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The Truth about Mold An Annotated 4-Hour PowerPoint presentation by Susan C. Cooper, Ph.D.

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1 The Truth about Mold An Annotated 4-Hour PowerPoint presentation by Susan C. Cooper, Ph.D.

2 Course Content 1. What Is Mold? 2. How Does Mold Reproduce, and When Does It Thrive? 3. Why Has Mold Become a Problem? 4. Adverse Effects of Mold 5. Remediation 6. What Is the Solution? 7. How the Real Estate Professional Can Reduce Liability

3 1. What Is Mold? Is it something new? Just what IS it?

4 Mold: General Stuff Mold: 4 million years old Considered harmless nuisance until now Insufficient research to answer all our questions Many diverse opinions, especially online

5 What Are Fungi? Fungi (fun’-ji, plural; singular: fungus, fun’- gus) Classified as a separate kingdom, like plants and animals (formerly considered to be plants) Over 100,000 to 1.5 million species Includes mushrooms, puffballs, yeasts, molds

6 Mold Is Everywhere! Found everywhere Essential for life on earth—nature’s garbage disposal Feeds on dead plants and animals and their wastes Essential for the growth of some plants- helps some plants take in nutrients and water

7 Benefits of Molds Food: cheeses (e.g., Roquefort, Camembert, Gorgonzola) Drugs/medicines –Penicillin discovered from a mold –One chemical from mold used to prevent rejection of organ transplants –One chemical from mold used to reduce high cholesterol Research—genetics, etc.

8 Common Household Molds Number of species not known—at least 20,000— may be as many as 100,000 or even 250,000 species of molds Only about six common household molds –Aspergillus –Penicillium (produces penicillin) –Fusarium –Alternaria –Mucor –Cladosporium

9 The Structure of Mold Simple organisms Key terms: –Mycelium: the whole body of the mold –Hyphae (hi’-fee, plural): tubular, branched strands (hypha, hi’-fa, singular)

10 2. How Does Mold Reproduce, and When Does It Thrive? Specialized methods of reproduction Specialized conditions needed for growth

11 How Does Mold Reproduce, and When Does It Thrive? Specialized methods for reproduction –No male and female molds out to have a little fun! … –So how do they reproduce? … Specialized conditions needed for growth –Mold doesn’t grow everywhere or all the time … –What does it need to grow? …

12 How Does Mold Reproduce? Asexual reproductive organs—specialized hyphae Specialized hyphae: –spores form in spore cases (sporangia) at the ends of the hyphae or –Spores form unenclosed along the sides and/or ends of the hyphae

13 Spores Very small and light Produced in large quantities –One puffball: produced 8 trillion spores! When ripe, distributed to the world at large: –Discharged to the air OR –Brushed off by critter or human and carried to new location on fur, feathers, clothing, etc. OR –Picked up by breeze (outdoors) or air currents (indoors)

14 Spores—the Critical Factor Spores: highly resistant, unlike mycelium –Mycelium: can be destroyed with detergent and water –Spores: resistant to nearly everything in dormant state; remain viable for years Start out in dormant (inactive) state Remain dormant until activated by presence of ALL conditions required for germination and growth

15 What Do Spores Need to Become Activated and Begin Growing? 1.A food source What do they eat?

16 What Do Spores Need? 1. A Food Source Spores (and mold) usually feed on organic, nonliving material. Spores of common household molds: need cellulose-containing materials

17 The Function of Digestion No living organism (animal or fungus) can use large molecules of food directly. Each animal—or fungus—produces digestive enzymes (proteins) that break down food into small molecules that can be utilized by its body.

18 The Digestive Process Animals: internal digestion— –Digestive enzymes (stomach and small intestine): break large molecules down into small ones –Small food molecules taken to rest of body via bloodstream Fungi: external digestion—an “out-of-body stomach”! –Digestive enzymes secreted through hyphae into food –Break starch (cellulose) down into sugar in the food source –Sugar taken up into mycelium through hyphae –Sugars used in mold’s body for growth and normal functions.

19 Photosynthesis in Plants Plants don’t digest food: they have a building up process Produce food from very simple molecules— –Use carbon dioxide (released by animals) and water –Produce sugars –Build sugars up into complex starch molecules—cellulose (you will hear this word again!)

20 Characteristics of Common Household Molds Feed on cellulose-containing building materials There are NOT the molds that grow in your neighbor’s refrigerator! –“Refrigerator molds”: not hidden (except in recesses of refrigerator)—not a problem –Never in large quantities –Become obvious when furry and smelly enough –Do not live on cellulose-containing building materials

21 Common Cellulose-Containing Building Materials Ceiling tile Dry wall Wallboard Wood Fiber board Wall paper Natural fibers Paper Cardboard Carpeting Paint Dust Cellulosic insulation Others?

22 Mold Can Be Part of a “Biofilm” Biofilm: a thin layer of a biological growth (e.g., mold) growing upon a thin film of cellulose- containing material that overlies something that mold cannot eat. Example: concrete block or ceramic tile with an overlying biofilm of molds growing on such thin layers of materials as: –Wallpaper –Wallpaper paste –Paint –Dust

23 What Else Do Spores Need to Germinate? 2. Moisture Moisture—the second critical component. Requirements for moisture vary with the species of mold Usually, standing water and/or a relative humidity of at least 70 percent Absolutely critical for activating spores Continuing source of moisture and presence of food? Infestation!

24 Where Molds Are Usually Found Because of Moist Conditions Damp basements and crawl spaces Bathrooms and laundry rooms Humidifiers and air conditioners Water reservoirs of humidifiers Drip pans Un-vented clothes dryers Upholstered furniture, carpeting Garbage containers Potting soil of over-watered house plants

25 Common Causes of Moisture Flooding followed by insufficient or late drying out Leaking pipes (maybe hidden) Leaking roofs Leaking windows, doors Sewage backups Toilet or tub overflows if not cleaned up quickly Condensation forming on or around a window sill or door or other areas—localized areas of high humidity, condensation Bathrooms, laundry rooms Pet urine Poor housekeeping

26 Humid Regions More at Risk Humid regions: higher relative humidity Harder to dry out after a leak Favors mold growth How minimize the problem? –Open windows, circulate air –Lets mold out and fresh air in

27 How About Dry Climates? Not as big a problem as humid climates, where the relative humidity is always high Still a problem in arid climates—all it takes is a leak where there’s a food source. Example: public library in Santa Fe, New Mexico: closed down for about 9 months, $1.2 million to remediate for mold

28 So Mold Spores Need-- FOOD MOISTURE What else do they need to germinate?

29 What Other Conditions Do Spores Need? Non-critical conditions: different molds can tolerate a wide range in these conditions Oxygen: most spores and molds need some oxygen to grow, but oxygen is nearly everywhere. Temperature: most spores and molds can grow under a wide range of temperatures but usually prefer a range of about 68-86 degrees Darkness: most spores and molds do best in dark areas

30 The Last Condition Needed for Spores to Germinate: Time Time is needed—but not much! When conditions are right, spores begin to germinate (or grow), like seeds –Most spores germinate in 4–12 hours. After they germinate, they colonize: they produce new hyphae and either conidia or sporangia with spores –Spores of most species can colonize in 24-72 hours

31 3. Why Has Mold Become a Problem? What has happened? What’s different NOW?

32 Why the Concern with Mold and “Toxic Mold”? Mold is not new! Several problems surfacing at the same time –Energy-efficient building practices … –Poor design and/or construction defects … –Changing weather patterns … –Growing public awareness through attention by the media and implications of health issues … –Well publicized court cases involving mold, some involving large amounts of money …

33 Energy-efficient Building Practices Caused by increased prices of gas and oil in 1970s Construction methods: conserve energy and prevent exchange of indoor and outdoor air –Double/triple-paned windows –Caulking –Windows that do not open at all Results: –Lack of adequate ventilation –Concentrates mold inside and keeps fresh air outside

34 Age of Home Not just older homes! New homes –Tighter construction –Poor workmanship/construction defects e.g., no flashing around windows –Wallboard instead of plaster Wallboard: plaster sandwiched between two sheets of heavy paper Wet wallboard? Molds feed on wet paper of wallboard. Plaster: not a good food source.

35 Exterior Insulation and Finish System (EIFS) “Artificial stucco” If EIFS applied before the framing members are dry, moisture trapped inside—may result in mold infestation. Controversy: manner of application defective product –Some law suits: concluded that EIFS product not at fault –Other law suits: claim defective product.

36 Concern: Home Builders and Remodelers International Builders Show, 2002: concluded that mold is the biggest challenge currently facing the residential construction industry 28% of attendees: knew of mold problem in at least one home under construction during last year 18% of attendees: knew of mold problem in at least one occupied home

37 Changing Weather Patterns Global warming from increase in greenhouse gases (carbon dioxide, methane, nitrous oxide, and fluorocarbons) Result over the last 100 years: –Average surface temperature of the earth: increased by 0.5–1.0°F –Sea level: has risen 4–8 inches –Precipitation over land: has increased by 1 percent, with increased flooding events and elevated humidity

38 Growing Public Awareness—and the Media— The media love “toxic mold”--it sells! Have flooded newspapers and magazines with stories The media nearly always mention “toxic mold,” Stachybotrys or ”black mold” although: –“Non-toxic” mold also has proven adverse health effects –There are other “toxic molds” besides Stachybotrys –“Black mold” is not a name specific for Stachybotrys

39 The Media Have Publicized: Stories about people suffering health problems allegedly caused by mold A few cases involving famous personalities Law suits and litigation, often with cases involving millions of dollars

40 Mold in Schools Many schools: evacuated and closed in a number of cities and small communities throughout the country Such a concern that the Environmental Protection Agency (EPA) has fact sheets on the topic and has made available an Indoor Air Quality Tools for Schools kit.

41 Mold in Public Buildings Many courthouses, libraries, office buildings, fire stations, etc. “Sick building syndrome”—more people become sick than usual Sometimes caused by mold Hundreds of people affected Problem: often poor ventilation Office buildings with large climate-control systems used incorrectly, especially systems designed to recirculate air to conserve on air-conditioning bills, are particularly susceptible to mold infestations

42 A “Sick” Government Building Government building in Atlanta, GA, where too many employees were getting sick (based on statistics) Environmental specialist called in from Acme Environmental in Albuquerque, NM Discovered several “red flags,” including stain on wall Mold discovered in building (behind a filing cabinet and behind a door) Source: disconnected pipe

43 Stain on Wall of Government Building l

44 Mold Found behind Filing Cabinet

45 Mold Found on the Wall behind a Door

46 Source of the Problem: a Disconnected Pipe.

47 An Example of People Living in Mold-Infested Homes Steve and Karen Porath Bought repossessed home in Foresthill, CA Did some fixing up and moved in, April 1999 Immediate health problems, whole family Son Mitchell born 2 weeks later –In 2 days, Mitchell violently ill –Vomited more than 50 times per day –Mold finally diagnosed when he was about 1 year old

48 Follow-up, Steve and Karen Porath Mold found in home; family advised to vacate home immediately and leave everything behind. Options: spend $75,000 to fight mold or have home burned down. No money left—had to have fire department burn down their home on February 14, 2001

49 Many Well-publicized Court Cases Some: directly impact real estate professionals Some: directly impact those in the homeowner’s insurance industry

50 Examples of Law Suits Impacting the Real Estate Industry The Mazza family vs. Partridge Point Apartments … The Evans family and their very first home …

51 The Mazza Family vs. the Partridge Point Apartments Mazza family: moved into Partridge Point apartments in Sacramento, CA About 6 months later: all three members became ill from mold –Repeated hospitalizations –Incurred about $125,000 in medical expenses Requested reimbursement of possessions damaged by mold and for relocation expenses

52 Follow-up to the Mazza Family Case Apartment complex said “no.” Mazza’s sued apartment complex. Tried to settle out of court. Apartment complex said “no.” Mazza family awarded $2.7 million (under appeal).

53 The Evans Family and Their Very First Home Terrell and Candrell Evans bought their very first home in Las Vegas, NV, in November 1995 In September 1997, they were forced to vacate the home because of illnesses in all members of the family. Mold found in home. Filed suit against their agent and everybody else they could find for “insufficient disclosures” City has padlocked the home.

54 Law Suits Impacting the Homeowner’s Insurance Industry Several well-publicized cases A few cases involving well-known personalities Heavy fines from court cases and increased number of claims have caused serious impact on insurance companies, especially in Texas.

55 Melinda Ballard and Her Family Melinda Ballard and husband, Ron Allison—bought multi- million dollar home near Austin, TX Leak developed, mold set in Health problems developed in Melinda, Ron, and their 4- year-old son Reece Filed suit against Farmers Insurance company for not providing money to clean up leaks soon enough Awarded $32 million by jury Court of Appeals reduced award from Farmers to about $8.5 million.

56 Major Impact on Insurance Companies Losses of lawsuits involving mold (such as Ballard case) Increased number of claims involving mold, especially in Texas –About 1,000 claims in first quarter of 2000 –Over 14,000 claims in fourth quarter of 2001 –Average claim: has risen from $500 to $15,000 per claim Result: three primary homeowners insurance companies in Texas stopped writing and renewing homeowners policies Agreement made between insurance companies and State of Texas

57 Effect of Insurance Company Problems on Real Estate Industry More difficult to obtain new homeowner’s insurance policies Especially hard for homes with claims of water damage and/or mold May kill the sale if homeowners insurance coverage is required for the sale and the cost of insurance has become prohibitively expensive Price of homeowners insurance has risen by more than 30 percent in some areas

58 4. Adverse Effects of Mold Two major types of effects of mold: Structural damage Health effects

59 Effects of Mold—Structural Damage Effects on structural materials Molds digest the cellulose in wood-based building materials Weakens and eventually can destroy building materials containing cellulose

60 Effects of Mold—Health Health effects: the major concern with mold A potential problem with virtually ALL molds Health effects from “toxic molds” more widely publicized Possible health effects from “toxic molds” not well substantiated to scientific community

61 Health Effects of Molds Unpredictable responses Responses vary with –Individual … –Exposure to mold … –Type and severity of mold infestation..

62 Variability of Responses of Individuals A function of: –Age … –Exposure and sensitivity to mold … –Physical condition … –Susceptibility to disease … Health effects of mold often caused by weakened immune system …

63 What Is the Immune System? Our primary defense system against foreign materials (antigens) invading our body Health immune system: an antigen (such as mold) stimulates white blood cells to produce antibodies. Antibodies engulf or neutralize antigens. Neutralized antigens: then discarded by the body as waste.

64 Who Has Weakened Immune Systems? Infants and small children—immune system not yet fully developed Elderly—immune systems weaken with age Sickness, recovery from surgery, AIDS, chemotherapy—immune system depressed Also, respiratory diseases, multiple allergies, asthma—depressed immune systems

65 Day-to-Day Variability of an Individual Everyone, even individuals with strong immune system, can have varying responses to molds Bad days: stress, illness, lack of sleep— more susceptible than on “good days”

66 Repeated Exposure to Mold Individual may become hypersensitive to mold from repeated exposure to an antigen such as mold Examples: farmers who work with moldy materials routinely; employees who work in a building contaminated with mold or other disease-causing materials (e.g., mold- contaminated office building)

67 Variability of Mold Molds produce different chemicals, which result in different health effects. Different chemicals are produced under different conditions.

68 Primary Health Effects Caused by Common Household Molds Irritations … Allergies … Infections …

69 What Is an Irritation? Usually a minor health effect Soreness, inflammation, redness, pain, swelling May be localized to a small area of the body, like a skin rash Most common: soreness and inflammation of eyes and respiratory system May be coughing, nasal congestion, post-nasal drip Extreme cases, highly susceptible individuals: more severe symptoms (flu-like symptoms, headaches, dizziness, decreased attention span)

70 What Causes Irritations from Molds? Molds produce volatile organic compounds (VOCs) as wastes Over 500 VOCs identified from molds Many VOCs are solvents; some are hazardous (acetone, benzene, hexane, methylene chloride) May be responsible for musty odor characteristic of mold as well as irritations.

71 Allergies and Allergic Reactions The most common reaction to mold Allergen: small amount of material (mold, pollen, etc.) that may cause allergic reaction. Repeated exposure usually necessary—sensitizes individual to allergen (mold, pollen, etc.) Cell wall of all molds contains large molecules called glucans—cause allergic-type reactions and suppress immune system

72 Allergies from Molds Most common in people with existing sensitivity to molds or other allergens –Weakened immune systems or –Sensitivity from exposure May be minor symptoms –Limited exposure or people insensitive to mold –Mild and transitory symptoms, like hay fever: runny and/or stuffy nose, wheezing, sore throat, coughing, itchy eyes

73 More Severe Allergic Reactions From sensitized people or those with asthma, multiple allergies, or other respiratory problems May cause asthma, serious allergies, fever, shortness of breath, or inflammation of the lung, which can develop into chronic lung disease; sinusitis

74 Infections from Mold Usually, common household molds act as saprophytes: feed on non-living or dead organic material. When molds cause infections, they act as parasites and feed on living organisms. Infection: invasive growth of parasite into human tissues Rare

75 Aspergillosis Infection caused by a few Aspergillus species Healthy individuals not believed to be at risk regardless of level of exposure Three types of people susceptible to aspergillosis: –Those with chronic sinus infections … –Those with immune system deficiencies... –Those with obstructive lung disease …

76 Aspergillosis and Chronic Sinus Infections Chronic sinus infections: creates lung damage, cavities in lungs Mold grows in mucus lining walls of larger airways of lungs, in cavities Mold growth—induces inflammatory and allergic changes in lung Can lead to fibrosis and loss of lung function

77 Aspergillosis and Immune System Deficiencies People with immuno-suppressed or immuno-compromised systems They inhale spores (as we all do) Their immune systems: not capable of neutralizing spores with antibodies Mold grows in lungs.

78 Aspergillosis and Obstructive Lung Disease Obstructive lung disease: causes narrowing or obstruction of airways in lung Two most common forms of obstructive lung disease: –Emphysema –Chronic bronchitis Either condition makes individual susceptible to aspergillosis Condition exacerbated by smoking

79 What about “Toxic Molds”? Most notorious of the “toxic molds”: Stachybotrys chartarum or atra. –At least 17 species of Stachybotrys known—only this one species is known to be “toxic” Stachybotrys: blackish green mold, slimy to the touch –Called “black mold,” but there are nontoxic black molds, too –Found in only about 2–5 percent of homes investigated

80 What Does Stachybotrys chartarum Need? Conditions needed: –Water-saturated food with high cellulose content –Standing water or relative humidity of at least 90 percent to germinate and grow (can continue to grow if humidity drops to 70 percent)

81 And Stachybotrys chartarum Needs Time! Needs more time to colonize than other molds. –Mucor and Rhizopus: 1–2 days –Aspergillus and Penicillium: 2–3 days –Stachybotrys chartarum: 8–12 days

82 Other “Toxic” Molds? Common household molds: –Aspergillus –Fusarium –Penicillium –Alternaria May be others, too (But media usually mean “Stachybotrys” when referring to “toxic molds.”)

83 What Makes Some Molds “Toxic”? Mycotoxins Mycotoxins (“myco” = mold, “toxin” = poison): chemicals produced by certain molds under certain specific conditions Hundreds of mycotoxins known Carried on spores and fragments of mycelia –Fat soluble: can be absorbed by: digestive system (if ingested) airways in lungs (if inhaled) skin (if touched)

84 When Are Mycotoxins Produced? Example of conditions needed by Stachybotrys to produce mycotoxins: –At least 55 percent relative humidity –Production favored by fluctuating temperatures Mycotoxin production: believed to be triggered by presence of other microorganisms (other molds and/or bacteria)—may require competition

85 Health Effects of Mycotoxins Very controversial Many of these health effects: not yet proven to the satisfaction of the scientific community Most: anecdotal and based on only one or a few cases; not backed by scientific studies Health effects depend on type of mycotoxin, so they vary.

86 Implicated in Infant Deaths Death of 9 of 36 infants in Cleveland suffering from acute pulmonary hemorrhage (bleeding from the lung) Water damage in homes from flooding; Stachybotrys implicated. Condition appears to be exacerbated by cigarette smoke.

87 Some Health Effects Alleged to Have Been Caused by “Toxic Molds” Same health effects as from non-toxic molds Coughing up chunks of blood; nose bleeds Nausea, vomiting, diarrhea Headaches, fatigue, general malaise Damage to internal organs (liver, kidney, blood, lungs)

88 More Alleged Health Effects of Toxic Molds Central nervous system damage, including short-term memory loss, tremors, attention deficit Personality changes Suppression of the immune system Cancer Bleeding in the lungs

89 Recovery from Mold-Induced Illness Mold-induced Illness: sometimes reversible. Recovery may be possible if: –if sensitive individual is removed from mold source –and if not too much damage has been done Many cases: people living in mold-infested home go on vacation and feel fine; come home and are sick again.

90 Health Problems from Mold: Why They Are Hard to Diagnose Wide range of symptoms Lack of awareness of the problem by many doctors No clinical tests available to demonstrate the presence of molds or mycotoxins (other than species-specific tests for some mold run by allergists) No “biomarkers” known for mold—chemicals in body that indicate whether a person has been exposed to a specific disease-causing organism

91 5. Remediation Does your home contain mold? What can you do if you have an infestation?

92 Does Your Home Contain Mold? Probably! Study of 160 homes in 7 cities: 100 percent contained mold. Four possible conditions for mold in a home at any time: –Low levels of mold spores; mold not visible and no problem as long as there’s no moisture problem –Small areas of mold visible and easy to detect; not a problem if cleaned up –Mold hidden (e.g., behind a wall) and a problem that can get even worse –Mold visible, easy to detect, and a definite problem

93 If You Have Mold, What Should You Do? Don’t panic! Use common sense. Find the source of the moisture first, or the mold problem will remain—and fix the leak. If it’s a small amount of mold (less than 10 square feet) and you’re not hypersensitive to it, you may be able to clean it yourself..

94 How Should I Clean Up Mold in My Home? The EPA recommends using water and detergent. Wear rubber gloves and an N-95 respirator. If the mold has penetrated porous material (like ceiling tile), replace the material. Get the EPA’s brochure, A Brief Guide to Mold, Moisture, and Your Home from http://

95 Sampling and Testing Testing—use nose and eyes to detect mold. Visible mold: do you need to test? –Probably not—you KNOW it’s there! –No health/safety standards to go by When to test: –When someone in family is—or may be—sensitive to mold (e.g., unexplained health problems) –When requested by a buyer –To determine if mold problem has been eliminated after remediation of a mold infestation

96 Test Kits Available for less than $10 online and in hardware stores Many types: depend on spores floating in air and landing on medium in sample container—but spores may not land there— –May give “false negatives” (indicate absence of mold where it actually exists) –May give “false positives” Indicate presence of mold where it doesn’t exist Need indoor and outdoor samples for comparison

97 Need to Test? Have testing done by a professional with experience in mold Can explain and interpret the laboratory results! Warning! Even a professional may not be able to detect it if it is hidden (e.g., inside walls). But a professional with experience will know where to look.

98 Porous vs. Non-Porous Materials If mold is on non-porous materials: –Wipe the mold off with detergent and water. If mold is on porous materials (e.g., ceiling tile, carpeting, wood) –Replace the contaminated material. –Mold gets into the pores and cannot be removed by cleaning

99 Will the Mold Come Back? If you clean up a mold infestation, it will probably come back if you: –Don’t remove any porous material infested with mold –Fail to stop the leak Why will it come back? –The food source is still there. –If you don’t stop the leak, the water is still there. –If you leave porous material with mold, lots of spores will remain. –You’ve probably killed the mycelium—but dormant spores remain.

100 6. What Is the Solution? There is no solution yet.

101 There Is No Solution Yet… Too much still needs to be learned about mold and its effects upon human health. Major problem: mold as a moving target because of its variable effects on people and different chemicals, etc., from different molds. Mold as “moving target”—hard to set health standards

102 Federal Organizations—Center for Disease Control (CDC) Recognizes mold’s contributions to respiratory problems (allergies and asthma) and infections in susceptible people Does not accept health effects often attributed to mycotoxins because of lack of scientific evidence and studies

103 Federal Organizations–Environmental Protection Agency (EPA) Recognizes health problems of mold in general Takes same stance on mycotoxins as CDC Has developed two documents on mold: –Brochure for consumers … Includes information about cleaning up small areas of infestation –Document on cleaning up larger infestations…

104 Efforts of National Association of R EALTORS ® (NAR) A national organization, not a federal one NAR’s Risk Management Committee: recognized the problem in spring 2001 Published several articles in its monthly magazines and on its website Established a Mold Working Group to: –evaluate the information available –develop recommendations for NAR

105 Report from NAR’s Mold Working Group Recommendations made: –Seller disclosures need to be refined. –Laws needed to lessen liability –Need to maintain E&O insurance coverage ;. –Educate real estate licensees about mold. –Need for information brochure about mold –Need to watch for water damage –Let the buyer decide!

106 Problems Recognized by NAR Working Group Mold is everywhere—and mold problems can grow quickly.. Inaccurate tests Problem with disclosures because of lack of standard and lack of determination of a “safe” level Lack of standards for a “safe” level of mold

107 Lack of Health Standards—Why? Because of the way in which health standards are determined: –Documented injuries, sickness, deaths in the work place –Studies of doses required to produce sickness, death –Neither of these exist for mold Because of the variability of responses to mold and the variability of mold itself …

108 Variability Factors No established level of mold is known to cause adverse health effects because of the: –Variability of human response to mold –Variability among different species of mold –Variability in chemicals produced by mold living under varying conditions

109 What Is Being Done at the State Level? California: Toxic Mold Protection Act –Requires setting standards if feasible –Requires disclosure of mold to buyers or renters unless the mold problem was remediated. Other states with new or pending legislation regarding mold: –Arizona, Connecticut, Georgia, Indiana, Maryland, Massachusetts, Nevada, New Jersey, New York, Pennsylvania, Texas

110 General Issues Addressed in These Bills: Requests or resolutions for research to determine health risks, standards Regulation of mold assessors and remediators Procedures for insurers to use in handling water- damage claims Requirements for insurance companies regarding mold coverage Issues related to schools

111 Legislation Proposed at the Federal Level U.S. Toxic Mold Safety and Protection Act (Melina’s Bill) Proposed to House in 2002 because 7-year- old daughter of a staff worker for Rep. John Conyers (D, Mich.) lost 70 percent of her lung function because of mold Re-submitted to the House in 2003.

112 If Melina’s Bill Is Enacted as Proposed, It Will Require: The CDC, EPA, and NIH (National Institute of Health): perform a study of health effects of mold HUD (Dept. of Housing and Urban Development): –Study and report on impact of construction standards on indoor mold growth –Promulgate regulations of mold hazards in HUD housing offered for sale or lease –Prepare procedures to minimize hazards of indoor mold, including Pamphlets about mold hazards Periodic risk assessments Mold inspections, assessments, and testing Mold abatement

113 7. How the Real Estate Professional Can Reduce Liability General Suggestions Working with the Buyer or Seller

114 Listing a Home Walk throughs … Educating your seller … What if you spot mold … Disclose … The CLUE database and homeowner’s insurance …

115 Listing a Home—Walk Throughs Look for signs of mold and/or water infiltration (or penetration) in ceilings, walls, floors, carpets Look around pipes and examine walls in bathrooms and the kitchen where pipes may be hidden Look for visible mold, especially in bathrooms Look for other red flags –Blistering paint –Wallpaper or tiles pulling away from the walls Be aware of odors: a musty smell may indicate mold.

116 Listing a Home—Educate Your Seller Discuss mold with your seller—but make sure he or she knows you’re not an expert! Give him or her: –The EPA brochure –Any fact sheets prepared by your state –Information about reliable websites, e.g., EPA, CDC, NAR

117 Listing a Home—and You Spot Mold If it’s a small patch (10 square feet or less), refer your seller to the EPA brochure –The mold can probably be cleaned with detergent and water, but let your seller decide who should clean it up. If the mold is more extensive, refer your seller to the EPA brochure and suggest using a professional to clean up the mold.

118 Finding Mold in Your Listing: If the mold is in the bathroom or kitchen, make sure there’s a functional exhaust fan and/or windows that can be opened—and recommend that the fan/windows be used after moisture has accumulated If the mold might be growing because of a leak, make sure the seller fixes the leak right away.

119 After the Seller Has Cleaned up the Mold— Check with your seller after the mold has been cleaned to make sure it hasn’t reappeared. If the mold reappears, infested porous building materials should be replaced, if they haven’t been replaced already

120 Listing a Home—Disclose, Disclose, Disclose! Discuss with your seller the importance of filling out the disclosure statement as accurately and completely as possible. –This is YOUR best protection from liability –This is YOUR SELLER’S best protection from liability.

121 Questions to Ask Your Seller Ask questions like: –Have you had any water leaks or water damage from flooding, breaking pipes, damaged ice maker lines? –Are you aware of any roof leaks? –Have you had any leaking pipes? –Have you had flooding from any of your water- using appliances? –Have you had problems with toilet/tub overflows?

122 Ask Other Questions of Your Seller Ask about any mold in the home or if any tests for mold were done. Forgotten events: may need to jog seller’s memory—ask questions Ask about water infiltration events: –Was the water leak fixed? How soon? –How extensive were water penetration events? –How quickly were they cleaned up? –Was an insurance claim filed? –Was any mold detected? Any testing done?

123 Document Your Conversations! To verify the completeness and consistency of your seller’s disclosure statement In case your seller forgets a point of conversation later

124 Read Your Seller’s Disclosure Statement! If it’s old, have it updated. Make sure it contains a reference to any problems that you’ve discussed. Ask questions to make sure that any water penetration problems are included. The disclosure statement must be as complete and accurate as possible. Have seller revise the statement if necessary

125 Comprehensive Loss Underwriting Exchange (CLUE) Database Ask if any insurance claims were filed in the last 5 years. –Any claims filed may make it difficult or very expensive for the buyer to obtain homeowner’s insurance on the home. Tell your seller about the CLUE database. Ask your seller to order a CLUE report.

126 What Is the CLUE Database? A shared industry database Contains about 90 percent of the claims filed within past 5 years Now used frequently by homeowner’s insurance companies in determining whether to accept or reject a request for insurance

127 Ordering a CLUE Report Can be ordered only by the owner of a home Order online, ($10–15) Order by phone, 1-800-456-6004 (about $8). Advantages of ordering online: receive the report within a few minutes; ordering by phone: may take several weeks

128 When Should the CLUE Report Be Ordered? Ask your seller to order the CLUE report right away. Any claims filed within the last 3–5 years: –May make it difficult, very expensive, or even impossible for the buyer to obtain homeowner’s insurance on the home –This may kill the sale.

129 Important Information about CLUE Reports and Insurance Companies The insurance company can deny an insurance up to 60 days after closing. A telephone call to a homeowner’s insurance company can show up as a claim in the CLUE database, even if a claim was not filed.

130 Working with a Buyer Walk throughs … Finding mold … CLUE reports … Homeowner’s insurance … Educating buyers … Inspections … Testing …

131 Working with a Buyer Walk throughs: do the same things you would do for a new listing—use your eyes, your nose, and your experience Educate your buyer just as you educate your seller

132 What If You Find Mold after Seller Moves Out? Check disclosure statement. If there is nothing there about water/mold problems, try to get more information from seller or seller’s agent. Has the leak been fixed? If not, suggest a different home to your buyer. Educate buyer on his/her option to have the home tested. Depending on your state rules, get an extension of the Right to Terminate the Contract while mold issues are investigated.

133 Working with a Buyer—CLUE Report Have buyer request a copy of the seller’s CLUE report early in the transaction –May make contract contingent upon receipt of a satisfactory CLUE report on the property –If CLUE report indicates claims filed, buyer may not be able to find reasonably priced insurance If buyer owns a home, have him/her order a CLUE report for himself/herself.

134 Working with a Buyer—Homeowner’s Insurance Have buyer begin looking for homeowner’s insurance early –Preferably when looking for financing –Request range of reasonable insurance estimates for price range and location of homes being considered –When writing offer: suggest including clause that the sale is subject to buyer’s ability to obtain insurance that doesn’t exceed a certain amount.

135 Consistent Treatment of Everyone Fair Housing Act: must treat everyone the same Tell everyone about mold—then, let them decide! Not legal to treat buyers with asthma or other respiratory problems any differently than anyone else

136 Inspections? Buyer may want to check (or write in) “mold inspection” if concerned Try to have buyer present during inspections so inspector can explain any problems directly to your client Ask inspector to pay particular attention to signs of water damage and/or mold or “unusual discolorations” that might be mold Ask same things of termite inspector since mold favors same conditions as do termites

137 Testing for Mold? May be needed if someone in buyer’s family has respiratory problems or if family has an infant or an elderly member May be needed if home has had a mold infestation Air testing—need outdoor and indoor samples for comparison

138 Who Should Test for Mold? Avoid test kits—not a do-it-yourself project! Hire a professional with experience in mold and good references: –Environmental engineer … –Certified Industrial Hygienist (CIH) … –Certified Residential Mold Inspector (CRMI) …

139 What Experienced Professionals Can Do with Their Instrumentation Determine amount of moisture in a ceiling or wall through probe inserted through small hole Run indoor air test to find possible contaminants, such as mold Insert small camera through little hole in wall or ceiling to look at what’s inside

140 Experienced Professionals— Understand when tests should be run and when they aren’t necessary Know what tests to run and what areas they should test Understand the need to take outdoor air samples to compare with indoor air samples Can interpret laboratory results Know when the homeowner should hire professional remediators

141 In Any Transaction, Remember— Disclose, disclose, disclose. Recommend a mold inspection and write “no” if the buyer doesn’t want one. Remediation is almost always possible except in the worst cases. Treat everyone equally. Present the information, and let the buyer decide.

142 Protecting Yourself as an Agent— Educate all buyers and sellers about mold Remember—even if mold is detected, remediation is usually possible. Be able to recommend good, reliable local specialists for testing and cleanup. Look for evidence of water damage in the home, and ask inspectors to look for water damage. Include disclosure statements and information about water damage and mold with standard documents.

143 What a Home Inspector Needs to Know— Watch for signs of water damage –Water stains, negative drainage, dampness, other signs of water penetration –Include in report; photographs if possible Consider learning how to perform limited screen tests for mold –Contact the IESO for training to EISO standards –Cost-effective screening tests to help determine whether a high level of mold is present indoors; can use with inspections Recognize conditions conducive to mold growth –Negative drainage; leaking foundations or roofs; damp/wet basements, crawl spaces, attics; leaky plumbing; improper flashing allowing water to trickle inside walls; improperly installed synthetic stucco; hail damage

144 What an Appraiser Needs to Know: Appraiser: at risk in much the same way as is the home inspector— –Personally inspect each property; take photographs; include statement that you’re not an expert on mold Include waiver that an appraiser inspects only visible and accessible areas since mold may occupy areas that appraiser cannot see Several claims made against appraisers in mold- related lawsuits

145 More Suggestions for Appraisers How mold affects property values: –Very few reports currently available –Each appraiser should research his/her market for homes with mold that sold

146 What a Home Builder or Remodeler Needs to Know Mold problems: may arise from using faulty construction materials –Watch for moldy materials, and discard them –After a rainstorm, allow building materials to dry out before enclosing the building –Building “green homes” with bales of straw: let the bales to dry thoroughly before installing them in home

147 Disclosure is the Key! Key to protecting yourself as much as possible: disclosure, disclosure, disclosure Greatest liability to real estate professional: usually result from failure to report a condition or fact that is known or suspected and then disclaiming knowledge of the information Exception: if you actually contributed to the mold problem in some way

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