The Future of Mold Testing: Opinions from Industry

NADCA Meeting Unveils Long-Term Strategic Plan

Tips to Reduce Builder Liability for Defect Claims

Voices

“This is so overblown. A kid dropped a thermometer. We all played with mercury as kids, and we didn’t die. ... We have peeling paint in all the schools, and it’s full of lead. It would be nice if peeling paint and other issues got as much attention as this stupid thermometer issue.”

— Julie Koczela, co-chairman of an advisory group of parents and staff of Hardy Middle School in Washington, D.C., quoted in a Washington Post article that reported the school’s one-day closure in March due to a single mercury thermometer breakage was probably unnecessary; the decision to close the school was influenced by the closure of another D.C. public school building for part of February and most of March after three nationally publicized mercury incidents there

Word on the Street 

KNOCK, KNOCK
The U.S. Department of Housing and Urban Development will pair up with the Environmental Protection Agency’s Office of Research and Development later this year to conduct a survey of a random sampling of 1,000 American homes, announced Peter Ashley of HUD’s Office of Healthy Homes and Lead Hazard Control in February at the
quarterly meeting of the Federal Interagency Committee on Indoor Air Quality. He said this survey would be similar to the one HUD conducted in 2002 with the National Institute of Environmental Sciences but larger in scope and sample size. The previous project, which HUD conducted with the National Institute of Environmental Health Sciences, collected lead measurements in paint as well as dust and soil samples.

RING, RING
More than half the respondents in a national survey expressed concern about mold in the home, and 65 percent said health risks were the largest specific concern related to mold. The survey of 1,040 adults nationwide was conducted by telephone over four days in February by Opinion Research Corporation, and results were released last month by CertainTeed Corporation, manufacturer of vinyl and fiber products. Among other findings of the survey was that 84 percent of respondents said they would not buy an existing home that had a mold problem or buy from a builder who had a mold problem in the past. Asked what they would do after discovering mold at home, 56 percent said they’d hire a mold remediator, 34 percent said they would try to clean it up themselves, and 5 percent said they would move. Respondents were also asked to say whether they would take legal action against builders, previous owners, or landlords; 46 percent said they would not sue, and 8 percent said they don’t know what they would do. Asked to identify the most common cause of mold in the home, only 3 percent had no answer. For more survey results, visit www.certainteed.com.

MOLD UNIVERSITY ADDS EXPERTISE
“After more than two decades in the IAQ industry, I am happy to be joining a team that shares my passion for excellence and rigorously accurate mycology,” said Dr. John Shane upon the announcement that he would head Environmental Microbiology Laboratory Inc.’s team for the Midwest region. Shane is widely recognized for his work over the past 10 years in training over 3,000 analysts as professor and director of research of the McCrone Research Institute in Chicago. Shane will continue to work out of Chicago, where he will play a major role in offering EMLab clients in the Midwest high-end technical support. He will also join EMLab’s “Mold University” faculty, alongside David Gallup, Dr. Harriet Burge and Dr. Payam Fallah, to offer IAQ professionals with advanced training. Shane is renowned for his instruction in the field of spore-trap analysis for environmental particles and mold. “I look forward to the challenges of this new chapter in my career,” he said.

RUG RECYCLING
“No carpet will go to a landfill,” promises Invista, manufacturer of the Antron brand of commercial carpet fiber, which last month announced the expansion of its program to recycle used carpet. Its carpet reclamation program, which was first initiated in 1991, “is now open to everyone... facility managers, building owners, dealers,” the company says. “Reclamation is an easy process that takes your worn carpet and transforms it into something usable again,” explains Invista. “Since opening in 1991, more than 100 million pounds of used carpet resulting in more than 400,000 cubic yards of conserved landfill space have been diverted from landfills.” For more information on how to participate in the program, call (877) 5-ANTRON or visit www.antron.invista.com and click on “Sustainability.”

GOIN’ GLOBAL
The Association of Specialists in Cleaning and Restoration has elected its first-ever international president. William J. Lakin, who serves as technical director of a fire- and water-damage cleaning and restoration company based in England, becomes the first member from outside the United States to head ASCR in its 60-year history. As a certified restorer, Lakin brings a wealth of ASCR and restoration-industry experience to his new role. An ASCR member since 1978, he previously served as ASCR vice president and chairman of the ASCR Foundation. Prior to that, he chaired the National Institute of Disaster Restoration, which was a division of the association. Joining him as members of the ASCR Executive Committee for 2005 are Vice President Brian N. Spiegel of Spiegel Certified Restoration Inc., Secretary Graham H. Dick of Genesis Restorations Ltd., and Treasurer James L. Pearson of Americlean Corporation Inc.

BEAM ME UP, ASHRAE
This month, the American Society of Heating, Refrigeration and Air-Conditioning Engineers will present a satellite broadcast on minimizing mold through moisture and humidity control. Sponsored by ASHRAE’s Chapter Technology Transfer Committee, the three-hour broadcast on April 13 will include presentations from four engineers, one attorney and one microbiologist, plus opening and closing remarks from ASHRAE President Ron Vallort. Engineers slated to give presentations include Ron Bailey of Bailey Engineering Corporation, Wane Baker of Michaels Engineering Inc., Raymond Patenaude of the Holmes Agency Inc., and George Tsongas, professor emeritus at Portland State University in Oregon. For a look at legal and other technical facets of the broad mold issue, joining the engineers will be attorney Christopher McDonald and University of Nevada-Las Vegas microbiology director Linda D. Stetzenbach. Those interested in viewing the broadcast may register to attend at a number of sites located across the country. Alternately, ASHRAE is accepting registrants to view the broadcast online. For more information, visit www.ashrae.org  or call (404) 636-8400.
 

The Future of Mold Testing: Opinions from Industry
By Carl Grimes
President
Healthy Habitats
Denver, Colo.
 

Why do you test for mold?

Forget for a moment which type of sampling and analysis you prefer. Set aside the arguments about the strengths and weaknesses of each. Those issues are all about the “how” of testing and implicitly assume that you should test.

Think instead, just for a moment, about what you want the results to give you. What will they mean to you, your client, the insurance adjustor and/or the various lawyers?

The internationally composed Steering Committee of last November’s Advanced Perspectives in Mold Prevention & Control symposium in Las Vegas addressed, among other issues, the vagaries of mold testing. One theme that emerged was that accurate, dependable testing in an analytical sense is so complex and expensive as to be untenable outside of the research lab. A suggested replacement for the field was some form of a cleanliness standard.

An “enthusiastic debate” occurred on the IEQuality discussion board between the various factions. Steve Temes and Bob Brandys were the main advocates against a cleanliness standard. Temes believes it isn’t attainable at all, and Brandys believes it isn’t needed because there is enough current information to set analytical standards. Symposium co-sponsor Richard Shaughnessy placed an exclamation point at the end of the discussion with the following post, on Nov. 14:

“It would be impossible to present all of the discussion here. In no way did the Steering Committee summarily dismiss the use of sampling after remediation. However, due to the costs involved, number of samples needed for statistical certainty and the inherent problems with sampling to discern whether or not an area has been properly remediated, there was a general interest in consideration of a ‘cleaning-type spec’ as opposed to sampling alone. The amount of dust per area could be used as a measure of cleaning effectiveness, and could be collected inexpensively (filter cassettes) and determined by gravimetric analysis. Phil Morey presented information which indicates from his work that this direction may be equally or more effective in determining close out acceptability.”

Brad Prezant, a member of the Steering Committee familiar with Morey’s work, sent an e-mail with the following response:

While we are aware that many qualified and experienced IHs use exclusively air testing for close-out (clearance) sampling, for about five years we have used settled dust gravimetric sampling (100 mg/m2, as referenced in AIHA Microbial Growth Task Force Report and NADCA) as an indicator of the contractor’s compliance with cleaning requirements. (We often also follow up with air testing at a later date.) We like this approach because:

• If you clean the dirt, you remove the mold particulate [by definition]
• It is an understandable measurement to the contractor and takes away the black hole sense they may have about interpreting unpronounceable Genus species organisms.
• It is very quick turnaround in our in-house laboratory, resulting in little “down time” for the contractor’s personnel [in contrast with culture-based testing, which can take a week and cost the contractor $ due to down time].
• This straightforward performance testing increases the level of trust at the beginning of the project making the project more predictable for them and resulting in smaller contingency $ in the contractor’s bid, and therefore cheaper for the client.
• It gets away from the irrational interpretation that we are requiring the area to be sterile, and places mold particulate in a rational context.

I recently queried a variety of people, from researchers to field practitioners. Following are representative statements from just a few of those who responded. Pretend you are a fly on the wall as you peruse the following.

Bob Baker, president of the Indoor Air Quality Association and who has longtime involvement with the National Air Duct Cleaners Association, has reiterated the value of the NADCA ACR 2002 (now ACR 2005) vacuum test for cleanliness mentioned above by Prezant. He followed that with a recounting of a memorable project in the early 1990s at the Sun City Florida retirement center. Among the many tasks performed was sampling for mold and bacteria. “There was virtually no correlation between fungal data and complaints,” Baker reported, “and there was a fair correlation with bacteria. However, the most compelling correlation was not shown by any of the lab data: Simply stated, cleaning removed the complaints.”

Tom Yacobellis, a past president of IAQA and an active NADCA supporter, confirmed Baker’s and Prezant’s statements on the NADCA cleanliness test. But he very quickly added this warning: “My involvement with the state legislatures that have passed or are in the process of passing mold legislation is that they absolutely insist on specific numbers. Rightly or wrongly, they want – and they will get – numbers.”

David Bell of Environmental Microbiology Laboratory gave encouraging support for semi-quantitative testing. “Semi-quantitative methods have been used very effectively in many fields, in combination with subjective and quantitative methods. Selection of college applicants, automotive insurance adjustment and stock picking are good examples. ... Semi-quantitative methods have their place, but they are not the whole story, especially in situations in which (provable) objectivity and traceability are important.”

Bell continues: “Bottom line: I think that improving semi-quantitative methods would be a huge benefit to the industry, but I don’t think that they would replace testing. They would mainly serve to improve the uniformity and quality of inspections, and also improve sampling strategy.”

His colleague, Harriet Burge, familiar to readers of this paper through her monthly column, offered a more circumspect response: “There are no simplistic answers in this field. There is a place for visual observation followed by direct recommendations for remediation. There is also a place for visual observation followed by strategic sampling before recommendations for remediation are made. I agree that much sampling that is done is wasted money. However, properly designed sampling strategies that test specific hypotheses can be extremely valuable in environmental investigations. I have been involved in many investigations where a simple ‘cleanliness’ standard would not have solved the problem.”

David Fetveit of Aerotech P&K Laboratories said he feels a cleanliness standard would help to clarify what and when sampling is appropriate. He emphasized that the meaning of the data based upon a process that has a specific purpose and is reproducible is more important than any new technology.

Chin Yang, also with Aerotech P&K, agrees with Fetveit’s comments that these are limitations and a widespread abuse of testing. Despite that, however, he insists accurate characterization is not only scientifically possible but also affordable by using the relatively new technology of PCR with extended sample times. “PCR is more expensive at a per-sample rate,” he said. “But one six-hour PCR, for example, would replace 50 or more spore trap samples. ... The important part of sampling is accurate characterization before remediation begins. Only then can you find the markers necessary for confirming clearance. But of course, the education and skill of the one developing and executing the sampling plan is critical.”

Henry Slack, of the U.S. EPA Region 4 Indoor Air Program, said in an e-mail: “You know EPA’s policy (found in ‘Mold Remediation in Schools and Commercial Buildings’) has never favored a lot of sampling. We acknowledge
that sampling may be considered as part of a site evaluation in specific instances. We also note that surface sampling may also be useful in order to determine if an area has been adequately cleaned or remediated.”

Slack continued: “We also recommend: ‘Sampling should be done only after developing a sampling plan that includes a confirmable theory regarding suspected mold sources and routes of exposure.’ And three paragraphs later: ‘If it is not possible to sample properly, with a sufficient number of samples to answer the question(s) posed, it would be preferable not to sample, Inadequate sample plans may generate misleading, confusing, and useless results.’”

An interesting observation was made by Jeff Charlton, managing director of Hazmat Response Ltd. in England. “We recognize that all mold is allergenic, so is speciation important? I don’t think so. Is clearance really clearance or simply a judgment call from the assessment of usually a limited amount of sampling? How many IHs would be prepared to open all case studies and projects to be second-guessed by peer review?”

Dr. Gene Cole, of Brigham Young University and the other co-sponsor of November’s symposium, offered a short, pithy response: “Regardless of the methodology preferred, it must be applied and executed by a professional.”

Jim Holland of Restoration Consultants was even more terse: “Too many in our industry, both in remediation and assessment, are way too comfortable with their self-deception.”

Jim White, a retired researcher formerly of the Canada Mortgage and Housing Corporation, adds a different dimension by including individuals who are sensitized: “None of the normal mold test procedures are likely to give a reasonable approximation of the actual exposure that occupants in general, and especially occupants in particular, will receive when in the tested building. This was a conclusion of the researchers in ‘The Wallaceburg Study: A Field Exposure and Health Study’ in the late ‘90s and still holds up.”

CMHC, his former employer, has been using a procedure for inspection and verification for over 10 years that does not rely on testing. Instead of laboratory numbers, all conclusions and determinations are based on a comprehensive combination of building-science investigation by professionals trained in assessment and communication, plus occupant complaint. According to Virginia Salares, IAQ program director: “Our position is that reliance on testing shows a lack of confidence in assessment.”

J. David Miller of Carleton University in Canada takes an even stronger position. In a recent phone conversation, he asked, “Which cognizant authority has authorized the use of testing to determine anything other than inspection diagnostics? Testing results are being used every day in the court room without benefit of any authority to do so.”

Peter Sierck, director of Environmental Testing & Technology Inc., simply said, “Reliance on testing is more like playing Russian roulette. Will I be lucky today?”

Finally, Melinda Ballard, whose celebrated mold case in Texas is often viewed as the beginning of the mold phenomenon, weighed in with this summation: “The primary failure occurs during the initial investigation. Remediators and consultants alike tend to under-investigate, stopping with the discovery of the first problem they find. This means they are frequently missing additional sources or even the correct source of exposure.”

Conclusion
What is not reflected in the direct words of the above respondents, plus another dozen or so, is several common themes.

The primary concern of the occupants is their complaint. But testing alone does not provide an assessment of their exposure.

There is a vast difference between the criteria for identifying and remediating mold growth issues for legal versus non-legal situations. Many of those who prefer not to sample feel that not doing so for a legal case will be judged as amateurish and proof of a lack of professionalism. So, they sample.

Those who favor a semi-quantitative or cleanliness standard agree that it is severely lacking in tools and a scientific foundation. They have expressed little confidence that the responsible experts are more likely to succeed with this than they have with health-based analytical methods.

Regardless of the tool used, the key is how the tool is used. Education is key, but it must be appropriate and scientifically valid.

When there is a lack of leadership from a cognizant authority, individuals tend to form their own belief systems. When faced with a challenge, they tend to defend their beliefs before they consider new information or methods.

Patrick Moffett, an experienced environmental and industrial hygienist, provided perhaps the best concluding statement with a question: “Where is the larger IEP and IH industry in setting standards and guidelines for non-occupational environments?”

Carl Grimes is president of Healthy Habitats LLC, an indoor environmental consulting firm in Denver, Colo. He is the author of the book “Starting Points for a Healthy Habitat” and serves on the Editorial Advisory Board of IE Connections and as vice president of the Indoor Air Quality Association. Grimes can be reached by e-mail at grimes@habitats.com or by phone at (303) 671-9653.
The U.S. Surgeon General, addressing a crowd of about 500 stakeholders representing many areas of health related to all aspects of indoor environments, indicated last month that he agrees more should be done at the federal level to communicate to the public the health hazards posed by poor indoor air quality.

A bold, new strategic plan for the National Air Duct Cleaners Association was unveiled before the more than 500 people assembled at the organization’s annual meeting last month in Las Vegas.

As explained by NADCA’s newly elected president, Bill Lundquist, the plan includes five major goals NADCA would strive to attain: to become the world’s leading source of information about HVAC cleaning standards and practices, to expand the association’s visibility and market share, to promote high quality services and ethical practices, to increase value of NADCA membership, and to strengthen the association’s infrastructure.

As current and past members of NADCA’s Board of Directors reviewed prior association accomplishments and future challenges, the controversy and acrimony many believed would dominate the meeting failed to materialize. Instead, the NADCA membership overwhelmingly approved bylaws amendments and new requirements that put to rest much of the controversy that had surrounded the organization in the months leading up to the meeting.

Leading Source of Information
Under the strategic plan, NADCA would aggressively promote the standard ACR 2005 to end users and other organizations with an interest in maintaining clean indoor environments, said Lundquist. NADCA would also rewrite its guideline “Introduction to HVAC System Cleaning.”
At an international forum held during the convention, several European, South American, Middle Eastern and Asian representatives discussed industry standards, guides and regulations for their part of the world. Among the elements of NADCA’s strategic plan, said Lundquist, is to continue to work with the international community to promote NADCA standards and practices globally.

Information for its own members is also key to the NADCA plan, the president added, indicating that the association would enhance training and education programs by offering online access. Lundquist said the association would develop a comprehensive library of all NADCA publications and programs and promote the availability of these products to the membership and public.

To ensure that NADCA is recognized as the leading source for HVAC cleaning information, Lundquist said the association would attempt to form strategic alliances with key organizations like the American Society of Heating, Refrigeration and Air-Conditioning Engineers, the Institute of Inspection, Cleaning and Restoration Certification, the Air Conditioning Contractors of America, and the Indoor Air Quality Association. He also said that a request to the U.S. Environmental Protection Agency to help the agency rewrite the government’s consumer guidelines for air-duct cleaning was met favorably.

Lundquist said that all of the new resources and information outlets NADCA creates would be tied together through a new Web site capable of accommodating the organization’s growing communication needs.

Expanding Visibility and Market Share
NADCA members have longed to see the day when membership and certification through the association were recognized credentials that the public would equate with quality cleaning services. To achieve that goal, Lundquist said NADCA would actively promote its standards, certifications and publications to the public through a variety of marketing methods. He also said NADCA would seek endorsement from the EPA of its programs and activities.

To build awareness in the commercial cleaning market, NADCA announced it would work with the Construction Specifications Institute on developing specifications for the new CSI facility-maintenance division.

NADCA is exploring cooperative advertising programs for radio and television whereby members competing in a common market would pool resources for advertising that would benefit all members in the area, he said. In addition, Lundquist said NADCA would “develop new materials and press releases that members can use for residential marketing,” articulating the benefits of HVAC cleaning in connection with energy savings, and other new messages.

Promoting Quality and Ethics from Within
Coming into the meeting, one of the complaints heard from members was that the quality of work performed by NADCA members was not up to standards. Directly responding to resolve the job-quality issues identified at last year’s meeting, the association announced several initiatives, the first of which sees NADCA actively promoting compliance with its standards to members and to the public.

Lundquist said NADCA is already developing a quality-assurance program that is set to be implemented within 12 months. This program would include a mechanism to allow for customer feedback, as well as policies that better allow NADCA to enforce its standards among members, he said.

Coil cleaning was a specific point of contention last year among NADCA members with concerns over job quality. A survey revealed last May that some members do not routinely clean coils as part of their service. Lundquist announced the association would begin to require a policy of “disclosure” at time of sale whereby members who do not clean coils would be required to advise their clients. NADCA would also create guidelines to inform the public about what to expect from an association-certified cleaning contractor.

NADCA does seek to promote coil cleaning as a standard part of the process, Lundquist said, and toward that end, he added that the organization would develop guidelines and training programs for coil cleaning.

Building a Stronger Association
Chief among the new strategic plan, and indeed key to accomplishing the plan’s objectives, is building a stronger infrastructure within NADCA. Last year, NADCA conducted an in-depth member survey regarding many aspects of the association’s programs, and Lundquist said the organization would respond to comments and concerns the survey identified and use that information throughout the implementation of the plan.He said NADCA would expand training and education opportunities by leveraging technology and Web-based delivery, as part of a larger plan to improve communications with members. “NADCA has to follow the strategic plan and monitor progress, ensuring that the mission is achieved,” Lundquist said. He also remarked that NADCA would assess its core values and member benefits, updating and improving them as necessary.

Fulfilling the strategic plan would require NADCA to increase its resources, Lundquist stated, announcing that the association would increase its staff, work to boost revenue by 30 percent, increase membership, improve membership retention, and increase volunteerism. Those items, he remarked, would be critical to implementing the strategic plan.

In the area of staffing, Management Search Committee Chairman Brad Kuhlman said that the service and affordability offered by NADCA’s current management firm, Sufka & Associates, meets or exceeds four other proposals the organization received. Kuhlman said this determination was made after a thorough search for potential new management companies.

Last year, the association had asked nine companies to bid on managing NADCA’s operations. IE Communications, publisher of this newspaper, was among the five firms that declined the opportunity to bid.

Bylaws Amendments Approved, Conflict of Interest Question Resolved
In the months leading up to the NADCA meeting, a few vocal members threatened to present the association with a petition to remove certain officers of the association. These members alleged that the officers sold equipment to industry contractors, which was not permitted in the NADCA bylaws.

Representing NADCA at the meeting, attorney James Anderson explained that from a legal standpoint, the bylaws’ language was ambiguous and subject to a variety of interpretations. In conjunction with the association’s Bylaws Committee, Anderson reviewed a set of proposed bylaws amendments that would clean up or remove the confusing statutes.

All of these amendments were overwhelmingly approved, making it clear that a NADCA director who is a contractor and also an equipment dealer or manufacturer may serve as a director of the association.

Construction defect claims, particularly for mold, have plagued the construction and insurance industries for many years now. Despite improvements in design, materials and construction techniques, even the best builders are sued for construction defect and mold claims. Construction defect claims are universally costly, even if frivolous. Litigation distracts builders from their business, is expensive to defend, and can ruin a company’s reputation – even if the builder wins. What can builders do to prevent these claims?

Here are the top 10 tips that a builder can use to reduce the risk of claims for construction defects for mold.

1. Plan for moisture and its control: Virtually everything and everyone can contribute
to a building’s moisture problem: design, building materials, construction techniques, building operation, maintenance, and even landscaping. To limit potential liability, builders should anticipate the need for moisture control in all aspects of their work and take steps to reduce moisture problems, occupant complaints, and liability.

But be careful. The process of planning for moisture control can get a contractor into trouble right from the beginning. What if the builder identifies a design problem in either the building envelope or the HVAC system? By being vigilant and proposing alternative designs, the builder could increase its liability rather than decrease it! How? Liability increases when a builder takes on the role of an expert in an area outside the builder’s expertise. Builders should avoid treading on the territory of others. This is not to suggest that a builder should “look the other way” in the face of a looming moisture control problem that might have slipped past an architect or HVAC engineer. Rather, the process of proposing alternative designs needs to be handled in a manner that is respectful of each participant’s role. An appropriate suggestion, when properly communicated to a designer and documented, can serve to protect a builder from later problems. The same design modification, if implemented by the builder on its own, could enhance that builder’s liability. Understand the ramifications of not only your proposed changes but the manner in which the proposals are made.

2. Improve the documentation the owner receives: Builders can reduce liability by improving the operations and maintenance information they provide to customers. Include some discussion on how to prevent moisture problems and how to deal with them when they arise. Instruct the owner to conduct periodic inspections. A property owner who fails to follow a builder’s clear instructions will have a difficult time convincing a jury that the builder should be held liable for any related harm.

In commercial and industrial buildings, the current state of the art incorporates computerized maintenance management systems into the building’s information technology systems. Rather than delivering a box or bookcase full of three-ring binders that contain the building ‘s operation and maintenance information, a computerized maintenance management system identifies the steps that need to be taken and enhances the likelihood that the owner or property manager will actually operate the facility in a safe and efficient manner. (For further information, see my article in the May 2004 issue of Engineered Systems, “Legal and Business Opportunities for CMMS-Ready Facilities.”)

3. Depend on arbitration provisions: Construction projects seem to invite disputes. Construction litigation is a no-win situation. Include clauses in your contracts that make arbitration mandatory and binding. Note that courts tend to scrutinize these arbitration clauses quite closely. Thus, don’t go overboard. Make the arbitration clause fair to both sides so that a court will enforce it. For example, if your arbitration clause addresses how the arbitrator will be selected, give both sides a say in the selection process. The resolution of a construction defect or mold claim by binding arbitration will be cheaper and quicker, yet no less fair.

4. Strengthen warranties: A warranty is simply an agreement, between the builder and the purchaser, which creates mutual duties. Take advantage of this opportunity to specify what the owner must do. Then, if the owner fails to comply with the warranty’s requirements (by ignoring the builder’s operation and maintenance directives, for example), the builder can argue that the owner’s actions voided the warranty.

Some large builders have taken warranties to a new level. They have created warranty departments which handle all customer complaints. Builders taking this approach have seen more warranty claims, but fewer lawsuits and lower overall costs.

5. Be careful in adopting new building components: In response to claims that building materials are contributing to moisture-related building problems, manufacturers are scrambling to develop new products. Yet time is often the best test for new building products. Builders should exercise caution in adopting new, but unproven, technology. Whenever a new product or technique enters the market, consider the data that supports that product’s or technique’s superiority. Consider the down side. Builders (and architects and others) need to be prepared to justify their decision to specify a new product or adopt a new technique.

Remember, making the right decision does not prove your case in a later court battle – documenting it does. Be certain that you can justify your decision years later.

6. Beware of class actions: Class action lawsuits, a legal mechanism for grouping individual claims, have garnered a lot of public attention. We have seen class actions related to building components including windows, paint, glazing, and flashing. What is the common lesson? Builders and manufacturers should be particularly careful when they make a lot of the same thing! Cutting a corner on a technique in a single custom-built home may be a reasonable gamble. Cutting that same corner a thousand times becomes a bad bet.

In a recent case, a homeowner filed a lawsuit on behalf of 2,000 owners of newly built homes. The lawsuit alleged that the builder improperly applied bricks, that moisture penetrated the bricks, and that the resulting mold damaged the homes. Late last year, the court approved a settlement that obligated the builder to perform an assessment of all the homes and to remediate all mold problems. The builder also agreed to pay the moving expenses of homeowners who, for medical reasons, could not be present during the remediation, and up to $2 million in attorneys’ fees.

7. Invest in worker training: No matter how good the design or how appropriate the building materials, improperly trained workers can doom a project. Although diligence in the hiring process is helpful, training helps assure that the end product is built and performs as anticipated. Training is particularly crucial as building techniques change over time. Because these changes can create potential hazards that are not obvious to the average construction worker, training becomes essential.

8. Audit worker performance: Despite the benefits of training, human error persists. Builders are now performing audits of the work as it is performed. Particularly at crucial stages of the construction process, audits are likely to not only identify problems but provide an incentive for better performance overall.

9. Listen and respond to customer complaints promptly: In addition to the administration necessary to coordinate the various contractors and move the construction process along, builders are implementing procedures for promptly handling customer complaints and warranty issues. Some builders have developed protocols that expedite the handling of mold and water intrusion claims by more senior staff. Customers who feel that their concerns are being addressed tend to be the ones least likely to file suit. Thus, builders have found that money spent promptly responding to customer complaints pays huge dividends in reducing overall costs.

Some builders have implemented risk management programs that contain a written moisture control protocol. These include an emergency program to respond to water damage complaints on a twenty-four hour a day, seven day a week schedule. These programs are readily established by entering into an emergency response agreement with a water-loss specialist.

On a related note, “notice and opportunity to repair” statutes have become popular. These have been passed in about twenty-five states and proposed in another seventeen. Though these statutes vary from state to state, they usually require that a homeowner notify the builder in writing about a claim ninety days before filing suit. The builder then has thirty days to respond in writing. The response must contain either a request for permission to inspect the property (to be followed by settlement or rejection of the claim), or an offer to repair the property or settle the claim without inspection.

10. Upgrade your insurance program: When all other efforts to eliminate liability
fail, insurance is the last resort. Insurance covering mold has become difficult and expensive to obtain. Recently, however, some insurers are starting to make mold coverage available, even to residential home builders. This coverage is often contingent on the builder implementing written protocols and employee training programs concerning moisture control. Some insurers even supply third-party training in this area. Coverage for commercial builders is also on the rise. More insurance carriers are entering the market, which has increased competition and slightly decreased premiums.

Particularly for larger builders, sophisticated insurance schemes abound. For example, some large builders insure through a combination of self-insured retention, or SIR, and excess coverage. Through this technique, the builder places a limit on any given loss. If a loss occurs, the builder covers the expense of defending and paying the claim up to its pre-determined retention amount, and the carrier pays any additional cost up to the policy limit.

Other builders insure larger projects through the use of “wrap-up” policies (sometimes called owner-controlled insurance programs, or OCIPs). As sub-contracts are awarded, the names of the subcontractors are added to the wrap-up policy as insureds. This type of policy generally includes worker’s compensation insurance, employer’s liability, CGL coverage, and an excess umbrella policy. It can also include a builder’s risk policy, liability coverage for design professionals, and even environmental liability policies. During the past few years, policies have been bundled by some insurance carriers to provide professional and pollution coverage.

Protect Yourself at All Times
As in any construction project, planning to reduce builders’ liability for construction defect and mold claims starts from the foundation up. Although being “on the look out” for moisture-related liability adds another layer of complexity to an already complex process, the dividends that follow from avoiding such liability are tremendous. Whether it is the installation of a simple flood alarm in a basement or the negotiation of a complex insurance package, builders who ignore the top 10 tips for avoiding claims invite the potentially devastating effects of a construction defect lawsuit for mold.

Yet proper planning to reduce the likelihood of a mold-related claim can be quite simple.

• Pay attention to the basic principles of building science.

• Understand and enhance the relationships among not only the contractors but also between the builder and the owner.

• Have an emergency plan in place to respond to water losses immediately.

With these basic protective approaches, builders can minimize their risks of a lawsuit
and maximize their chances of financial success.

David M. Governo has over 20 years of experience in helping clients prevent and resolve indoor air quality problems. His firm advocates for individuals and companies in local and national litigation and counsels them in business planning, such as risk management and regulatory compliance. Governo can be reached by e-mail at dgoverno@governo.com or by phone at (617) 737-9047.