September 2004

A damp spot appears in a ceiling after an intense rainstorm; a hose loosens from a washing machine, spilling gallons of water onto a basement floor; weeks after a moldy odor is detected, a plumber finds a slow leak behind a wall. There are over 119,000,000 housing units in the United States and nearly 4,700,000 commercial buildings, and almost all of them experience leaks, flooding or other forms of excessive indoor dampness. It is well accepted that excessive indoor dampness can lead to mold or microbial fungal growth. But the more important question is whether exposure to that mold and fungal growth has a significant adverse effect on the health of human occupants in the excessively damp environment.

Indoor dampness with mold and fungal growth has received a great deal of attention in the mass media, leading to a form of mass hysteria over the presence of mold. This hysteria was somewhat tempered by the Texas Medical Association’s report in September 2002 entitled “Black Mold and Human Illness.” That report concluded that the peer-reviewed literature had not established a causal link between mold exposure and long-term health effects, as chronicled in the November/December 2002 issue of this publication. As then noted, more scientific studies were being conducted to address the issue. Meanwhile, claims for property damage and personal injury continue unabated in the residential housing arena, accompanied by a sharp rise in these claims in commercial property, particularly in the sale of multi-unit housing such as apartments, townhomes and condominiums.

Against this backdrop, the Centers for Disease Control and Prevention (“CDC”) asked the Institute of Medicine (“IOM”), an organization affiliated with the National Research Council and National Academy of Sciences, to review the existing scientific evidence. An IOM committee (the “Committee”) was charged with conducting “…a comprehensive review of the scientific literature regarding the relationship between damp or moldy indoor environments and the manifestation of adverse health effects, particularly respiratory and allergic symptoms,” and to “make recommendations or suggest guidelines for public health interventions and for future basic science, clinical and public health research in these areas.” In short, the IOM was asked to undertake the first truly comprehensive study to determine if there was scientific support for a causal link between mold and fungi exposure and long-term health effects, an issue of great importance to all parties involved in the sale, management or assessment of residential and commercial properties.

The Committee has recently released a pre-publication version of its report. It noted that, while there was evidence linking mold and fungi exposure to short-term illness and the aggravation of pre-existing respiratory conditions, there was little or no scientific evidence to establish any causal link between mold and fungi exposure and any deleterious long-term health effects. The Committee agreed with the earlier study by the Texas Medical Association that speculation about long-term health effects based on mold exposure is just that – speculation lacking support in accepted scientific research.

The report is expected to have a significant impact on real estate sales transactions and litigation. Countless real estate transactions have failed over the last few years due to the buyer’s and seller’s inability to agree on the need for and extent of appropriate mold remediation. Countless pages in written agreements for the purchase and sale of both residential and commercial property are now devoted to risk assessment for fear of later claims based on mold. The courts are full of contract, personal injury and property damage claims arising from alleged mold exposure. Mold claims have also become a staple of construction defect cases. The Committee’s work should lessen the economic impact of these mold claims and allow a freer market for both residential and commercial property.

The report is well grounded in scientific fact. Mold spores are regularly found in indoor air and on surfaces and materials – no indoor space is free of them. Mold growth is generally accompanied by bacterial growth. It is the presence of excessive mold, particularly stachy botros (often called “black mold” or “toxic mold”), and elevated bacteria levels that have led juries to conclude there must be some connection between those levels and alleged health effects. Yet, as the IOM points out, there is precious little agreement in the scientific community on safe exposure levels, monitoring criteria and exposure assessment methods. The IOM has identified a need to improve these areas before final determinations can be made.

There is a sufficient basis for initial determinations, however, even using the somewhat flawed scientific methodologies available. The Committee divided the scientific evidence into three basic areas: (1) areas where there was sufficient evidence of an association between exposure to damp indoor environments and some respiratory health outcomes, (2) areas where there was limited or suggestive evidence of an association, and (3) areas where inadequate or insufficient information existed to provide the causal link. The Committee found sufficient evidence of an association between mold exposure and certain short-term health effects, some evidence of an association between exposure and longer-term health effects in susceptible people such as asthmatics or those suffering from HIV/AIDS and little or no evidence to support an association between exposure and long-term health effects in an otherwise healthy population.

The IOM found sufficient evidence of an association between exposure to elevated mold and bacteria levels in a damp indoor environment and certain upper respiratory tract symptoms and cough. Sufficient evidence was also found of a link between this exposure and asthma symptoms in sensitized persons such as asthmatics. The evidence also shows that the symptoms rapidly disappear when the individual is removed from the impacted environment. In other words, people exposed to highly elevated mold and bacteria levels can develop cold and allergic symptoms, particularly persons with pre-existing allergies, asthma or pneumonia-like conditions. Those conditions abate when people are removed from the affected environment or that environment is cleaned and repaired.

The IOM found little or no evidence to support the litany of long-term health effects often raised in the litigation arena. The Committee found no evidence to support a causal link between mold exposure and cancer, long-term effects on the reproductive system, pulmonary hemorrhage in infants or many of the other claims raised in these cases. While there is some suggestion that long-term exposure can make otherwise healthy children more susceptible to developing respiratory problems, such as asthma, there is insufficient evidence of a long-term impact. In short, the IOM found no validated causal link between mold exposure and the long-term health effects often raised as a way to win the litigation lottery in personal injury claims.

The practical impact of this report on the real estate markets and related litigation, and the response of public health agencies, could be significant. The IOM report should take away some of the present hysteria and replace that paralyzing reaction with simple, common sense notions. First and foremost, test for elevated levels of mold and bacterial growth when external evidence such as odors, water leaks or visible mold are observed. Promptly repair the source of excessive dampness, remediate the existing mold and bacterial growth and temporarily relocate occupants while the work is being done. Pay particular attention to any occupants suffering from pre-existing conditions such as asthma, pulmonary or respiratory disease or HIV/AIDS. Have commercial and residential property tested when considering that property for purchase and be sure to assess the risks and allocate the funds to cover the costs of any necessary remediation. If theses simple steps are followed, available scientific literature suggests there is little or no threat of catastrophic personal illness to the occupants.

The mass media has fueled a mass hysteria about mold exposure in living spaces. While that hysteria is receding as more scientific evidence becomes available, vigilance is still required. The cost of vigilance is relatively low and the benefits very high – by taking care to avoid water intrusion and other mishaps that cause indoor dampness, stop water conditions when discovered and remediate mold conditions as they occur, you can greatly limit the possibilities for adverse health effects and exposure in the litigation area. The benefits to property owners, buyers and sellers of real property, and to public health, all point in the same direction. By taking these simple steps owners can minimize exposure, buyers and sellers can more easily consummate transactions, and the public health will be protected.

If you have any questions regarding this bulletin, please contact Barry MacNaughton, Esq., Editor and author of this publication and a partner in ECJ's Litigation Department, at 310.281.6342 or bmacnaughton@ecjlaw.com. If one of your colleagues would like to be a part of the Real Estate Reporter mailing list, or if you would like to receive copies electronically, please contact Cynthia S. Kaiser at 310.281.6328 or ckaiser@ecjlaw.com.

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