Builders’ New Weapons in Battle Against Mold

May 15, 2005

Over the past several
years, mold has
crept into thousands
of commercial
buildings and
multi-family dwellings
across the country, causing
serious concern for builders.
Builders are beginning to realize
that mold is growing on their bottom
Perception is reality, and if the
perception is that there is mold
on-site, then the builder’s reputation
has been tarnished, even if
that particular strain of mold does
not affect health. This is especially
true in today’s market for three
• First, there is no longer
coverage for mold in any
commercial or multi-family
property-casualty insurance
– a builder’s first line
of defense prior to the past
three years.
• Second, since that coverage
is gone, the next alternative
for a financial solution is litigation
– which is one of the primary
reasons lawsuits involving mold and
real estate are being filed at the rate
of ten or more per day in the U.S.
• Third, despite a decade of environmental
changes in building protocols
having to do with issues such
as asbestos, lead paint, and leaking
underground storage tanks, mold is
an altogether different enemy. At
least with any of those other environmental
hazards, if they were
removed, the owner knew they were
gone, and the owner and lender
moved on. Unfortunately, that’s not
the case with mold; in fact, it’s not
even close. This problem cries out
for prevention. The best approach is
to stop mold before it starts.
While the scientific debate crawls forward
over how mold affects physical health,
there is no doubt that mold affects the
26 • I N T E R FA C E A U G U S T 2005
A favorite hiding spot for mold – inside wall cavities.
financial health of commercial and
multifamily properties. The effects
have become so apparent that major
builders’ and bankers’ associations
have formed taskforces to research,
assess, and recommend risk mitigation
techniques. The author has
been researching this issue for more
than a year on behalf of his company’s
clientele, which includes companies
that build and maintain
roofs. This article offers suggestions
aimed at prevention that we believe
all builders should know about now.
As a real estate lender for 20
years and a consultant concerning
environmental issues in real estate
for more than 12 years, this author
believes that unless builders drastically
change the way they approach
the mold problem, the worst is yet to
come. Some say the days of huge
multi-million-dollar jury prizes in
mold cases are over. This may be
true for bad faith claims between
individuals and insurers, which
were not really about mold in the
first place but more about bad faith
later. Mold liability lawsuits, however,
initiated by retail tenants, commercial
employees, and multi-family
residents, are rising each month.
We live in a litigious society, and these
lawsuits have spread across the country
like mold, because insurers in 43 states
and the District of Columbia have written
mold exclusions or drastic deductibles in
their standard property-casualty policies.
In addition, states like California now hold
builders accountable for mold damage on
properties for ten years post-construction.
The only other risk excluded across the
board with this kind of speed is terrorism.
Why? Mold contamination is certainly not
as catastrophic as a terrorist attack, but the
reaction from the insurance industry was
similar, which underscores how serious the
mold issue has become.
Understanding Mold
The conditions under which mold
occurs, according to an analysis developed
by the University of Florida, require the existence
of spores, moisture, a normal temperature
range, and the presence of a food
source (cellulose—as in paper). Because
temperatures, airborne spores, and moisture
are issues dealing with Mother Nature,
the only truly controllable variable is the
food source. The food source primarily
Water intrusion during construction can wreak havoc on interior drywall, setting the stage for mold
A U G U S T 2005 I N T E R FA C E • 2 7
includes products with organic content,
which account for approximately 80 percent
of the surface area of a building. Water plus
organic material means mold. As one consultant
tells me, “It means mold 100 percent
of the time.”
Organic products have been major factors
in buildings and construction for
decades: carpets, ceiling tiles, insulation,
and paper-faced wallboard. When it comes
to products with organic content, there are
only two kinds: those with mold and those
that will have mold.
Four Myths about Mold
1. If moisture can
be controlled,
mold can be
controlled. The
fact is that humidity
is here
forever. If one
lives in or builds
and finances
properties in
certain parts of
the country, it
will likely be
worse, and accidents
like leaky
roofs happen.
We humans with
our four bathrooms
and our
d i s h w a s h e r s
emit more water
in a day than is
caused by poor
Water is a fact of
2. Remediation is
the solution.
that is not true.
If mold is present
and a remediator
is paid to
remove it, (given
the right climate or the unseen
water-soaked area of the building), if
mold has 48 hours, it will be back
for another visit. If the conditions
are right next year—how about
another attack in another area of
the building? Let’s speculate that it
is in an area that won’t be detected
until it’s too late. The ugly cycle
starts again.
Once mold has become visible and able
to be remediated, it’s too late. No matter
what is done, unless you remove everything
that might have caused the problem, or
“scrape the ground,” as they say, mold will
likely return.
Today’s average cost of remediating
mold in a 2,000-square-foot business is
$40,000 or more, and that’s just the first
time around. In contrast to that jaw-dropping
figure, you could spend as little as a
few hundred dollars on preconstruction
mold prevention on that same building and
stand a very good chance that you’ll not
have to worry about mold contamination.
One builder who specializes in $1 million to
$3 million houses on the East Coast, said,
“The equivalent of making these homes
mold resistant is probably the same as
upgrading a sink and a light fixture in a
bathroom.” But I’ll get back to prevention in
a moment.
I’m not disparaging mold remediators,
I’m just saying that there is a much better
solution for the future. It lies in prevention,
not in remediation.
3. Inspections reveal mold. A recent
interview with a number of remediators
showed that more than 80 percent
believed that a mold inspection
only is productive and helpful if the
mold is visible. Beyond that, we have
no standards to judge whether the
mold present is above or below a
certain standard. Imagine the complexity
of attempting to set standards
for, say, 100,000 types of
mold and 1 million different types of
immune system reactions; it simply
is not going to happen. This is
unfortunate, because standards
would help builders a lot.
4. “Mold accumulates within structures
over long periods of time.”
Wrong. The majority of serious mold
problems start before construction
begins. The way in which building
28 • I N T E R FA C E A U G U S T 2005
Moisture and condensation are terrific conditions for mold. Moisture-laden wood wets paper-faced drywall,
creating a feast for mold.
materials are stored at the warehouse,
transported to the site, and
stored on-site will often determine
the probability of mold damage
down the line. Because of leaky storage
facilities and unsealed conditions
on trucks and construction
sites, building materials are often
exposed to mold spores before a contractor
puts hammer to nail.
Builders Taking Action
Builders have an opportunity to prevent
the likelihood of mold in the future by educating
themselves on the latest best-practice,
mold-resistant building protocols and
mold-resistant building materials. Real
estate lenders are considering new guidelines
that require the use of mold-resistant
building products, mold-resistant construction
techniques, and effective inspection
practices, especially inspections that take
Test your knowledge of roofing with
the following questions, developed by
Donald E. Bush Sr., RRC, FRCI,
chairman of the RRC Examination
Development Subcommittee.
These humidity-related questions are
based on information contained in
Heinz R.Trechsel’s “Moisture Analysis
and Condensation Control in Building
Envelopes,” ASTM Stock Number
MNL 40, Chapter 1 – Moisture
1. What is the meaning
of “absolute
2. What is the meaning
of “humidity ratio?”
3. What is the meaning
of “specific
4. What is the meaning
of “relative
5. What is the meaning
of “water vapor
Answers on page 30
A U G U S T 2005 I N T E R FA C E • 2 9
Leaking pipes and high moisture environments, combined with paper-faced drywall, can
turn a recreation room into a mold room.
1. If moisture can be controlled, mold
can be controlled.
2. Remediation is the solution.
3. Inspections reveal mold.
4. “Mold accumulates within structures
over long periods of time.”
place while the building products lay on the
ground at the very start of construction.
Builders, who are just as exposed as
lenders, should lead rather than follow on
this issue.
Wallboard is the most common element
of any post-1960s building; unfortunately,
the paper facing on the front and back provides
a great home for mold. Builders
should use paperless wallboard, which is
sheathed with fiberglass rather than paper.
These kinds of products have recently been
developed for the inside of buildings, a technology
that has been universally accepted
and extremely successful for the exterior for
20 years. To back that up, builders should
also require inspections before, during, and
after construction that check for the presence
of mold and mold-resistant products.
In other words, if one were to build a
building of totally inert materials, such as
fiberglass, aluminum, and other man-made
inorganic materials, and it was built wisely,
there probably would be no mold problem.
Contractors and architects are becoming
somewhat concerned about the difference
in price when they bid. However, the cost
increase – a trivial fraction of the property’s
sale price – now pales compared to the
future benefits to all involved. If a property
owner, investor, or lender understands that
a specifier or builder is trying to protect him
from this potential financial disaster, he will
likely look at the bids in a different way and
not just go for the low ball.
Builders should follow this check list to
prevent moldy construction projects:
1. Use mold-resistant building materials
(i.e., fiberglass-faced roofing
panels, paperless wallboard, nonwoven
house wrap, non-paper-faced
insulation, etc.) The additional cost
of building with mold-resistant
materials is miniscule compared to
the dramatic costs to remediate a
mold infestation, not to mention the
costs associated with third-party
lawsuits stemming from bodily
injury claims and construction
2. Follow construction protocol to prevent
moisture from entering a building.
Techniques include installing a
waterproof roofing system, effective
location of vapor barriers, putting in
windows with low potential for condensation,
and using newly developed
mechanical ventilation systems.
Moisture cannot be prevented
from entering the structure, but
steps may be taken to avoid excess
accumulation and reduce the likelihood
of leakage. In addition, the
Environmental Assurance Group
(EAG) is encouraging the use of new
applications such as spray-on coatings
that prevent mold, as well as
fire and other perils.
3. Order mold inspections before, during,
and after construction. Unlike
most inspections, a mold-specific
(indoor air quality) engineer will
know where, how, and when to look
for it, saving the client, specifier, and
builder thousands of dollars. I know
a builder who caught a subcontractor
putting up wallboard by nailing
slats that were already black with
mold into a ceiling. These were new
materials that had just been sitting
at the jobsite for a couple of days,
and already mold had totally covered
them. If the builder hadn’t
caught it, those slats would have
stayed in the ceiling, and the mold
would have metastasized to the
paper-faced wallboard and spread
throughout this million-dollar home.
Answers from page 29:
1. Absolute humidity — the ratio of
the mass of water vapor to the
total volume of the air sample.
In SI [International System of
Units] units, absolute humidity
is expressed as kg/m3. In inch/
pound units, it is expressed as
2. Humidity ratio — the ratio of
mass of water vapor to the mass
of dry air contained in the
sample. In SI units, humidity
ratio is expressed as grams (g) of
water vapor per kilogram (kg) of
dry air.
3. Specific humidity — the ratio of
the mass of water vapor to the
total mass of the dry air. In SI
units, specific humidity is
expressed as kilograms of water
vapor per kilogram of dry air.
4. Relative humidity — the ratio, at
a specific temperature, of the
moisture content of the air
sample if it were at saturation,
and the actual moisture content
of the air sample. It is given as
a percentage.
5. Water vapor pressure — the
partial pressure exerted by the
vapor at a given temperature,
also stated as the component of
atmospheric pressure contributed
by the presence of water
vapor. In inch/pound units,
vapor pressure is given most
frequently in inches of mercury
(in Hg); in SI units, it is given in
Pascals (Pa).
30 • I N T E R FA C E A U G U S T 2005
Charles Perry is founder and principal of West Hartford, CTbased
Environmental Assurance Group (EAG), consulting to
the real estate lending industry on “Smart Practices” risk
management, property damage, and liability management as
it relates to mold as well as other environmental exposures.
The company’s clients include nationally recognized banks,
municipalities, school systems, healthcare facilities, hospitality
property owners and managers, real estate developers,
builders, and owners. Mr. Perry was a real estate lender for
20 years and the owner of an environmental consulting firm for 12 years. For more
information, contact
Charles Perry