Magazine article Journal of Property Management

More on Spores

Magazine article Journal of Property Management

More on Spores

Article excerpt

Now that Ed McMahon settled for $7.2 million for his allegations his dog had been exposed to mold and died as a result, mold is back on the map as the contaminant du jour. Mold's staying power as a potential liability means property managers must devote more resources and attention to address the advent of mold and sources of water intrusion. Although a dose of common sense goes a long way, the advent of legislation and the likelihood of litigation makes recourse to expert consultants and attorneys an increasingly necessaty evil. Avoiding liability by taking steps to prevent water intrusion and the growth of mold has become an imperative.

Blossoming Regulation

While lawsuits relating to mold were unheard of two years ago, tens of thousands of mold cases against landlords, developers and insurance companies have already been recorded. As a result, insurance carriers are running scared. Standard general liability and property insurance policies now exclude mold. Even environmental insurance carriers, whose very existence sprang out of filling the gaps created by general liability policies, have dipped only a toe into the cold waters of mold coverage.

The California Toxic Mold Protection Act brings mold within the jurisdiction of a state environmental agency, gives the agency broad enforcement powers and tasks the agency with promulgating new regulations to address the mold threat, including a review of the acceptable level of mold in buildings.

Most provisions in this law have not yet gone into effect, due to the need to establish exposure standards. Until the agency has concluded its work on this point, the combination of the scant regulation of mold and the lack of standards for acceptable levels of mold, render the area a potential minefield for landlords and developers. Furthermore, once the regulations are issued, landlords and developers will face new disclosure requirements and additional burdens relating to mold.

To date, California is the only state to have passed such legislation, but other states have been quick to follow its lead. Florida has a bill to study "toxic mold contamination", and to undertake a "plan of action ... to eliminate such hazards from structures in Florida . . . ."

Georgia created a Senate Toxic Mold Study Committee, as will Rhode Island. Indiana will create an 11-member task force to develop recommendations for mold exposure limits. Pennsylvania will also assemble a task force to investigate the health effects of toxic mold.

Massachusetts has just filed a bill relating to "toxic mold health protection." Illinois and Michigan both have bills pending that are nearly identical to California's law. Virginias mold bill relates to exposures in the workplace. Texas has a bill that would require a contractor to accept return of a home if the homebuyer can show a defect caused "unacceptable levels of toxic mold contamination."

One of New York's bills would require the disclosure of indoor mold history on the sale of real property and creates a form to do so. A second bill would establish standards similar to those in the California law, but exempts "any structures that were affected by or any operations resulting from the September 11 attacks."

Is Insurance Available?

A few years ago, commercial general liability and property policies covered mold liabilities. …

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