MOLD and LIABILITY: What’s really at Stake for Realtors and Property Managers

This story is based on actual situations that have occurred during my experience as a certified mold inspector, and though it pertains to residential and commercial properties, these incidents were in retail establishments. Shopping centers and strip malls have flat roofs, which are prone to leak, especially during a rainy season.  The water often penetrates the ceiling of the retail stores, but also travels behind and between the walls.  If the water leak is on the floor, it will wick up the walls as it travels around and between spaces.

The tenant calls the property manager who dispatches a remediation company to clean up the water and dry out the structure.   The clean-up can be assessed visibly, but when the space behind the walls is not properly and completely dried out, the secondary damage can be significant.  Specifically, mold spores that are always in the air looking for a place to grow will find their way to the damp areas, and within 24 to 48 hours mold growth will begin.  If the mold is not visible, it may take months before the problem is recognized.  In this case, the remediation crew did what they deemed necessary at the time to clean up and dry out the space.

Six months later, the tenant calls the property manager and says they smell mold.  When I am called in as a certified mold expert to inspect, I find that the mold growing behind the base board and in the walls and ceiling is significant, and the air quality samples in the space measure an unhealthy level of mold spores. The tenant cannot stay in the space and service customers.  And so we have a big mess.  Aside from the health issues of the air quality, the property manager may now hold the original remediation company liable for negligence in cleaning and drying the space properly.  The tenant is losing money every day and will likely hold the landlord responsible for the lost revenue and customers.  While the lawyers are at work, the property manager will be responsible for the extensive remediation of the mold growth.    

Now  let’s do a replay because this is when the services of a certified mold inspector become invaluable.

‍The property takes on water and Smith Environmental Solutions is on site with the remediation company.  With my guidance as the mold inspector, investigative work is performed to determine the exact extent of the water infiltration.  Then a report is issued detailing the work to be done.  At the completion of the remediation,  a mold inspection is again performed and if complete, I sign off that the work was done in  accordance with industry standards and mold growth should be arrested.  Now the liability for accuracy is in the hands of Smith Environmental Solutions. The cost of the mold inspection, maybe some additional sheetrock repair, and/or more drying heaters are likely a fraction of the cost compared to the scenario where the space was not completely dried in the first place.  In this case, it could be 10 times or more, not considering disruption.  If you are a realtor, a property manager or a remediation company, this is critical information.  Cases like this can have far reaching ramifications on insurance costs, lease terms, company and personal reputations, and in some cases legal fees alone could threaten a company’s very survival.  Every building has the potential for mold growth.  It is not a matter of if, but when.  Moisture and an organic food source are all that mold needs to flourish.  Wood, paper, fabric and leather are some good examples.  In the case of water infiltration, the situation can be very serious.  Remediation or Restoration companies are well equipped to clean up the mess and restore the structure.  Ask if they have a certified mold inspector on staff or a third party that they work with.  This will transfer the liability to the mold inspection company. This is crucial. The additional upfront cost will pay for itself ten times over when you find yourself in a situation as described above.

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