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By: Raymond Daniel Burke
Ober|Kaler
When mold was discovered in part of the Hilton Hawaiian Village
in Honolulu, it ultimately resulted in the closing for more than
a year of an entire 453-room 25-story tower. It is reported that
Hilton spent some $20 Million on consulting and investigation
costs, and an additional $35 Million in the remediation. This is
one notable example among many of how the presence and growth of
mold in homes and commercial buildings has developed into a
serious issue that has potentially far-reaching consequences for
residential and commercial property owners and managers, as well
as for the construction and insurance industries.
Several states have established task forces to study mold and
its effect on buildings and indoor air quality. However, the
intelligent dialogue required for the development of proper
standards for mold exposure and remediation has, in large part,
been drowned out by extreme voices. On the one hand are those
who summarily dismiss the issue as the fabricated product of a
conspiracy between tort lawyers and a developing cottage
industry of mold remediation consultants. On the other are those
readily prepared to broadly attribute a wide variety of medical
conditions to the unhealthy environment of “sick buildings.”
While it is true that mold is an ancient life form that has,
throughout history, been the constant companion of humanity, its
recent prominence as an indoor health issue is explained by two
features of modern building techniques – the use of materials
containing high concentrations of cellulose and other fibers
upon which molds feed, and the employment of insulating
materials and methods that restrict ventilation. Given the
inviting food source provided by present day building material,
all that is required for vigorous mold growth and amplification
is the presence of water and a building assembly that prevents
the moisture from escaping or drying out.
One need not establish any causal connection between the
presence of mold and health issues in order to recognize the
need for proper mold removal. Indeed, putting health matters
entirely aside, molds deteriorate the building materials on
which they feed, necessitating the repair of affected
components. Where structural elements are involved, this can
become a matter of building stability as well as function.
Additionally, because of the manner in which they digest
materials, molds give off undesirable odors and diminish
aesthetic appearance, thereby degrading the indoor environment
and decreasing property values.
While the precise health consequences of indoor mold exposure
remain the subject of study and debate, particularly as to the
effect of its production of mycotoxins, it is undisputed that
molds are recognized allergens and reproduce by means of
airborne spores. A portion of the population will have some
allergic response to certain molds. This may manifest itself as
rhinitis, sinusitis or asthma, and highly sensitive individuals,
and those with pre-existing respiratory problems, may develop
more serious symptoms. Additionally, persons with severely
compromised immune systems may be a risk for fungal infections
form some pathogenic molds.
Buildings do not have mold problems unless they have water
problems. Accordingly, building exterior envelopes and plumbing
and mechanical systems need to be designed, constructed and
maintained in a manner that protects vulnerable components form
moisture. Moreover, once water intrusion results in mold growth,
the water source must be eliminated and methodologies need to be
in place for mold removal.
In the absence of statutory regulation, various industry
guidelines have been developed that have been used to govern the
scope of mold remediation projects, including the Environmental
Protection Agency’s Guideline on Mold Remediation in Schools and
Commercial Buildings. In general, it is recognized that hard and
non-porous surfaces can usually be cleaned, while absorbent or
porous materials, such as wallboard, carpet, and ceilings may
require replacement.
Historically, insurance claims for mold were permitted under
property damage insurance policies where the infestation arose
from the intrusion of rain water as a result of storms, or the
discharge of water, steam, or condensation from plumbing or
mechanical systems. However, as mold related claims have
increased, insurers throughout the country have sought to
exclude mold from property damage coverage. In mid-2003, the
Maryland Insurance Commissioner reversed a ruling by his
predecessor, and made mold exclusions permissible. Where mold
exclusions are applicable, coverage is only available through
the purchase of separate policies or endorsements.
The deterioration of building components, the diminishment of
indoor environmental quality and aesthetics, and the potential
for allergic reactions and other health consequences provide
reason enough to adopt policies that promote the elimination of
sources of indoor mold and provide a protocol for the removal of
mold growth.
Rather than allow extremists to define the debate, the more
reasoned approach is to adopt standards that ensure watertight
buildings, identify unacceptable levels of mold contamination,
and establish reasonable remediation criteria that allow its
removal while minimizing the spread of the airborne spores. To
do otherwise merely perpetuates the current uncertainties and
hyperbole, while the costs to property owners continue to
accumulate.
Until such standards are in place, property owners need to be
mindful of the potential for harm to their investment from water
intrusion and mold. As such, it should be part of any due
diligence checklist. Where problems occur, competent
professionals should be engaged to properly identify the source
of the moisture and develop specifications for an effective
repair, as well as to determine the need for and appropriate
scope of any mold remediation program.
Raymond Daniel Burke
(410) 347-7392
rdburke@ober.com
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