The Mold Threat: Real or Imagined?
H. Michael Keller
Mold-related litigation around the nation has heightened concern over potential liability and risks of adverse health effects and damage to property from mold contamination in the buildings and homes we occupy. How real is the threat and what can be done about it?
Since the late 1990's, cases seeking compensation for property damage and personal injury claims have been numerous and alarming. In a well-publicized Texas case a few years ago, a jury awarded a homeowner a verdict of over $32 million for actual home repair damages and punitive damages against her insurance company for mishandling a mold contamination claim. The damage award was reduced to $4 million on appeal.
Although the number of cases filed nation-wide has not reached the epidemic proportions once projected and medical science has not confirmed that airborne mold can be toxic to humans, claims continue to be filed and occasionally, significant verdicts are rendered. In 2009, a jury awarded a Virginia couple $4.75 million in personal injury damages against the builder of their new home, who had allegedly constructed the home with wet lumber. The couple claimed they suffered health problems, including migraines, breathing problems and memory loss from mold that had developed as a result of faulty construction. The same year, an Arizona jury rendered a verdict of $3.3 million against a landlord in favor of a former tenant who claimed both physical and cognitive injuries from her exposure to mold in the apartment building. In Hawaii, a new 400-room hotel was shut down for mold remediation costing over $50 million. Lawsuits by hotel guests and workers against the hotel owner, and by the hotel against its contractors, ensued. Dramatic examples of other lawsuits include newspaper employees in California suing a building owner for $10 million for illnesses from mold; a condo association in California suing developers, contractors, and property managers for construction defects that spawned toxic mold, causing property damage and alleged injuries; a hotel manager in Ohio suing the hotel's owners for adverse health effects following a mold remediation in the hotel; and students, parents, and teachers in Illinois bringing a class action seeking $67 million from a school district for mold-related injuries due to negligent remediation of flood damage.
While Utah has experienced mold-related claims, they are far less frequent than in some other states, and they typically focus on property damage rather than personal injury. For example, in a recently filed lawsuit in Salt Lake City, the buyers of an existing residential home are suing the sellers and the sellers' real estate agent for failure to disclose the presence of mold and past water damage. The buyers seek property damages of at least $30,000 to be proved at trial, and punitive damages of twice that amount.
Is Mold Harmful?
Mold can cause severe property damage and may pose health risks. While it is generally accepted that mold can cause certain adverse health reactions in sensitive individuals-, e.g., nasal stuffiness, eye irritation, wheezing, fever, or shortness of breath-there is no scientific agreement on whether airborne mold can be toxic to humans or responsible for serious and permanent adverse health effects, such as pulmonary hemorrhaging in infants and chronic neurological damage.
Mold is everywhere in the air and on surfaces. Mold reproduces via tiny airborne spores and readily grows in the presence of moisture, food, and optimal temperatures (68° - 86º F). Excessive humidity, water leaks, condensation, water infiltration, or flooding can quickly spawn the growth of mold on commonly used building materials that contain a high cellulose content, such as fiberboard, gypsum board, and wallpaper.
According to the federal Centers for Disease Control and Prevention (CDC), the term "toxic mold" is not accurate, because molds themselves are not toxic or poisonous, although some molds are known to be "toxigenic," which means they can produce toxins (known as mycotoxins) under certain conditions. The CDC references a 2004 report of the Institute of Medicine (IOM) that confirms sufficient evidence to link indoor exposure to mold with upper respiratory tract symptoms, cough, and wheezing in otherwise healthy people; asthma symptoms in people with asthma; and hypersensitivity pneumonitis in individuals susceptible to that immune-mediated condition. The IOM also found limited or suggestive evidence linking indoor mold exposure to respiratory illness in otherwise healthy children.
The CDC points out, however, that there are very few reports linking toxigenic molds inside homes to unique or rare health conditions, such as pulmonary hemorrhage or memory loss. The reports of such cases are rare, and a causal link between the presence of the toxigenic mold and these conditions has not been conclusively proven. However, as evidenced by the jury verdicts, some courts have allowed plaintiffs to present expert testimony on the adverse health effects of mold.
The common health concerns from molds include hay fever-like allergic symptoms. Certain individuals with chronic respiratory disease (chronic obstructive pulmonary disorder, asthma) may experience difficulty breathing. Individuals with immune suppression may be at increased risk for infection from molds. People with allergies may be more sensitive to molds. People with immune suppression or underlying lung disease are more susceptible to fungal infections.
If you or your family members have these conditions, a qualified medical clinician should be consulted for diagnosis and treatment. Routine measures, like removing or reducing sources of moisture in the home, can prevent mold growth.
Who Can be Liable?
Mold-related claims may be pursued against insurers for coverage, and against almost anyone else linked to a possible cause of the mold infestation, a misrepresentation, or a failure to disclose its presence. Claims have been asserted against architects, building contractors, HVAC designers, homeowners associations, building owners, property managers, landlords, land developers, real estate agents/companies, and employers.
Are There Regulatory Standards?
There are no regulatory standards in Utah or most other states for determining safe levels of airborne mold or mold spores in buildings and residences. California and a few other states have made efforts toward establishing regulatory programs, but the peculiar nature of mold as a commonly-occurring, living organism makes it difficult to establish regulatory standards governing acceptable levels.
Are There Industry or Professional Standards?
The American Industrial Hygiene Association (AIHA) 2008 publication entitled "Recognition, Evaluation and Control of Indoor Mold" (more familiarly known as the "Green Book" because of its cover) has become what many refer to as the "gold standard" of mold information in the United States. The Green Book discusses the underlying principles and background of mold evaluation and control, the practice of identifying and evaluating mold damage, the evaluation of samples that are collected, the remediation process, and mold prevention and control.
Also instructive are the WHO Guidelines for Indoor Air Quality: Dampness and Mold, published in 2009 by the World Health Organization.
Should You do a Mold Inspection?
Prospective buyers, lenders, and commercial tenants should carefully consider expanding their environmental property assessments to include a mold inspection.
An inspection should always be considered if there is visual evidence of water damage or some other indication of mold. Even in the absence of visible water damage, unseen mold contamination may exist: water damage from leaking pipes, water heaters, or fire suppression sprinklers may have been repaired and cosmetically concealed while mold continues to grow unseen behind the walls.
Employ a competent professional, preferably a trained industrial hygienist, to investigate potential mold contamination. Most environmental consultants are not qualified to investigate indoor air pollutants in general or mold in particular. Carefully inquire into the consultant's credentials, training and experience, and specifically ask how the investigation will be performed and any testing interpreted.
Mold inspectors look for water damage and any detectable mold or moldy odors. Significant infestations of mold can usually be seen or smelled; experienced eyes and ears are the best detectors. Air sampling may be conducted, but due to the natural pervasiveness of mold in the outdoor environment, sampling data can only provide a relative assessment of whether the nature and concentration of mold constituents in an indoor environment may be elevated or unusual compared to outdoor environment under current conditions. A qualified mold investigator can advise whether air sampling may be prudent and cost-effective under the circumstances. The procedure involves taking air samples both inside and outside the structure to determine whether the types and concentrations of mold inside are similar to those outside. Costs vary according to the size of the structure, number of floors, and number of samples taken and analyzed. Typical cost might range from $800-$1,000 for a two story home, with two air samples on each floor and two air samples outdoors.
How do You Fix the Problem?
Remediation of mold and mold damage can be expensive and should only be undertaken by a competent and experienced contractor. Remediation includes fixing any water or moisture infiltration and removing the mold and mold-contaminated materials. Professional judgment of a qualified mold inspector is required to determine whether the cleanup is sufficient. Visible mold, mold-damaged materials, and moldy odors should no longer be present. Post-remediation air sampling can provide evidence that the kinds and concentrations of mold and mold spores found inside the building after remediation are similar to those found outside. But given the pervasiveness and variability of mold in the environment, air sampling can never conclusively establish that all mold and mold constituents have been removed.
Are You Covered by Insurance?
Probably not. The insurance industry is extremely concerned with its exposure for mold claims and has moved aggressively to limit or exclude potential coverage. Endorsements issued on renewal typically exclude any costs or damages to persons or property resulting directly or indirectly from mold. Mold coverage may be obtained through specially negotiated riders or environmental or pollution policies, but remember to consult your insurance expert, because there are no "standard" environmental insurance policies.
What Duty of Disclosure do Sellers and their Agents have?
In Utah, sellers of real property owe a duty to disclose to potential buyers material, known defects that cannot be discovered by a reasonable inspection by an ordinary prudent buyer. Although real estate professionals do not have a duty to conduct independent inspections of property, they also have a duty to disclose to prospective buyers known material defects in the property. As a general rule, a defect would be considered material if it would influence the buyer's decision to buy the property in some way (for example, they may decide not to buy, or ask for concessions such as repairing the damage or a price adjustment). Depending on the circumstances, known water damage, leaks and the presence of mold could well be considered material defects that must be disclosed to buyers.
Conclusion
Mold contamination is a real threat that can adversely impact the market value of your home or business, potentially cause health problems, and give rise to significant liability. Prompt and effective action should be taken to fix and clean up water damage and residual mold contamination to prevent a growing infestation.
The information contained in this article is intended to provide general information for review and consideration. The contents do not constitute legal advice and should not be relied on as such. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel. H. Michael Keller, the author of this article, Chairs the Environmental and Natural Resources Practice Group at Van Cott, Bagley, Cornwall & McCarthy, P.C - he can be reached at 801.237.0287 or online at mkeller@vancott.com
Since the late 1990's, cases seeking compensation for property damage and personal injury claims have been numerous and alarming. In a well-publicized Texas case a few years ago, a jury awarded a homeowner a verdict of over $32 million for actual home repair damages and punitive damages against her insurance company for mishandling a mold contamination claim. The damage award was reduced to $4 million on appeal.
Although the number of cases filed nation-wide has not reached the epidemic proportions once projected and medical science has not confirmed that airborne mold can be toxic to humans, claims continue to be filed and occasionally, significant verdicts are rendered. In 2009, a jury awarded a Virginia couple $4.75 million in personal injury damages against the builder of their new home, who had allegedly constructed the home with wet lumber. The couple claimed they suffered health problems, including migraines, breathing problems and memory loss from mold that had developed as a result of faulty construction. The same year, an Arizona jury rendered a verdict of $3.3 million against a landlord in favor of a former tenant who claimed both physical and cognitive injuries from her exposure to mold in the apartment building. In Hawaii, a new 400-room hotel was shut down for mold remediation costing over $50 million. Lawsuits by hotel guests and workers against the hotel owner, and by the hotel against its contractors, ensued. Dramatic examples of other lawsuits include newspaper employees in California suing a building owner for $10 million for illnesses from mold; a condo association in California suing developers, contractors, and property managers for construction defects that spawned toxic mold, causing property damage and alleged injuries; a hotel manager in Ohio suing the hotel's owners for adverse health effects following a mold remediation in the hotel; and students, parents, and teachers in Illinois bringing a class action seeking $67 million from a school district for mold-related injuries due to negligent remediation of flood damage.
While Utah has experienced mold-related claims, they are far less frequent than in some other states, and they typically focus on property damage rather than personal injury. For example, in a recently filed lawsuit in Salt Lake City, the buyers of an existing residential home are suing the sellers and the sellers' real estate agent for failure to disclose the presence of mold and past water damage. The buyers seek property damages of at least $30,000 to be proved at trial, and punitive damages of twice that amount.
Is Mold Harmful?
Mold can cause severe property damage and may pose health risks. While it is generally accepted that mold can cause certain adverse health reactions in sensitive individuals-, e.g., nasal stuffiness, eye irritation, wheezing, fever, or shortness of breath-there is no scientific agreement on whether airborne mold can be toxic to humans or responsible for serious and permanent adverse health effects, such as pulmonary hemorrhaging in infants and chronic neurological damage.
Mold is everywhere in the air and on surfaces. Mold reproduces via tiny airborne spores and readily grows in the presence of moisture, food, and optimal temperatures (68° - 86º F). Excessive humidity, water leaks, condensation, water infiltration, or flooding can quickly spawn the growth of mold on commonly used building materials that contain a high cellulose content, such as fiberboard, gypsum board, and wallpaper.
According to the federal Centers for Disease Control and Prevention (CDC), the term "toxic mold" is not accurate, because molds themselves are not toxic or poisonous, although some molds are known to be "toxigenic," which means they can produce toxins (known as mycotoxins) under certain conditions. The CDC references a 2004 report of the Institute of Medicine (IOM) that confirms sufficient evidence to link indoor exposure to mold with upper respiratory tract symptoms, cough, and wheezing in otherwise healthy people; asthma symptoms in people with asthma; and hypersensitivity pneumonitis in individuals susceptible to that immune-mediated condition. The IOM also found limited or suggestive evidence linking indoor mold exposure to respiratory illness in otherwise healthy children.
The CDC points out, however, that there are very few reports linking toxigenic molds inside homes to unique or rare health conditions, such as pulmonary hemorrhage or memory loss. The reports of such cases are rare, and a causal link between the presence of the toxigenic mold and these conditions has not been conclusively proven. However, as evidenced by the jury verdicts, some courts have allowed plaintiffs to present expert testimony on the adverse health effects of mold.
The common health concerns from molds include hay fever-like allergic symptoms. Certain individuals with chronic respiratory disease (chronic obstructive pulmonary disorder, asthma) may experience difficulty breathing. Individuals with immune suppression may be at increased risk for infection from molds. People with allergies may be more sensitive to molds. People with immune suppression or underlying lung disease are more susceptible to fungal infections.
If you or your family members have these conditions, a qualified medical clinician should be consulted for diagnosis and treatment. Routine measures, like removing or reducing sources of moisture in the home, can prevent mold growth.
Who Can be Liable?
Mold-related claims may be pursued against insurers for coverage, and against almost anyone else linked to a possible cause of the mold infestation, a misrepresentation, or a failure to disclose its presence. Claims have been asserted against architects, building contractors, HVAC designers, homeowners associations, building owners, property managers, landlords, land developers, real estate agents/companies, and employers.
Are There Regulatory Standards?
There are no regulatory standards in Utah or most other states for determining safe levels of airborne mold or mold spores in buildings and residences. California and a few other states have made efforts toward establishing regulatory programs, but the peculiar nature of mold as a commonly-occurring, living organism makes it difficult to establish regulatory standards governing acceptable levels.
Are There Industry or Professional Standards?
The American Industrial Hygiene Association (AIHA) 2008 publication entitled "Recognition, Evaluation and Control of Indoor Mold" (more familiarly known as the "Green Book" because of its cover) has become what many refer to as the "gold standard" of mold information in the United States. The Green Book discusses the underlying principles and background of mold evaluation and control, the practice of identifying and evaluating mold damage, the evaluation of samples that are collected, the remediation process, and mold prevention and control.
Also instructive are the WHO Guidelines for Indoor Air Quality: Dampness and Mold, published in 2009 by the World Health Organization.
Should You do a Mold Inspection?
Prospective buyers, lenders, and commercial tenants should carefully consider expanding their environmental property assessments to include a mold inspection.
An inspection should always be considered if there is visual evidence of water damage or some other indication of mold. Even in the absence of visible water damage, unseen mold contamination may exist: water damage from leaking pipes, water heaters, or fire suppression sprinklers may have been repaired and cosmetically concealed while mold continues to grow unseen behind the walls.
Employ a competent professional, preferably a trained industrial hygienist, to investigate potential mold contamination. Most environmental consultants are not qualified to investigate indoor air pollutants in general or mold in particular. Carefully inquire into the consultant's credentials, training and experience, and specifically ask how the investigation will be performed and any testing interpreted.
Mold inspectors look for water damage and any detectable mold or moldy odors. Significant infestations of mold can usually be seen or smelled; experienced eyes and ears are the best detectors. Air sampling may be conducted, but due to the natural pervasiveness of mold in the outdoor environment, sampling data can only provide a relative assessment of whether the nature and concentration of mold constituents in an indoor environment may be elevated or unusual compared to outdoor environment under current conditions. A qualified mold investigator can advise whether air sampling may be prudent and cost-effective under the circumstances. The procedure involves taking air samples both inside and outside the structure to determine whether the types and concentrations of mold inside are similar to those outside. Costs vary according to the size of the structure, number of floors, and number of samples taken and analyzed. Typical cost might range from $800-$1,000 for a two story home, with two air samples on each floor and two air samples outdoors.
How do You Fix the Problem?
Remediation of mold and mold damage can be expensive and should only be undertaken by a competent and experienced contractor. Remediation includes fixing any water or moisture infiltration and removing the mold and mold-contaminated materials. Professional judgment of a qualified mold inspector is required to determine whether the cleanup is sufficient. Visible mold, mold-damaged materials, and moldy odors should no longer be present. Post-remediation air sampling can provide evidence that the kinds and concentrations of mold and mold spores found inside the building after remediation are similar to those found outside. But given the pervasiveness and variability of mold in the environment, air sampling can never conclusively establish that all mold and mold constituents have been removed.
Are You Covered by Insurance?
Probably not. The insurance industry is extremely concerned with its exposure for mold claims and has moved aggressively to limit or exclude potential coverage. Endorsements issued on renewal typically exclude any costs or damages to persons or property resulting directly or indirectly from mold. Mold coverage may be obtained through specially negotiated riders or environmental or pollution policies, but remember to consult your insurance expert, because there are no "standard" environmental insurance policies.
What Duty of Disclosure do Sellers and their Agents have?
In Utah, sellers of real property owe a duty to disclose to potential buyers material, known defects that cannot be discovered by a reasonable inspection by an ordinary prudent buyer. Although real estate professionals do not have a duty to conduct independent inspections of property, they also have a duty to disclose to prospective buyers known material defects in the property. As a general rule, a defect would be considered material if it would influence the buyer's decision to buy the property in some way (for example, they may decide not to buy, or ask for concessions such as repairing the damage or a price adjustment). Depending on the circumstances, known water damage, leaks and the presence of mold could well be considered material defects that must be disclosed to buyers.
Conclusion
Mold contamination is a real threat that can adversely impact the market value of your home or business, potentially cause health problems, and give rise to significant liability. Prompt and effective action should be taken to fix and clean up water damage and residual mold contamination to prevent a growing infestation.
The information contained in this article is intended to provide general information for review and consideration. The contents do not constitute legal advice and should not be relied on as such. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel. H. Michael Keller, the author of this article, Chairs the Environmental and Natural Resources Practice Group at Van Cott, Bagley, Cornwall & McCarthy, P.C - he can be reached at 801.237.0287 or online at mkeller@vancott.com