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Mold has been a topic of construction discussion for years, but many in the industry do not have a firm command of the risks it poses and how to develop effective plans to manage those risks. Mold causes delays, extra costs, insurance claims and creates various liability exposures. Tensions between owners, contractors and building users can become highly charged because of actual or perceived health effects of mold exposure. However, mold is a manageable challenge. Forethought, planning and having qualified experts on-call is key to effectively assessing and addressing a water or mold event. 

Mold Basics

Mold spores are virtually everywhere and usually not a cause of concern. It is only when mold is permitted to grow unmanaged that it begins to pose special challenges in buildings. 

Mold needs four elements to grow:

  1. mold spores, which are microscopic and move in an airstream virtually everywhere indoors and out;
  2. temperature conditions similar to those we live in (approximately 40° to 100° F); 
  3. a food source (in construction, commonly drywall, particle board, plywood, wood finishes, cellulose and paper backed products, other organic finishes and dust); and
  4. water.

The only one of these elements that can be readily controlled in construction is water. Leaks caused from weather and building systems and materials getting wet during storage all pose potential problems. In addition to free water, condensation from high humidity can also permit mold growth. Studies utilized by the EPA indicate mold can grow within 48 hours of a wetting or condensation event. Therefore, addressing water and high humidity should be the primary preventative action for controlling mold.

Mold as an Environmental Contaminant and Health Concern

Often considered a “contaminant” in buildings, the health effects of mold exposure are typically attributed to inhalation of airborne spores. While mold can potentially affect human health by a variety of mechanisms and can cause toxic effects in certain unusual circumstances, the primary effect of mold growth to typical, otherwise healthy building occupants, is exacerbation of allergies in sensitive individuals. (Enhanced prevention, identification and clean-up procedures should be employed in health care facilities and other buildings occupied by populations of special sensitivity or compromised immune systems.)

There is no fixed, numerical “mold level” recognized by industrial hygienists as indicating a problematic building or “exposure” in the same sense that exists with other occupational hazards regulated under OSHA, like asbestos or lead. Further, “mold-free” is not a necessary or achievable standard since mold is present virtually everywhere. The absence of a yardstick against which to assess airborne mold spore levels has led to some common misconceptions, but has also led to a practical and generally accepted approach to evaluating and dealing with mold in buildings. This practical approach focuses on two key elements: visual inspection to identify mold growth and identifying and addressing sources of water or humidity.

As water and/or excess humidity are the primary culprits, industrial hygienists use both simple and sophisticated tools. These tools include their eyes, noses and fingertips, electronic instruments to measure relative humidity in the air, electronic meters and infrared thermal cameras to measure moisture in building materials and, in some cases, environmental mold sampling equipment.

Standards and Protocols for Mold Remediation

A project-specific assessment and plan should be tailored to each case—there is no one size fits all approach. Minor areas of growth may be dealt with differently than wide-spread areas. A preliminary assessment of the applicable variables and conditions should be promptly implemented, employing, if appropriate, an expert industrial hygienist to assess the issue and develop and implement a clean-up protocol. Forensic engineers may be called in to evaluate where the moisture came from and how to address it, looking at exterior envelope conditions, HVAC systems, air and vapor barriers, plumbing or other applicable building systems. A lawyer may be part of the team to assist in, among other things, evaluating responsibilities under contracts and insurance policies, writing notices and preserving legal rights, documenting the response and, if litigation or claims are reasonably likely, maintaining appropriate legal privileges.

The Institute for Inspection, Cleaning and Restoration Certification (IICRC) is a prominent organization representing the mold remediation segment of the industry. IICRC S520 Standard for Professional Mold Remediation is often cited in water/mold remediation work plans and contracts. From a technical standpoint, the three major tasks for mold remediation are to dry wet building structure, remove porous wet materials and those with mold growth, and clean remaining non-porous surfaces via rigorous wet wiping with detergent/sanitizer and HEPA vacuuming. 

If mold growth is extensive, demolition/disturbance of materials potentially releases large quantities of mold spores into the surroundings. Consequently, the work area is often enclosed with temporary barriers and placed under negative pressure with specialized exhaust and filtering equipment, with workers wearing personal protective equipment. Once the remediation is believed to be complete, the space is then evaluated for “post remediation verification,” which primarily involves a visual inspection by an independent third party, but may also involve air and/or surface testing for mold, as may be appropriate. Whether there is a mold testing component of any post-remediation inspection and what format it should take currently remains unsettled in the industry. However, certain jurisdictions have regulations that require mold testing as part of a final inspection. Indeed, in some cases a written verification that the underlying cause of the mold has been addressed is required. Be sure to understand the requirements in the jurisdiction where construction is taking place.

Specific Considerations for Condominium Projects

Post-construction, condominiums present some additional challenges since claims can come from the original developer, individual unit owners and/or from owners’ associations. Risk mitigation should be considered during construction, as discussed above, and in the transactional stage of the project. Contractors should consider requiring developers, in their contract documents, to include mold disclosures and waivers in the condominium association’s governing documents and sales documents, including requiring unit owners and property managers to monitor their units and the building for the presence of moisture and take prompt action to eliminate moisture sources. A contractor’s direct liability to individual unit owners and home owners’ associations and its ability to limit or exclude mold liability and mold damages in its construction contract or warranty will vary by jurisdiction. Through consultation with an attorney, the contractor should consider liability limitations such as waivers of consequential damages, exclusions for mold or limitations on the contractor’s obligations for mold-related repairs.

Because mold can grow quickly, it is crucial to promptly respond to a mold claim. In consultation with a lawyer, the contractor should evaluate whether the mold claim is viable or is time-barred by statute. Even if a limitations period or warranty period is expired, under certain circumstances a prompt inspection employing qualified experts may be advisable. Inspection can serve multiple purposes, such as allowing the contractor to document the condition of the unit or building before the damage worsens and giving the contractor the opportunity to evaluate whether to make an offer to repair and remediate. In some cases, a repair after warranty expiration may be more economical than denying the claim and facing a legal dispute. The builder should also consider bringing to the inspection the subcontractors who may be responsible for the moisture intrusion and tendering the claim to the subcontractors and their insurers for defense and indemnity, if applicable. 

Some jurisdictions have notice and right-to-repair statutes that apply to unit owners and/or condominium owners associations which obligate claimants to provide pre-suit notice of claimed defects to the contractor and permit the contractor to make a repair or settlement offer. These statutes usually have detailed processes and requirements; navigating them properly warrants consultation with a qualified attorney. 

Basic Rules of Thumb to Manage Risks of Water Damage and Mold Growth During Construction

There are several basic rules of thumb to manage risks of water damage and mold growth during construction:

  • prepare a project-specific water controls and response plan to minimize risks of water intrusion (some insurers are requiring these plans as a component of the insurance application);
  • train supervisory and in-house safety staff in response techniques to minor water events and/or de minimis mold growth;
  • phase the work to avoid installing finishes and other building materials before the building or phase is “dried in”;
  • store lumber, drywall, paper backed insulation and other cellulose or organic building materials in dry areas and cover against weather events (do not install moist or damp materials and installed lumber should be allowed to dry);
  • inspect the envelope to verify vapor barriers, seals and proper envelope and window assembly installation; 
  • inspect HVAC equipment and duct work during installation and endeavor to clean and keep dust-free. Protect open ductwork during installation from construction dust and miscellaneous debris. Inspect and clean, if required, during commissioning;
  • phase the HVAC installation to control humidity (in some humid regions sophisticated contractors are shrouding the building and utilizing temporary equipment to maintain lower temperature and humidity levels during construction. Some contractors report that the costs of these controls have been offset by the productivity of workers and ability to install drywall more rapidly);
  • prepare for a water event by having resources in place, including an experienced consultant and drying/restoration contractor (licensed if required in the jurisdiction). Consulting firms should be supervised by a Certified Industrial Hygienist with experience in construction, water/moisture control and mold growth;
  • review insurance coverage regarding mold and water damage coverage and be familiar with applicable notification requirements;
  • know the jurisdiction’s mold-related legal and regulatory requirements, if any; and
  • do not delay in responding to a water event of any kind.

While the construction industry has been addressing mold issues for years, the applicable regulatory landscape, professional guidelines, standard of care and best practices continue to evolve. Understanding the basics of how mold may affect a project during construction or post-turnover, and having a plan and resources in place to deal with these anticipatable risks, are the keys to avoiding issues that could lead to claims and litigation and to effectively addressing them when they do arise. 

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