March 23, 2003, Sunday
REAL ESTATE DESK
Turmoil Over Mold in Buildings
DENNIS HEVESI (NYT) 2873 words
is a slimy, sticky, black, brownish or sometimes orangey
organism that mostly comes in knobby, though sometimes
hairy, microscopic ovals -- half a million or more spores
fitting on the face of a dime.
Mold, in some of its myriad forms, has long been known
to cause serious damage to some people's pulmonary systems.
But over the last five years, for a mix of reasons,
the literally creepy substance has also exerted increasing
strains on the real estate industry, the insurance industry,
the court system and architectural and construction
Yet, given that fungus (its more scientific appellation)
has inhabited the planet for millions of years, there
are those caught up in the current concern who contend
that, however legitimate in some cases, that worry has
also been exaggerated.
The confusion stems, in part, from the fact that while
some people can suffer serious health damage from exposure
to mold, others are unaffected.
Some of the agitation was stirred by a federal agency's
initial opinion, later reversed, that mold might have
caused bleeding in the lungs of infants. Also in the
mix has been litigious piling on after sizable damage
awards in several court cases, including one, later
scaled back, for $32 million; the insurance industry's
hasty retreat from mold coverage; and insufficient understanding
of the medical consequences of mold exposure.
''Five years ago, we would get one call a month about
mold: a residence, a school, a commercial property,''
said Robert Krell, president of IAQ Technologies, an
indoor environmental consulting and remediation company
in Syracuse, N.Y. ''Now we get 10 calls a day.''
''I've seen people become deathly ill,'' Mr. Krell said.
''I've also seen them make themselves ill with hysteria.''
Daniel Sitomer, a partner in the environmental law firm
of Sitomer & Hogan in Manhattan, calls for calm on the
legal front, where about 10,000 mold-related lawsuits
have been filed nationwide in the last three years.
''What we've found where the knee-jerk response was
to overreact and litigate,'' Mr. Sitomer said, ''is
that those who have commenced those suits have directly
impacted the value of their own home.''
Mr. Sitomer's firm represents both plaintiffs and defendants
in mold-related cases, but specializes in preparing
building managers and co-op and condominium boards to
deal with the mold problem. ''There's time to commence
litigation after there's been a unified effort by the
building and the residents to manage the mold,'' he
said. ''Once that's implemented, there's time to address
responsibility and the development of claims.''
About 24,000 homeowners across the nation -- including
1,600 in New York, New Jersey and Connecticut -- had
mold-related insurance claims unresolved as of Dec.
31, according to a Texas-based homeowners advocacy group
called Policyholders of America.
Last year, according to Robert P. Hartwig, the chief
economist for the Insurance Information Institute, insurance
companies paid out $2.5 billion in mold-related claims.
''That's about double what it was in 2001,'' Mr. Hartwig
''In addition, in 2002 it became clear that the mold
issue was no longer confined to homeowners' insurance,''
Mr. Hartwig continued, ''but became a problem in commercial
coverage as well -- particularly for co-ops, condominiums,
hotels and schools.'' Because they are corporations,
co-ops and condominiums must carry commercial liability
The insurance industry has not taken kindly to the explosion
in mold-related claims. At the industry's urging, 35
states -- including New Jersey, but not New York or
Connecticut -- have allowed insurers to exclude mold
coverage from homeowner policies. ''In some states,''
Mr. Hartwig said, ''insurers have introduced caps on
the coverage for this type of claim, perhaps $5,000
All of which squeezes homeowners and building owners.
In Texas -- which along with California leads the nation
in mold claims, at just under 5,000 each (followed by
Florida with 3,900) -- the per-policy cost of industry
payouts for mold coverage rose from $23 in the first
quarter of 2000 to $444 by the end of 2001, Mr. Hartwig
said. ''These costs are passed on to policyholders,''
Rental buildings have also been affected, with some
landlords informing renters that they could be held
responsible for not removing visible moisture or not
reporting the appearance of mold to management.
With coverage limited and insurance companies fiercely
contesting court claims, some owners of private homes
are facing frightening choices -- especially those with
widespread contamination deep within their walls, plumbing,
heating and ventilation systems. In those cases, remediation
can cost hundreds of thousands of dollars.
''One issue we are seeing more and more of these days
is foreclosures,'' said Melinda Ballard, president of
Policyholders of America. Ms. Ballard started her organization
after winning the nation's most publicized mold-related
lawsuit against an insurer, resulting in a damage award
of $32 million -- later reduced to $4 million.
''Let's say you have a family in a home with severe
contamination and it's not covered by insurance,'' Ms.
Ballard said. ''They face ugly choices. They can stay
and have their children suffer the health consequences.
They can put their home up for sale and not disclose
anything. Or they can hand the keys to the bank.''
Starting in midyear 2002, Ms. Ballard said, her organization
began receiving about 50 calls a week from people facing
foreclosure because of mold exposure. ''Here's the rub,''
she said, ''when the bank forecloses, they sell it at
auction -- as-is.''
High-Tech Conditions May Promote Mold
Modern architecture and construction techniques, particularly
for high-rise buildings, are also affected by mold concerns.
Pointing out that there are spores in the air everywhere,
Mr. Sitomer, the environmental lawyer, said, ''In today's
sealed buildings, tightly controlled environments, central
air-conditioning, mold grows at much higher levels than
To which New York State Senator Carl L. Marcellino,
a Republican from Long Island and chairman of the Senate
Environmental Conservation Committee, said, ''Maybe
you don't seal new buildings; let them breathe.''
Senator Marcellino is the sponsor of a bill that would
create a commission of scientists, lawyers, insurers,
architects and builders to advise government officials
on mold policy.
Worries about mold, he said, are as much a problem in
the suburbs as in urban high-rises. ''That leaky roof
dripping behind your Sheetrock becomes a nesting place,''
he said. ''You fix the roof, but nobody looks behind
A Range of Fungi, A Range of Effects
Several experts said widespread mold anxiety got its
start in the mid-90's after 10 babies in neighboring
buildings in Cleveland suffered severe bleeding in the
lungs, including one who died. Investigators from the
federal Centers for Disease Control and Prevention joined
independent scientists in concluding that ''infant pulmonary
hemorrhage may be caused by exposure to Stachybotrys
chartarum or other fungi growing in moist household
environments.'' Stachybotrys has since been seized upon
by some lawyers as ''killer mold.''
In 1997, a C.D.C. task force reviewed the initial findings
and concluded that the evidence ''was not of sufficient
quality to support an association'' between Stachybotrys
and bleeding lungs in infants.
Which hardly means that mold is harmless. ''We know
that there are a range of health effects related to
mold exposure,'' said Dr. Maida P. Galvez, a pediatrician
at the Pediatric Environmental Health Specialty Unit
at Mount Sinai Medical Center in Manhattan. ''The most
common are asthma and allergy-type symptoms.''
''We know that families with strong histories of allergic
diseases are more susceptible to these exposures,''
Dr. Galvez said, ''that mold can exacerbate these conditions.''
At a minimum, mold can cause eye, ear, nose and throat
irritation, as well as coughing and wheezing -- sometimes
severe and unrelenting.
While mold exacerbates those conditions for people prone
to allergies and asthma, Dr. Galvez said, it has not
yet been proved to be a direct instigator of asthma
in families without a history of that disease. ''There
are ongoing studies to determine that relationship,''
Still, mold can be deadly. Dr. Jordan Fink, a professor
in the allergy and immunology division of the Medical
College of Wisconsin, Milwaukee, said mold can cause
hypersensitivity pneumonitis, resulting in progressive
lung impairment. ''There have been fatal cases of hypersensitivity
pneumonitis,'' he said, ''because of the inflammation
and scarring of pulmonary tissue.''
Pointing out that there are ''hundreds to thousands''
of mold species that have not been studied, Dr. Fink
focused on the notorious Stachybotrys variety. While
it is proved that Stachybotrys causes pulmonary and
allergic symptoms, he said, ''there is no documentation
as yet that Stachybotrys can cause nonallergic-type
symptoms.'' As examples, he said, some people say they
suffer memory loss, ''can't think anymore, can't eat.''
Ms. Ballard, president of the policyholders group, said
that she, her husband and 2-year-old son lived for months
in their contaminated 22-room home in a suburb of Austin,
Tex. -- ''called, appropriately enough, Dripping Springs,''
she said -- after being told by their insurance company
that the contractors hired to remediate Stachybotrys
in their home could not break through the walls and
floors until the insurance investigation was completed.
''I stupidly, not knowing jack about toxic mold, listened
to them and stopped all scheduled repairs,'' she said.
That was in 1998.
''We started getting sick,'' Ms. Ballard said. ''My
son would gasp for every breath. My husband had some
strange symptoms. He became extremely forgetful. He
had driven the same car for years and could not remember
what kind of car it was. He had brain seizures that
showed up on M.R.I.'s.''
The old ''fixer upper'' had cost $300,000, Ms. Ballard
said, and about $1 million to modernize. The $32 million
in damages was awarded in 2001, but was later reduced
to $4 million, plus interest and lawyers' fees.
In December, a mold suit was filed by the owner of a
condominium apartment at 515 Park Avenue -- advertised
by its sponsors, at $3,000 per square foot, as the world's
most expensive residential building.
The suit alleges that the developer, architect, contractors
and condominium board members had all been negligent
in the design, construction and management of the building,
which opened in 2000, resulting in ''massive leaks''
throughout the structure.
''As recent studies performed for the building's board
of managers confirmed,'' the suit says, ''the building
is contaminated with toxic fungus molds, including a
strain known as Stachybotrys, the 'killer fungus.' ''
The plaintiff, Richard Kramer, claimed that the apartment
and its contents, including antiques and artwork, were
totally ruined. ''Such damage pales,'' the suit says,
in comparison with the harm to the plaintiff's 3-year-old
daughter, ''who has developed severe and disabling respiratory
and other illnesses.''
Mr. Kramer is asking for $2 billion in damages. Lawyers
for the developers, Zeckendorf Realty, did not respond
to several requests for comment.
According to the American Academy of Allergy, Asthma
and Immunology, 35 million Americans suffer from reactions
to mold -- 12 percent of the nation's population.
''Do we design buildings to take care of the person
who is allergic or the person who is not?'' wonders
Angelo Garcia III, the principal industrial hygienist
at Future Environment Designs, a consultation and remediation
company on Long Island. ''Do you build for one in eight
Senator Marcellino believes, ''It will come to setting
regulatory standards that force people to take the effects
of mold into consideration when they create buildings,
Process Starts By Eliminating Leaks
Until then, what is a homeowner or building owner to
do? In a phrase: stop leaks.
Mold thrives on moisture. And, as Mr. Garcia emphasized,
remediation requires elimination of the source. ''Whatever
caused water damage must be fixed,'' he said. ''Realistically,
that should be done before the cleaning, because the
mold will come back.'' Better yet, leaks should be eliminated
before mold ever takes root.
If mold does become visible -- a big if, given that
it also thrives in a building's dark recesses -- a cleanup
is in order.
The Old Testament, while genteelly referring to mold
as mildew, offers a harsh prescription. Speaking of
''the priest,'' Leviticus 14, says: ''If mildew has
spread on the walls, he is to order that the contaminated
stones be torn out.'' If mildew reappears, it says,
''the house must be torn down.''
Mr. Krell stressed, however, that ''not every time somebody
has a few square feet of mold do they have to burn the
house down or default on their mortgage. Most people
can wear gloves, a surgical mask and safety goggles
and perform a limited cleanup themselves.''
If a homeowner prefers the reassurance of hiring a professional
for a small cleanup, Mr. Krell said, the least expensive
job would cost about $800. Still, he said: ''We've been
involved in projects in excess of $300,000. There was
a massive job in Alpine, N.J., involving faulty construction
on a 20,000-square-foot mansion. There were 8,000 square
feet of mold throughout the basement. Eventually, they
forced the builder to buy the house back, for $5 million.''
But if mold has only crept halfway up a wall, for instance,
and the owner wants to personally perform the cleanup,
then strong detergent or bleach, water and a lot of
elbow grease are in order. ''Scrub the area until nothing
is visible,'' Mr. Garcia said. ''You only do this on
nonporous surfaces -- wood, metal, plaster.'' Fabrics,
books and even wallboard are porous and, if contaminated,
might have to be disposed of.
Big jobs are, obviously, more complicated. ''If, let's
say, it gets into the ventilation system,'' Mr. Garcia
said, ''you've got to clean throughout the house. Then
the job becomes similar to asbestos removal -- sealing
the windows, high-efficiency filters to clean the air,
vacuums with filters, all surfaces cleaned.''
If the job is done correctly -- another big if -- the
workers will wear respirators, protective suits, gloves.
''They will build a chamber next to or in the house
to decontaminate themselves, so they don't bring out
the contaminants,'' Mr. Garcia said. All removed materials
will be sealed in plastic bags for disposal. Pretesting
will be necessary to establish parameters for the project,
Mr. Krell said, and to set reference points for air
and surface testing after the job is done.
In 1995, Mr. Garcia said, his company remediated an
entire two-bedroom apartment in Manhattan for $7,000.
Asked if prices have gone up since, he said that, in
fact, ''as more contractors get into this, prices come
And that is part of the problem.
As Mr. Krell said: ''Almost every water and fire restoration
contractor, every lead and asbestos abatement contractor
in the country is jumping into this field. And many
are ill-prepared.'' There are no state or federal regulations
for mold consultants and contractors.
The federal Environmental Protection Agency and the
New York City Department of Health have written remediation
guidelines. And there are two organizations -- the American
Indoor Air Quality Council, (800) 942-0832, www.iaqcouncil.org;
and the Indoor Air Quality Association, (301) 231-8388,
www.iaqa.org) -- that offer lists of contractors who
have completed voluntary certification requirements.
But Mr. Krell believes those requirements are not stringent
So, in choosing a contractor, the watchword is ''references,
references, references,'' he said. ''Ask for a list
of previous clients they have done similar work for.''
It is also crucial, Mr. Krell said, to make sure that
the consultant and contractor have specific mold coverage
in their insurance policies, in case, for example, ''they
spread contamination throughout the rest of the building
through poor work practices.''
Extrapolating those precautions to the biggest residential
buildings, Mr. Sitomer, the Manhattan environmental
lawyer, said that, on that scale, ''managing mold has
to be a partnership between building owners and residents,
allowing for a free flow of information that reduces
Reiterating his position that apartment owners should
not overreact, Mr. Sitomer said: ''With litigation comes
public disclosure of the issues as the plaintiff sees
them. That not only can have an adverse effect on apartment
values, it can also complicate the board's attempt to
manage the problem.''
A cornerstone of a building's partnership is that residents,
board members and management fully understand the extent
of insurance coverage for mold -- from the apartment
owners' policies to the board members' directors and
officers insurance to the entire building's liability
Building staff should be trained to respond quickly
and appropriately -- sealing mold in plastic sheeting,
informing management and calling in a contractor --
so problems are not increased by mishandling of mold.
And buildings should prescreen consultants and contractors
-- and their insurance coverage -- allowing for rapid
response. ''If building staff first has to find qualified
contractors,'' Mr. Sitomer said, ''the spores have time
2002 The New York Times Company