In cyberspace, there is a wealth of information available about mold. You could read hours’ worth of studies on how mycotoxins affect the immune system, exacerbate allergies and the like, but what information is most important for you as a real estate investor to know? Let’s discuss the basics of what encourages mold growth and what you can do to stop it dead in its tracks.

Mold 101: The Who, What, When, Where and Why

Molds are fungi that can be found both indoors and out. Outdoors, molds play an important part in the “circle of life” by breaking down dead organic matter such as plants, fallen leaves and dead trees. Mold that grows indoors can be a potential hazard to the occupants of the home if left untreated. According to the Pohs Institute, one of the oldest and largest insurance schools in New York, of the hundreds of thousands of species of fungi, more than 270 species of mold can be found in homes.

Molds need two main things to grow: moisture and “food.” Though they do not grow in dry conditions, their spores can still lie dormant until the right environment exists: oxygen-rich environments with either standing liquids or humidity over 70 percent, according to Pohs. Unless a colony runs out of food, it will continue to spread. Mold tends to thrive in dark interior spaces, growing on surfaces such as wood, paper, carpet and food. It is most often found in poorly ventilated areas such as basements, attics, garages and bathrooms.

Common activities can produce humidity in a home. Breathing and perspiration both in humans and pets produce moisture, as do routine household activities.

According to the Pohs Institute, mold growth is dependent upon the following:

  • The time spent wet – the longer a material stays wet, the higher the likelihood of mold development
  • Water source contamination – microbiological activity is directly related to the amount of water involved
  • Substrate – natural materials usually support fungi growth best, but some fungi will grow on virtually anything
  • Light – most molds thrive in dark places like closets, attics, inside walls, behind wallpaper and refrigerators
  • Temperature – optimal mold growth occurs within a temperature range of 68 and 86 degrees
  • Air velocity –stagnant areas with little ventilation support microbiological activity
  • Nutrients – homes that are not well-kept and have more dust and debris are more susceptible to mold growth
  • Humidity – anything above 50 percent relative humidity will support mold growth
  • Moisture – moisture content of 18 percent or greater will cause mold growth

Health Issues and Other Pitfalls Caused by Molds

There are more than 100,000 species of molds, and about three dozen of those cause health problems in humans, Pohs found. Susceptibility to molds varies among the population, but exposure to mold and mold spores can cause symptoms ranging from allergic symptoms (runny noses, itchy eyes, sneezing, rashes) to more severe responses like asthma attacks and respiratory infections. Some toxic molds can suppress the immune system, damage the intestines or cause blood vessels in the skin or lungs to rupture. Pohs stated that in extreme cases, they may even increase susceptibility to cancer. If someone shows signs of memory loss and difficulty in thinking, the person’s home, office and other living and working space should be tested for the presence of toxic mold and other unhealthy molds.

No federal or state environmental laws require a building to be mold-free; however, state laws often require landlords to provide habitable housing to tenants. If a landlord does not remediate a mold problem after written notice from his or her tenant, that tenant may have a legal claim against the landlord for compromising his or her health and damaging his or her personal possessions. A variety of expenses can build up when a person becomes ill from a potential case of toxic mold. Mold cases can be complicated and expensive to try, and often the remediation costs are high as well. Not to mention the time a property may go vacant because it is uninhabitable for renters. Lost time, impaired cash flow and repair expense can all come into play when you are dealing with mold.

Is Mold Damage Covered by Insurance?

The majority of policies in the market are written on standardized forms produced by the Insurance Services Office (ISO). Many ISO policies have an “absolute pollution exclusion.” Some courts treat mold as a “pollutant,” thereby excluding coverage for mold-related claims. Other policies may contain an absolute microorganism exclusion that “does not insure any loss, damage, claim, cost, expense or another sum directly or indirectly arising out of or relating to: mold, mildew, fungus, spores or other microorganisms of any type, nature or description including but not limited to any substance whose presence poses an actual or potential threat to human health.” Nor is there usually coverage for repairs or remediation for mold or other microbiological organisms.

So, to sum it up, mold is usually not a covered peril. If you don’t want to pay for mold damage or any health issues that arise from mold, it’s best to make sure it doesn’t grow in the first place!

Tips for Preventing Mold Growth in Your Properties

Remember, controlling moisture is the key to stopping mold growth! Here are some tips that can help reduce moisture, humidity and condensation in your property.

For You, the Property Owner or Manager:

  • Clean and repair gutters regularly.
  • Make sure water runs away from your foundation to help prevent a moldy basement or crawlspace.
  • Maintain and clean AC and HVAC systems on a regular basis.
  • Keep indoor humidity low – ideally 40 percent to 50 percent relative humidity, which can be measured with a moisture or humidity meter available at your local hardware store.
  • Vent appliances that produce moisture (clothes dryers, stoves, bathroom fans) to the outside.
  • Install dehumidifiers where needed, and put them to use especially during more humid months.
  • Add mold inhibitors to paints before application.
  • Do not install carpet in bathrooms and basements.
  • Fix any leaks promptly.

For Your Tenants:

  • Be sure tenants know to contact you immediately if they discover a water leak.
  • Inform tenants about mold-producing conditions such as steamy showers.
  • Run the bathroom fan at least one hour after every bath or shower, and the kitchen fan while cooking.
  • Open the windows on nice days to ventilate the house or apartment.
  • Keep beds, couches and chairs away from walls.Do not over-pack storage areas such as closets, cabinets or the attic.
  • Give them the EPA’s “Brief Guide to Mold, Moisture and Your Home” – a quick read that will help them with the basics of mold prevention.

A Pipe Bursts at Your Property – Now What?!

When a property has experienced flooding, mold growth or other types of microbial contamination can begin in as little as 24 to 48 hours. You will need to act quickly to get things as dry as possible, as soon as possible. In addition to shutting the water off at the source or street, you may need squeegees or fans. Or if the job is a large one, you may need to call a water mitigation specialist. Make sure you have such a vendor selected NOW so you aren’t frantically scouring Google as water gushes through your property!

You also need to contact your insurance carrier reasonably quickly. Your carrier may have resources to help you minimize your loss, and you don’t want to open yourself up for a claim denial because you didn’t file something in a timely enough fashion. For some carriers, the window for reporting a loss after you have discovered it can be as little as 60 days – always be familiar with the terms of your policy. Your agent should be happy to answer any questions you have about your responsibilities.

Can I remove mold myself, or do I need a professional to help me do a proper cleanup?

According to the EPA, the proper party for mold cleanup depends upon how big the job is. If the moldy area is less than 10 square feet, in most cases you may be able to handle the job yourself:

  • It is not recommended to use bleach as that can actually exacerbate the mold growth on the opposite side of the material.
  • First, fix the source of the leak or other water problem.
  • Seal off other areas of the house before you start work so that any mold spores do not spread to other areas.
  • Scrub mold off hard surfaces with detergent and water and dry them completely. Absorbent or porous materials such as ceiling tiles or carpet may have to be thrown away if they become moldy.
  • For the purposes of insurance, you may need to set these outside until the adjuster has had an opportunity to examine them.
  • Avoid exposing yourself or others to mold – wear gloves and goggles, and use an N-95 respirator.
  • Do not paint or caulk moldy surfaces – clean and dry them thoroughly before painting.
  • If you suspect the HVAC system has been compromised by mold, do not run it, as it could spread mold throughout the entire building.
  • If you are unsure about how to clean an item, consult a specialist.
  • Find more tips in the EPA’s “Mold, Moisture, and Your Home” guide.

Insider Tip: Mold remediation expert Terry Amerine of Green Home Solutions says, “Removing affected materials is actually when we often see the introduction of higher levels of mold and more hazardous types of mold. The problem is they are often much more concentrated behind the wall, and when you remove the material without proper air containment, you introduce them into the air and the living area of the home or apartment.” If you are unsure about your ability to handle a water cleanup, call the pros instead.

Categories | Article | Funding | Operations
  • BreAnn Stephenson

    BreAnn Stephenson is assistant vice president of Affinity Loss Prevention Services. Contact her at

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