Mold News
Mold Problem Spreading
Written by The Wall Street Journal Friday, 03 January 2003 00:00
Mold has become a huge legal and financial problem for homeowners and insurers, not to mention a significant health concern. Now it is turning into a big headache at commercial properties - from apartments to hotels to shopping centers.
Mold is even affecting big real-estate transactions. Last summer, a buyer at the last minute abandoned a $30 million deal to purchase a 250-unit apartment complex in the Southwest because it had mold, according to Jones Lang LaSalle Inc., a Chicago real-estate services firm that represented the apartments' owner.
Real-estate attorneys say mold inspections are increasingly becoming part of the industry's due-diligence process before taking on a transaction. The fungal growth, found in damp or wet conditions, has been blamed for a number of health problems, including breathing difficulties, headaches, nausea, gastrointestinal ailments, skin rashes, severe allergic reactions and neurological damage.
Mold-related expenses cost companies that underwrite homeowners' insurance $1.3 billion in 2001, a number that is expected to grow this year, says the Insurance Information Institute, a New York-based trade group. Some insurers have even started excluding mold from their property-damage policies as well, says the Insurance Information Institute.
Some advice about mold for buyers and tenants of commercial real estate, offered at a recent mold symposium in New York:
- Add mold to due-diligence checklist.
- Watch for clues on property tours such as leaks, wet spots, condensation and stains or musty odors.
- Ask property managers, engineers and occupants about mold.
- Obtain copies of all existing indoor air quality and mold reports.
- Consider performing a mold survey if warning signs exist.
- Review property and casualty insurance, watch for mold and environmental exclusions.
