Although mold has been on this earth longer than we have, it has not represented much of a litigation threat until recently. In the last five years, things have changed dramatically. Mold claims are on the rise, lawsuits are being filed and settled, and insurance companies are being forced to pay mold claims.
This past November, the owner of a luxury apartment complex in Florida agreed to pay several millions of dollars to settle a class action lawsuit which had alleged that an apartment building was mold infested.
Under the settlement agreement, the owner reimbursed tenants for medical bills and property damage that the class action lawyers alleged was related to a mold outbreak. According to published reports, regulatory filings by the owner indicated that the settlement and related costs would amount to $25 million. $25 million for mold! In addition, published reports indicate that $38 million was spent on mold remediation costs and another $12 million for relocating tenants, replacing damaged furniture and clothing.
This past July, teachers in a Florida school district alleged that mold inside classrooms was making them sick. They hired a lawyer who sought monetary damages in order to compensate the teachers for their failing health and money to clean up the mold. In that case, the school district complained that it had spent thousands of dollars to remediate mold and that it did not believe it is responsible for making anybody sick.
Just several weeks ago, officials at North Carolina Central University proclaimed that two dormitories were now free of toxic black mold. That was the good news. The bad news is that the invasion of the toxic mold required that the two dormitories be placed out of commission for an extended period and that students be housed in area hotels. At the end of the day, the North Carolina Central University ended up spending $25 million on black mold.
The University has since hired lawyers to take legal action against those who designed and built the dormitories. According to the school, somebody has to pay for the toxic mold and it is pursuing the architect and construction company. There is enough misery in this mold story to satisfy everyone. The bottom line is that mold has been here longer than we have. But mold litigation is new. New, but not going away in the near future.
Builders, developers, architects, home inspectors, lawyers, and every other professional and trade member involved in selling and constructing homes needs to be aware of the mold issue. When things go bad and litigation is filed, everyone ends up becoming a defendant. Mold litigation will ultimately be very encompassing.
It is important that developers use ventilation systems that are sufficient for combating mold issues. Whenever leaky roofs or leaky pipes are determined to exist, they need to be responded to properly, because mold likes moisture and it likes to grow in the dark. Proof that a developer, or former owner, was aware of a long-term roof leak or pipe leak and failed to abate it might very well subject somebody not just to the cost of addressing the mold issue and paying for health-related bills, but perhaps even punitive damages designed to punish the wrong doer for ignoring the problem.
As the mold bill increases, who is going to pay for it? Insurance companies will ultimately have to pay many mold-related costs. So will the uninsured, builders, and perhaps in certain cases even real estate professionals whom, it will be alleged, failed to disclose mold conditions.
At the end of the day, all of those costs will be redistributed among the general population. Rest assured that at the end of the day, we will all pay to address emerging mold concerns.