Water leak test
Photo credit: Greg Trotter

MOLD GROWTH

Mold occurs naturally. It often grows on materials in commercial buildings like insulation, wallpaper, drywall, roofs, and anywhere else that moisture and oxygen are present. According to environmental lawyers, studies show that mold causes respiratory problems for building occupants. There is not a federal cleanup standard for mold and very few states and municipalities address this issue. Removing mold is also expensive, since the source and the damaged building materials need removal in order to mitigate mold regrowth. Damages often include costly repairs, relocation expenses, property depreciation, and loss of use and income during renovations. Then there is the possibility of distressing personal injury claims.

LEGAL ISSUES

Real estate attorneys recommend that landlords and tenants include provisions during lease negotiations. Addressing who is responsible is imperative. Is it the tenant or the landlord responsible for air conditioning, heating, and ventilation problems? This is important because related heating, air and ventilation issues often contribute to mold growth and the increase in remediation costs.

PROPERTY CONDITION ASSESSMENT (PCA)

Commercial buildings need careful inspection. Since mold assessments do not fall within the scope of ASTM Phase I Environmental Site Assessments, (mold is not considered a “hazardous substance”) separate mold assessments must be conducted. An experienced commercial building consultant performing a Property Condition Assessment may note any evidence of water intrusion or mold growth while conducting a walk-through site inspection. The Property Condition Report is the first red-flag.

WATER INTRUSION TESTING

If mold is suspected the commercial building inspector will report it or at least note any possible sources of potential water intrusion. Then a qualified consultant can perform a separate mold assessment. Often, (more than 85% of the time), the commercial building inspectors with one Central Florida commercial real estate consulting group, Commercial Building Consultants, LLC, discover evidence of water intrusion in many buildings they inspect throughout the southeast. Where there is moisture there is the risk for mold growth. A good Property Condition Assessment will give a prospective buyer enough information to decide to further investigate for mold growth. A warehouse in Arkansas was leaking and the property management team was unable to determine the source of the water intrusion. Testing can be ordered to determine the source of a leak, before moisture and mold growth drastically damage building materials. Here is an example of one testing procedure:  http://www.commercialbuildingconsultants.com/project/arkansas-warehouse-forensic-inspection/

INSURANCE & PREVENTION

When mold is discovered, insurance may not cover remediation since mold coverage usually isn’t included without a rider to most standard policies. Obtaining mold coverage requires planning and preparation approved by the prospective insurer, outlining methods for the prevention of mold growth. The insurer may deny coverage of claims if the insured fails to comply with procedures stipulated in the approved plan. Coverage also depends on other factors, including but not limited to issues of humidity, measures taken when mold was first discovered, and underlying causes for the mold growth. Seeking environmental law advice and insurance coverage to include mold growth is best when purchasing a commercial building, whether mold is discovered or not during the due diligence process.

For more general information about Property Condition Assessments, Property Condition Reports, and Phase I Environmental Site Assessments, please visit: www.commercialbuildingconsultants.com.