I just renewed my insurance policy on my home, and I was not surprised to discover that damage caused by mold and water intrusion has been excluded from my coverage. You may have received the same notice from your insurance company as well. You may have also read or heard about a flurry of lawsuits and people actually burning their homes to rid them of mold. So what is this thing called mold and why does it matter?
Webster’s defines mold as “a growth of minute fungi. . . commonly as a downy or fury coating, and associated with decay or dampness.” Random House Webster’s College Dictionary, “mold2,” Random House, New York, (1998), page 845. The Northwest’s “liquid sunshine” causes mold to thrive and prosper. Whether you are a landlord, owner, purchaser, or lessee, it is important to not overlook mold when entering into an agreement.
Mold begins as tiny invisible spores that float in the air. Mold can begin to grow indoors when the spores land on wet surfaces. It cannot grow unless there is moisture present.
Some people believe a property is immune from such problems because it is a new or relatively new structure. Don’t let yourself be caught in this trap. Many new commercial buildings and residences have been affected by mold as many are built during the winter months, or certain lumber that is not properly dried.
So why are these little spores such a big deal? Well, mold can cause serious health risks to both residents and workers who live and work inside of mold infested structures. Molds can cause allergic reactions among some sensitive people and in some cases create toxic substances. Symptoms of mold include anything from mild cold-like symptoms, red eyes, and skin rashes, to respiratory distress, headaches, flu like symptoms and vertigo. Mold can also trigger asthma attacks in those who suffer from the ailment.
Clean up is relatively simple if the mold is caught before it becomes widespread. Detergent, rubber gloves and a good scrub brush is usually all that is required to clean a contained contaminated area. However, if the source of the moisture is not remedied, mold will quickly return. If the area is larger in scale or if it has spread through the ventilation system, a professional contractor with experience in the area should be consulted.
When a worker or resident suffers from mold exposure, who is liable? What sort of treatment should be undertaken to remedy the situation and who should pay for it? What happens to the lease? These are all questions that can be answered upfront in the original lease or contract.
If you are the purchaser or lessee, you may want to ask for a professional inspection that includes testing for the presence of mold. This is especially important if the building is older, smells musty, or there is visible evidence of a water leak or intrusion. If the building is new, you should inquire as to what time of the year the structure was framed and if and what precautions were taken to keep moisture out or to dry the wood.
There are a number of lawsuits that involve mold resulting from water intrusion. The majority of these suits are brought against developers, contractors and architects claiming negligence related to the construction or design of the building. It is important to determine what time of year siding was added to the structure and what sort of siding was used. There are several recent lawsuits relating to mold due to EIFS (synthetic stucco) siding because of the potential for water intrusion.
If you are the seller or lessor of a building, you must disclose to the other party if you are aware of the presence of mold. If there is mold, you should obtain a waiver from the Buyer that he or she is aware of the problem and the potential impacts. Even if you have no knowledge of any mold, you should limit the tenants or buyers remedies upfront in the contract in the event mold is later found to be growing in the structure. For example, agree upon what would be considered adequate clean up, how much of the clean up you must perform, and also limit the time frame the buyer or lessee can hold you responsible for the clean up.
A mold problem will literally continue to grow, and if not dealt with it can cause a transaction to be infested. If you are entering into a lease or a sale, or have concerns or questions about mold, feel free to call our office. We can prepare provisions to be added to your sale contract or lease to protect you against this potential hotbed of litigation.