Mold In The Media: Hype vs. Reality
Even though molds have been in existence
for thousands of years, only recently have they been in the spotlight.
This is largely attributable to the media, which has generated a
significant amount of hype among homeowners and the real estate
community.
The New York Times (August 24, 2001) article, “Haunted by Mold,”
reported that one California lawyer, alone, is handling mold complaints
for approximately 1,000 clients. No matter where one may draw the line
between hype and reality, mold is clearly shaping up to be a very
expensive epidemic for the real estate community.
In the July 2, 2001 issue of Time magazine, “Beware: Toxic Mold”
reveals several examples of real estate losses due to mold problems
during the last two years. The article reports that homeowners have paid
thousands of dollars for repairs to their homes due to mold. In one
case, a property owner burned down his home as a last resort since
repairs would have exceeded the cost of new construction.
According to “No Sold if There’s Mold,” which appeared in Real Estate
News (April 26, 2001), “the biggest problem with molds is once they
have invaded a home, they can’t be killed, particularly if the
conditions that fostered the molds aren’t changed. When mold gets into
walls, flooring or roofing structures, the repair costs can be
tremendous.” Any environmental issue that carries such significant
financial exposure should not be ignored.
As reported in CBS’ 48 Hours news story “An Insidious Mold,”
aired on September 28, 2000, the Ballard family of Houston, TX was
ordered by the local health department to evacuate their house. They had
to move at a moment’s notice, leaving dishes in the dishwasher and food
in the refrigerator. Mold had infiltrated beneath 2,500 square feet of
wooden flooring, rendering their home uninhabitable.
Mold has even extended its reach into the insurance industry. The influx
of insurance claims has led one Houston-based insurance claims firm to
hire its ninth microbiologist this year alone. “Last year this firm did
not have one microbiologist on its entire staff,” reported The Wall
Street Journal in its June 6th, 2001 article “Insurers Blanch at
Proliferation of Homeowners Mold Claims.” “It has brought up a sense of
hysteria,” said Michael Thompson, chief executive officer of Engineering
& Fire Investigations, a Houston-based subsidiary of claims specialist
GAB Robins North America, “which will only wind up costing multiple
millions of dollars to homeowners and insurance companies alike.” A
Dallas newspaper recently confirmed this prediction.
A Dallas Morning News article (August 22, 2001) titled “Mold
Policy May Delay Home Sales,” reported that Farmers Insurance Company
had received more than 1,000 new mold-related claims this year. As a
result, Farmers Insurance hired independent actuaries that estimated the
insurance companies would pay $128.5 million in mold claims in the Texas
market in 2001. With these kinds of losses continuing to build, Farmers,
along with Allstate and Progressive Insurance Company, have stopped
selling new policies for home insurance in the Texas market. This
movement within the insurance industry has presented many challenges for
the real estate community. Closings are delayed, and other insurance
providers must be pursued.
A blurred line exists between where the science of mold ends and the
hype of mold begins. With all the attention being drawn to mold, it is
important to dig through the hype to reveal the blatant facts. No matter
how you look at it, mold is a reality, and so is the financial nightmare
that is riding its coattails and plaguing the real estate community.
Mold - Overview
What is It?
Health Effects
Types
Conducive Conditions
Screening
Media
Litigation
