Water torture: where there's water damage, there's mold. (Spotlight).(liability and prevention)

For shell-shocked property owners, managers and insurance professionals, the bad news about mold is liability and legislation concerns have yet to hit bottom--and the culprit is water damage.

The latest salvo comes from celebrity Ed McMahon, suing a subsidiary of Traveler's Property Casualty Corporation for $20 million, claiming an improperly repaired leak covered by the company lead to the mold stachybotrys chartarun spreading through his Beverly Hills mansion, making he and his wife seriously ill and killing their dog. He joins a long line of plaintiffs, including Erin Brockovich, who have sued for toxic mold damages since Texas homeowner Melinda Ballard won a $32 million suit against Farmers Insurance in 2000.

In Texas alone, water-related mold claims have exploded to 5,722 in Q2 2001 from 883 in Q1 2000 with losses reaching $276.5 million for the period, according to the Texas Insurance Department, which tabulated data for Allstate, Stare Farm and Farmers Insurance. On the legislative front, Representative John Conyers (D-MI) plans to introduce the Toxic Mold Safety and Protection Act, which would call on the Environmental Protection Agency (EPA) to issue guidelines defining threshold limits for mold. This comes on the heels of California's recently enacted Toxic Mold Protection Act, which directs stare health officials to set limits for homes, schools, businesses and public buildings--and requires landlords to disclose when the mold limits are exceeded.

New York State Assemblyman Scott Stringer said he is planning to draft legislation to require anyone leasing or selling a residence in New York to disclose any mold history. A similar bill is now making its way through Congress.

By now, it's abundantly clear to property professionals that mold is the worst thing to hit the industry since asbestos. What needs clarification-before it's too late--is the insidious role water damage plays in mold growth.

Water Damage a Risky Business

"Simply put, any structure with water leaks, water damage or a history of such is at risk of developing mold," said John Regan, chairman and CEO of PDG Environmental, a national environmental remediation company. "The fact is, mold can develop anywhere there is a food source, sufficient temperature and water. These conditions are typically met in any structure with a history of water damage."

"Mold spores float everywhere in the environment and feed on common building materials such as drywall, carpet, insulation and ceiling tile when wet," he said. "Mold thrives at room temperature between 65 and 85 degrees Fahrenheit and can survive a much wider range. Add a water source to the mix for as little as 24 to 48 hours and you could have mold."

Regan suggests changes in building design from the 1970s onward have heightened today's mold problems since the drive toward energy efficiency had the unintended effect of sealing off indoor airflow so moisture doesn't evaporate once introduced. Also, building materials are now more cellulose-based with higher paper content on which mold thrives.

Common Sources of Unwanted Moisture

The National Park Service is responsible for preserving and maintaining historic buildings in its possession for long-term public use. Against this mission, water damage is a hazard to be combated. According to the National Park Service's Preservation Brief #39 regarding controlling moisture in buildings, the five most common sources of unwanted moisture are:

* Above grade exterior moisture entering the building (rain or melted snow)

* Below grade moisture entering the building (commonly through a high water table)

* Leaking plumbing pipes and mechanical equipment

* Interior moisture from facility use and climate control systems (vapor condensation)

* Water used in maintenance and construction materials (cleaning, washing, material mixing)

Regan agrees monitoring common sources of unwanted building moisture can go a long way in preventing mold growth but said, "It's equally key to prevent excess building moisture and to thoroughly dry it within 24 hours when it occurs.

"From our experience, mold growth doesn't stem from just a few types of water problems. You've got to be vigilant in avoiding every source of excess moisture, from burst pipes and flooding to pinhole leaks and vapor condensation over time, if you want to avoid triggering mold growth. Ironically, smaller water sources such as a pinhole leak may actually be more insidious than larger, more obvious ones such as a burst pipe since they may go unnoticed and unremediated for longer periods of time."

Two Roads to Mold

Mold forms on wood with at least 16 percent moisture content, and wood itself begins to decay at 20 percent moisture content. Along these lines, Regan said building design flaws account for a sizable number of mold cases because too much moisture accumulates. For example, in residential properties, poorly designed shower/dryer vents blowing water vapor into improperly vented attics are a common cause of mold.

Landscaping design errors in both residential and commercial properties can contribute to mold growth as well. For example, at one facility the lawn extended to bay windows, which were subsequently damaged by lawn mowing. When the facility owner replaced the grass under the windows with flowers to prevent further lawn mower damage, he graded over the bottom of the window's stucco, allowing water to enter through cracks when it rained or snowed. This provided a water source, allowing mold growth in the wall cavities between the drywall and studs.

Another avenue of mold growth is construction flaws, Regan said. At one high-rise condominium, improperly installed fire sprinklers dripped onto ceiling panels made of cellulose-based drywall. Mold grew our of sight until someone connected the water stains on the ceiling with the increased health concerns. Hidden mold growth was again the culprit.

"Lack of mold awareness has been part of the problem," Regan said. "When building materials such as studs are left in unprotected storage, they can become wet or mold-contaminated even at new construction or remodeling projects. It may be a shock to find mold contamination in a brand new home or building but it can happen especially with porous, cellulose-based materials in humid or rainy climates. If growth occurs out of sight-in walls, attics, basements or near AC systems-damage can be substantial before the mold problem is identified."

Managing Mold

Any structure with water leaks, water damage, or a history of such is at risk of developing mold. High humidity increases the risk, and a musty odor or drywall discoloration after water damage repair are telltale signs of mold growth. Of course, sudden tenant respiratory problems or complaints of ill health may also be a tip mold is present and must be remediated.

According to the EPA, there are a number of questions to consider before remediating a mold problem:

* Are there existing moisture problems in the building?

* Have building materials been wet more than 48 hours?

* Are there hidden sources of water, or is the humidity too high (high enough to cause condensation)?

* Are building occupants reporting musty or moldy odors?

* Are building occupants reporting health problems?

* Are building materials or furnishings visibly damaged?

* Has maintenance been delayed or the maintenance plan altered?

* Has the building been recently remodeled or has building use changed?

* Is consultation with medical or health professionals indicated?

"Once a property has visible mold growth, it's too late to simply dry and repair water damage," Regan said. "Without adequate precautions, maintenance staff could open up a wall and expose themselves and the building occupants to unknown types and quantities of hidden mold. That could release mold spores into the air and ventilation systems, spreading mold growth throughout the building."

"Even professional drying firms that rely on fans and venting can make the same mistake if they approach a job without proper mold awareness, he said. "A job of just a few days could easily balloon into one requiring months of remediation without proper area isolation, engineering controls and work practices, which would likely increase the chances of litigation."

Rita Kirby, CPM[R] a consultant with Flower Mound, TX-based The Resource Company, said it is wise for real estate companies to take the precaution of addressing mold in formal policies.

"One of the hot ticket items were seeing property management companies add to their manuals is a procedure on mold and how to report it," Kirby said. "Many of them are also including a lease addendum addressing residents' responsibility in reporting mold, housekeeping procedures and ways to prevent mold from occurring."

Kirby said such measures could have a major impact on the prevention of the problem. "Managers who are trained to add mold to their preventive maintenance list and look for signs of mold in the property can help prevent it from turning into a big problem," she said.

"Mold is a problem the nation's insurers and property professionals are just beginning to address, and understanding the link between water damage and toxic mold is a crucial part of the process," Regan said. "Proactive design, sound construction and preventative maintenance along with a timely handling of water damage will all be part of the front-end solution, just as certified mold remediation will continue to be part of the solution on the back-end."

Mold Resources

Centers for Disease Control

www.cdc.gov/nceh/airpollution/mold

Environmental Protection Agency