Is Mold a Four-Letter Word for REALTORS®?

For nearly forty years, Florida courts held that a seller or seller’s agent withholding unknown information that would adversely impact the value of a home, is potentially liable. Since the average cost of professional mold remediation in Florida is over $3,000, mold infestation can significantly impact the value of an infested home. Although handy sellers may choose to personally remove moldy building materials, some types of “black mold” should be remediated by professionals. Either way, the seller must disclose the mold, and explain that it was removed.

HONESTY IN DISCLOSURE

The Seller’s Property Disclosure Form includes references to mold and water intrusion. It may be obvious that when an owner occupant selects “No” that s/he is being dishonest. But what if your seller is an investor who recently purchased the home and made cosmetic changes? If s/he does not know whether there is mold or water leaks or intrusion s/he should select “Don’t Know.” It’s better to not look knowledgeable than to be found to defraud an unwitting buyer.

HIDDEN DANGER

Mold infestation is often a hidden effect of water damage from leaking roofs and pipes, as well as from storm surge or other water intrusion. The paper backing of drywall and wood, or particle board of cabinets are common breeding grounds, as well as carpets, padding and other flooring materials. Moisture can wick up the paper backing of drywall, resulting in mold infestation well above the highest storm surge level. A common mistake in self-repairs is removing the bottom four feet of drywall, when the moisture reached higher levels. Even when most of the drywall and flooring have been replaced, homeowners frequently miss areas behind or beneath built-in cabinets and other structures.

MOLD LITIGATION

A major problem with mold litigation is that many mold genera and species are commonly found in Florida, and elevated levels may not be associated with undisclosed hidden water damage. A property in which HVAC malfunctioned, or was not in use for prolonged periods of time can also be a breeding ground for mold, as can one with numerous or overwatered plants.

Most mold genera and species are not generally considered toxic to everyone, but all molds shed particles from their cell walls that can irritate the airways of many people, and can cause life threatening allergic reactions in some susceptible people. Home buyers who are sensitive to mold may have to find alternate housing at additional expense while waiting for remediation. This can add significantly to the amount claimed in a lawsuit for failure to disclose mold infestation.

PROTECT POTENTIAL BUYERS

Finally, if a seller’s agent wants to show a property with known mold or other environmental or structural issues, it would be wise to have any potential buyers sign a waiver and hold harmless agreement to protect the seller and agent/agency.

I look forward to your questions about environmental issues in real estate at the panel discussion on May 15 at the RASM South Office.