrow.
For more information, e-mail Gregory J. Johansen at
gregory.johansen@hklaw.com or call toll free, 1-888-688-8500.