Government Affairs

Toxic Mold:
A Serious Health Problem or Consumer Hysteria?

Marian Marshall
Director, MCAA Government Affairs

In preparation for this article, I did a great deal of research, much of it via the Internet. In fact, when I browsed the web, I discovered 72,359 links using the key words "toxic mold." These links primarily contained news stories (some horror stories); sites offering mold training seminars; companies that offer inspection, remediation, removal, abatement and testing; certified toxic mold inspectors; mold case evaluation businesses; and, last, but certainly not least, a special site for referral to toxic mold attorneys.

The Centers for Disease Control and Prevention (CDC) web site has information on air pollution and respiratory health, including a question and answer page concerning mold problems. According to the CDC site, "The common health concerns from molds include hay fever-like allergic symptoms. Certain individuals with chronic respiratory disease (chronic obstructive pulmonary disorder, asthma) may experience difficulty breathing." The CDC says there are very few case reports of toxic mold (those containing certain mycotoxins) causing serious health issues, such as pulmonary hemorrhage or memory loss, and no link has been established. But given the mounting interest in the mold issue, the CDC is funding a broader study of mold's health effects. Many believe that consumers' fears are being whipped up by lawyers and mold cleanup companies eager to "turn mold into gold."

State Level
In Texas, certain insurance companies have placed a moratorium on new home insurance policies until the Texas Department of Insurance decides whether to allow restrictions on mold coverage. This has caused insurance rates in the state to skyrocket; in a few instances, home closings have been delayed because people couldn't get insured.

According to the Texas Department of Insurance, water-related claims — in which mold damage is a component — consisted of $5,000 or more in Corpus Christi, costing insurers an average of 537 percent more than the average statewide cost per policyholder. A Corpus Christi homeowner with an $80,000 brick veneer home can expect to pay anywhere from $800 to $1,745 annually for home insurance for a comprehensive policy. That figure jumps to a high of $2,094 for a wood-frame home. If used properly, that could be a big marketing angle for our industry.

In California, legislation is now on the books requiring landlords and owners of both commercial and residential property to disclose to prospective buyers and tenants the presence of toxic mold that exceed certain exposure limits. The law does not require landlords to sample, inspect or test for levels of such toxins, but it doesn't attempt to shield liability either. Nevertheless, case law has held landlords liable (and builders and contractors as well) and may continue to hold others liable even if they don't test.

Federal Level
Legislation has been introduced by Representative John Conyers Jr. (D-MI) that, among other things, would establish a research and public education program on mold and create a national toxic mold hazard insurance program. This legislation, the United States Toxic Mold Safety and Protection Act, otherwise known as the Melina Bill, has been referred to several Committees in the House of Representatives, including Energy and Commerce, Financial Services and Ways and Means. The bill currently has 26 cosponsors, but has not been the subject of any hearings in either committee.

To put it mildly, the bill is very broad and, in my view, will have significant budgetary impacts, not to mention potential impacts on the construction industry.

In addition to requiring the CDC and the Environmental Protection Agency (EPA) to undertake a joint study of the health effects of indoor mold growth, the bill also seeks to establish standards for mold inspection, mold remediation and toxicity testing. The EPA, CDC, National Institutes of Health and the Department of Housing and Urban Development would also have to sponsor public education programs to increase public awareness of the dangers of mold growth or toxic mold.

Under this legislation, lessors of each unit of public housing property would be required to conduct annual inspections in accordance with model standards and techniques for preventing and controlling mold in new and existing buildings as set forth in the bill. The HUD Secretary and Administrator of the EPA would also be required to promulgate regulations for the disclosure of mold hazards in public housing that is offered for sale or lease.

The bill further authorizes grants to be made available to state and local governments to cover costs associated with remediating mold growth in buildings owned or leased by such governments, including but not limited to schools and multi-family dwellings. The grants would also cover the costs of temporary housing, food and moving costs for periods not in excess of six months for individuals severely impacted by toxic mold in their residences who are without insurance coverage and who don't have the financial resources to obtain alternate housing. Better still, tax credits of up to $50,000 would be authorized to cover 60 percent of the mold inspection and remediation expenses paid or incurred by the taxpayer and not reimbursed by insurance in any taxable year.

The most extensive sections of the bill are those that pertain to the creation of the National Toxic Mold Hazard Insurance Program. The Director of the Federal Emergency Management Agency would be required to establish and carry out an insurance program to enable interested persons to purchase insurance against losses resulting from mold hazards in real properties throughout the United States.

Given the increasing number of law suits around the country and the level of hysteria related to them, it may well be that — just as the government did with terrorism insurance post 9/11, not to mention the legislation Congress is currently working on to resolve asbestos claims — they are once again asked to step in and resolve the legal quagmire surrounding mold.