Search Site
Menu
Builders And Insurers Are Placing "Mold Clauses"

June 24, 2004

Builders And Insurers Are Placing “Mold Clauses” In Their Contracts

By Stuart Lieberman, Esq
Realty Times

Mold claims can be very costly. Property damage claims relating to mold have, in a few cases, exceeded one million dollars. And personal injury claims can be costly as well. In response to this, corporate America has been busy looking for ways to escape mold related liability.

For example, builders are trying to protect themselves from mold claims by placing mold exclusions in their contracts. Recently I saw a contract from a home seller that disclaimed any liability to the buyer caused by or relating to mold growth.

Your real estate lawyer needs to be watchful for these clauses and must ensure that you understand the risk if you sign an agreement with this exclusion. Personally, I think efforts to immunize builders in this manner are unconscionable.

Mold has been around longer than we have. But it has been a basis for legal liability for a relatively short period. For the most part, mold lawsuits have been around for only the last 10 years.

Mold requires a moisture source and darkness to grow. That being said, why should a builder need any special mold protection?

If the roof isn’t leaking, if the piping is sound, if the insulation is properly installed, in other words, if the home is well constructed, why safeguard against mold claims?

Why not simply build a better home? That’s a new thought. Eliminate the ongoing water sources. I would be concerned about a home being sold with a mold clause. Maybe the builder lacks confidence in his own ability or that of his subcontractors.

Insurance companies are now concerned about mold as well. What had seldom been a claim basis is turning into a carrier nightmare.

Some carriers are carving out mold claims from their basic policies. If you want that protection, you need to pay extra for it. And even then, it is restricted.

This can be a real problem. Often treating mold means knocking down walls and re-building. What will you do if you have this issue, but have no insurance coverage? People will soon find themselves in this situation.

Because homes are supposedly more energy efficient now than ever before, they tend to trap moisture and therefore, I am told, encourage mold growth. That may be one reason why mold complaints are on the rise.

Also, we are talking about it a lot more now. In the past it simply did not occur to homeowners, or for that matter their lawyers, that claims for mold damage could be filed. You are reading this column, for example. A few years ago no one would have written about this.

The cure is usually easy. Very often mold can be eliminated with bleach. You also need to ensure that moisture sources have been eliminated. Ventilation also helps. State and local health departments have a lot of information concerning simple mold abatement.

The bottom line is this: Home sellers and insurers are cleverly trying to avoid mold liability; read the contracts before you sign. And if they are bad contracts, see a lawyer and protect yourself.

Our Attorneys

Recent Twitter Posts

  • U.S. Supreme Court will hear PennEast Pipeline appeal of New Jersey eminent domain dispute. https://t.co/AqqvTw1QD2
    3 weeks ago
  • Fishing to be allowed in future wind farm off the coast of Atlantic City. https://t.co/x8vlsXFtcW
    1 month ago
  • New Jersey Economic Development Authority approves pilot program to replace diesel trucks with electric vehicles in… https://t.co/EZ5xkmDIjY
    1 month ago
  • New Jersey sues the Federal Government over PFAS contamination at military bases. https://t.co/f3BTcTmMJ8
    1 month ago

Recent Blog Posts

San Diego Receives Federal Funding to Fight Mexican Sewage

San Diego has just received substantial federal funding from the EPA to address a chronic problem: raw sewage coming from Tijuana Mexico. That sewage has been migrating over the border
Read More
San Diego Receives Federal Funding to Fight Mexican Sewage

New Jersey Supreme Court rules for NJ Transit in insurance claim for damages due to Superstorm Sandy

A New Jersey Supreme Court opinion issued on January 27, 2021 affirmed an Appellate Division decision in favor of NJ Transit over its insurers. In 2012, when Superstorm Sandy hit
Read More
New Jersey Supreme Court rules for NJ Transit in insurance claim for damages due to Superstorm Sandy

New York and New Jersey lawmakers make attempts to combat increasing recycling problem

New York and New Jersey have recently been making legislative efforts to find a solution to their share of the United States’ increasing recycling problem. In January 2018, China halted
Read More
New York and New Jersey lawmakers make attempts to combat increasing recycling problem

Lawsuit filed over Florida’s wetlands delegation

Several environment organizations have filed suit challenging the EPA’s relinquishment of control over wetlands in Florida. Many have criticized the manner in which Florida has historically regulated wetlands alleging that
Read More
Lawsuit filed over Florida’s wetlands delegation

In the media

  • Gulf Coast Town Center facing foreclosure

    Naples Daily News, September 16, 2015

    Wells Fargo filed a lawsuit Sept. 8 against an affiliate of CBL & Associates, the owners of the decadeold, 1.2 million-square-foot mall in south Fort Myers for a $190.9 million unpaid loan. The center has 94 stores on 204 acres, with such anchors as Super Target, Belk, Best Buy, Dick’s Sporting Goods, Marshalls and Costco...

    Read More
  • Town liable for private company's leaking underground tanks, court rules

    NJ.com Jul 26, 2017

    CRANFORD -- A couple that owned a businesses in town and became sick from leaking underground tanks owned by an adjacent business can sue the township for damages because the tanks were partially ...

    Read More
  • Dark Waters: How a Class Action Catapulted NJ to Forefront of 'Forever Chemicals' Battle

    NJ Law Journal Jan 09, 2020

    As property owners become increasingly aware of PFAS contamination, and as individuals exposed to PFAS learn of the health risks associated with exposure, liability will likely affect entire supply chains.

    Read More
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
Contact Our Firm

Quick Contact Form