Real Estate    

Southwest Florida’s rainy season has brought a storm that’s causing more than just typical water damage in homes and commercial buildings. It’s a squall of concern about something much more threatening than water intrusion from leaky windows or roofs. The culprit is mold.

Mold is a fungus with many species, and is older than humankind. It commonly grows outside, and typically is not dangerous outside homes or commercial buildings. Mold becomes much more ominous when it spreads to the inside of buildings. It could potentially pose serious health risks.

Recent national media coverage and increasing numbers of mold-related insurance claims have sparked serious alarm within the real estate industry.

Property insurers are even more nervous. Insurance giant Allstate, for example, recently announced the company would no longer write homeowners insurance policies for secondary residences in Florida due to an increased number of claims for mold damage. This publicly visible reaction is catching the attention of and raising unease among the general public.

“Until about six months ago, the only mold testing we were doing was for insurance companies before and after water damage cleanups. Now we are getting many calls from buyers, sellers and Realtors for homes and commercial buildings,” says Doug Wall of Radon Services Inc. based in Bonita Springs. Wall performs radon tests and indoor air quality tests for mold.

People have a natural tolerance to mold, but high levels of mold growth inside a home or commercial building can cause serious health problems. Mold tends to grow undetected in wall spaces, under carpets, inside air-conditioning ducts and where water damage has occurred.

Condensation pans under refrigerators also can be a significant source of mold. Closed air circulation systems used in some new commercial buildings may spread mold growth quickly once mold enters the system.

Mold most commonly causes allergic reactions in humans. But they also can be toxic, especially to babies and the elderly with weak immune systems.

“There are thousands of species of mold but only a handful are dangerous to our health,” Wall says.

Mold health risks and liability issues are serious concerns for the real estate industry. In fact, the National Association of Realtors has organized the Mold Working Group to evaluate available information on mold.

The group also is recommending steps that the NAR can take to address mold issues, and finding solutions that would prevent mold from becoming an obstacle to successful real estate transactions.

Someday mold tests may be as common in real estate transactions as appraisals and termite inspections.

news-press.com

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Fungus grows among us

If you live or work in Florida, you have mold. Molds grow anywhere there are moisture and oxygen, so in our moist state, the slimy, furry-looking fungus is all around you.

And it's at the center of a controversy between some homeowners, who say insurance should cover mold damage, and some insurers, who say preventing mold damage is part of a homeowner's maintenance responsibility.

Mold spores can enter a building through open doorways, windows or ventilation systems. Spores also can hitch a ride on human clothing or pet fur, according to a Web site run by the federal Centers for Disease Control and Prevention.

And when those spores meet excessive moisture, they will reproduce faster than rabbits.

Most of the time, mold or mildew -- two names for the same group of fungi -- are harmless and easily controlled. But left unchecked, mold colonies can be extremely damaging to your pocketbook.

"It's a big issue," said Robert Maglievaz, an indoor air quality specialist with the Florida Department of Health in DeLand. "Fifty-four percent of my calls for the last year (137 out of 254 calls in Volusia County) were because of mold."

Mold is in every building to some degree, Maglievaz said, so it's important to get rid of it before it causes problems.

"The problem is when mold gets out of control," he said. "The primary cause is moisture getting into a home -- either a roof leak or a plumbing leak -- and it doesn't get addressed in a timely manner."

Minor patches of mold can be cleaned off with soapy water, Maglievaz said. But allowed to run rampant, mold can eat away wooden studs, ceiling tiles or sheets of drywall.

"If the structural integrity has been violated, the damaged materials have to be replaced," he said. "I don't think the threat for loss is overblown."

The common black mold found in many bathrooms and kitchens is not known to cause health problems, said Tom Dykes, president of Accucheck Inc., a DeBary home-inspection company.

"Stachybotrys is the one everyone is panicky about, and it has toxic side effects," Dykes said.

Homeowners and property managers in Florida are taking mold problems very seriously, and complain their insurance companies are not.

Steve Roddenberry, a deputy director at the state Department of Insurance, has been chairing public forums around Florida to hear both sides state their cases. He said his impression is that consumers need to be better informed about what is covered in their policies, and need to better understand the damage water can cause.

"The sense I got is that many didn't appreciate where their responsibility begins and ends," Roddenberry said. "That it is addressable, and education would have helped."

Insurers, on the other hand, haven't set premiums at levels that cover the losses they're incurring from mold claims, he said.

"They say their liability has to be reduced, or they're going to have to charge more," Roddenberry said. "We (the department) are going to have to find that point where everybody will be treated equitably."

His boss, Insurance Commissioner Tom Gallagher, said the question is what rates can be charged to provide coverage while remaining reasonable.

"It comes down to allowing choices," Gallagher said during a break in the Orlando forum last month. "Can consumers get more options for getting in or out?"

Currently, insurers in the state are responsible only for mold that's caused by specific accidents, such as an exploding hot-water heater.

In Orlando, Vince Rio said State Farm Insurance Co. does pay for mold damage. "We will and do pay the costs of mold remediation in cases where the damage was a covered loss," Rio said. "People whose claims were handled properly aren't here (at the forum)."

He suggested letting those who want coverage for mold damage make that decision for themselves instead of putting the cost on the backs of all policyholders.

"Florida consumers cannot afford to pay for mold as a mandatory part of their property insurance," Rio said. "I suggest letting the market work, and let consumers choose (to add mold coverage)."

Sam Miller, vice president of the Florida Insurance Council in Tallahassee, said the group's members feel the mold litigation issue "threatens the affordability and availability of homeowner and commercial property insurance."

"The vast majority of mold' cases have never been covered by insurance, but rather are maintenance issues that are best dealt with by homeowners, not insurers," Miller said in a release presented in Orlando.

Homes and commercial properties can lose value even if mold damage has been repaired, because of the public perception about the potential hazards, some experts say.

"It's not really a stigma. It's that property owners don't want to be labeled with sick-building syndrome," said Marlene Linders, president and chief executive of Philders Group International in Winter Park. Her company mitigates indoor air quality problems, many of which are mold-related.

"Mold is becoming more of a problem," said Linders, who's also a registered nurse. "Being proactive will help keep it under control, but it will never go away."

Linders said litigation and huge settlements in the past few years have led to more awareness among property managers about the hazards posed by mold.

"Mold and mildew are an after-effect of water intrusion," she said. "If landlords or property managers don't correct it properly, it can lead to further problems."

And possibly, to lawsuits. Some law firms, such as Orlando-based Holland & Knight, have set up departments that specialize in mold litigation. Linders said many commercial building owners no longer feel that preventing mold problems is too costly.

"That's just penny-wise and dollar foolish," she said.

Homeowners also are worried about trying to sell a house that has had mold damage. No law requires they disclose that fact to a potential buyer, but some Realtors do it anyway. Bill Mancinik, broker and owner of Bill Mancinik/The Home Team realty in DeLand, said he feels "morally and ethically duty-bound to disclose" any mold problems.

"As a broker, we would disclose anything we know about and let the buyer make an informed decision," he said. "But there's no legal requirement to do so."

Mancinik has tried in vain to find standard disclosure forms from both the state and national Realtor associations, although there are similar forms for radon and other potential problems.

"We're going to have to deal with mold down the line, but I'd much rather have a clear-cut disclosure form to use," he said

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