Bankers' Group Revisits Effects of Mold on Real Estate

Concerns about mold and its potential effects on indoor air quality and property values appear to have taken a back seat to other real estate issues, but that doesn't mean that someone isn't thinking about.

For example, the Mortgage Bankers Association last week published an update of a white paper on the effects of mold in the commercial and multifamily realm, "to reflect the most current information on mold mitigation, standards for conducting mold assessments, legal issues and insurance issues."

Don Glitz, corporate insurance risk manager of Capmark Financial Group, explained that the update was "an attempt to eliminate the 'misinformation' that exists with regard to the mold issue."

The update, the bankers' group cautioned, is only a "snapshot," since, as with many environmental issues, changes in the way mold is viewed and handled can occur frequently with research.

The reason for the continued interest in mold by lenders is obvious. Mold and dampness can directly damage buildings and their contents, but there are other repercussions, including a reduction in cash flow through lost rents or rental value and expenditures for remediation costs.
When moldby issues are uncovered in a building, whether residential or commercial, there is a perception that the structure has become unfit or unusable, and that can result in a loss of market value.

After Hurricane Katrina, for example, some real estate agents in areas of Louisiana and Mississippi were reporting that many buyers were pulling out of deals if they even minor exterior damage to homes that could result in mold issues.

In addition, as the MBA white paper, points out, there are costs of litigation with tenants, purchasers of property or persons who claim to have been injured.

The chief concern has been with black mold. While less common than other molds, this one is more dangerous to humans because, given the proper environmental conditions, it can create multiple toxic chemicals called mycotoxins. These toxic byproducts exist in the spores of the mold, as well as in the tiny fragments that can become airborne. Of particular concern is the threat that humans will inhale and ingest these toxic spores.

According to the Centers for Disease Control and Prevention, there are few case reports that toxic molds inside homes can cause unique or rare health conditions such as pulmonary hemorrhage or memory loss. A causal link between the presence of a toxic mold and these conditions has not been proved, the agency says.

For the last few years, insurance companies have become unwilling to write new policies and have been excluding coverage of mold from existing ones. Such coverage as is available is underwritten as part of a "stand-alone" environmental insurance policy. There has not been any significant increase in the availability of coverage for mold as more information on it has become available, according to the mortgage bankers team.

Air quality issues "also may act as a negative constraint on a lender's or servicer's decision to foreclose and resell, continue operations or abandon property," the mortgage bankers' group observed.

Even before Hurricanes Katrina and Rita, New Orleans' mold problems were out of control, owing to the region's humid climate. With so much standing water for so many weeks and months, and no way to dry things out quickly, "you're able to find just about every variety of it," said Frank Panico, who is an expert on flood and fire cleanup issues.

That's why the best course of action when mold or moisture is found is to take care of the problem quickly, the MBA said.

Avoidance or reduction of mold risks begins at the moment the first sketch for a new structure is put on paper and involves proper selection and use of professionals, contract terms, contractors, subcontractors, design and engineering professionals, materials and construction techniques, as well as ongoing inspection, documentation and a complete moisture-management assessment plan.

For existing buildings, mold cleanup first requires elimination of moisture that is fueling the mold growth. The next step is to conduct a detailed visual inspection of the affected area to ensure that the full extent of an outbreak is determined and additionally to demonstrate that an outbreak is in fact limited in scope or severity.

Mold and materials technology continue to become more effective. There are continuing developments in technology to detect hidden moisture as well as new or improved building materials that are immune to or resist mold attack.

This may lower remediation costs and increase confidence in the effectiveness of the cleanup work that has been done.

by: Al Heavens
Published: July 26, 2007

Mold Testing

One of the biggest issues and debates that I have dealt with over the years is the need for mold testing. While other companies don’t agree with me, I am very committed to testing always being performed after a job is completed. By comparing the testing results in the area where the work was performed and comparing it to background level (the outside) the owner can be assured that the work was done properly. In addition to the air sampling that is performed the tester will also do a visible assessment to ensure the work was completed properly. It is like having a second set of eyes to pass the work.

What to look at for? Don’t have a company perform the testing and perform the remediation. I like to compare these types of companies to a cheating 12th grader. If I was a high school senior and the teachers told me to grade my own work, I would always pass. So common sense will tell you to NEVER although a remediation firm to test its own work. And never let a testing company, test and then perform remediation. Same thing goes: if a testing company is hired to test prior to any work being done, they will always find the home or office in need of remediation, mainly because if they remediate it is more money in their pocket.

My advice would be to find a testing company that does not do any remediation. That way there is no conflict of interest. They are there to perform a reliable and honest assessment of your home and are not in search of additional work. These independent companies can also direct you to a great remediation firm. Testers get to see the remediators work day in and day out, and can tell you who you want to stay away from.

Who’s the best to TEST! I have probably been associated with 20-30 testers during my time in the industry. I have been disgusted a couple of times, disappointed a few, and more often than not unpleased with the individual or the company. But about a year ago I had some testing done on a home (which my company paid for because the homeowner did not find it important) and was blown away with the professionalism and detail that went into the survey. It was exactly what I had been looking for. A company and an individual that knows what they are doing and that I would be confident in referring to my clients.

I continue to use this individual today. If you are in need of testing, don’t hesitate, give MMTS Environmental a call. Jon Given is at the top of his class in this industry. You can check out his company’s website at http://www.mmtesting.com/ or you can call him directly at (443) 309-2128. Jon can also attest to quality of work that I perform since he has seen so many of my projects.

All the Best

Welcome and an Introduction

Welcome Everyone.

I have decided to start this content with a quick introduction and purpose for this forum.

First, who am I. My name is Marc Brenner, I am the owner of a Pennsylvania based environmental company, Brenner Environmental. Brenner Environmental is a mold remediation speciality company that currently serves PA, NJ, DE, and portions of MD.

Other than the mold remediation field Brenner Environmental has expertise in other fields, services currently offered can be found at: http://www.brennerenvironmental.com/.

Second, what is the purpose of this forum.

This forum has a dual purpose.

First, it is for information gathering and no-pressure advice. To often business owners are more worried about the bottom line then they are about providing an honest and trustworthy service. In the years that I have been in business, I have been trying to eliminate that, or at least be the minority. Which ever way you look at it, I am sleeping just fine at night.

The arrival of the mold industry and the exploits of "killer molds" by national television and broadcast media has provided a scare throughout the housing industry. Here on this forum you will only get the truth. Truth which is backed by scientific information or information gathered and considered accurate from reliable sources throughout the industry. If you have a question concerning an issue, feel free to contact me and I will provide you an answer. If I don't have the answer then I will direct you to someone (an honest person) that can help you.

Second, I will use this forum to update everyone on the advances of the Brenner Environmental team. This might include customer referrals and letter, pictures from past and ongoing projects, new available services, and updates on mold in the news and other related articles of interest. I have yet to decide how frequently I am going to update this forum. Ideally, I would like to press for at least once a week or even more frequently. Just keep checking back and you will get a grasp of how this will work.

In the mean time take a look at http://www.brennerenvironmental.com/
or email me at brennerenvironmental@mailbolt.com with any advice or questions.

All the Best