BHR NEWSLETTER
Fall 2002 Issue
The High Cost of Mold...
And What To Do About It
By William Rodarmor
Mold is a dirty word to homeowners and their insurers these days. As widely reported in the media, claims for damage and illness caused by mold in houses have skyrocketed — especially in Florida, Texas, and California — and a number of insurers have raised their rates or gotten out of the homeowner’s insurance business entirely.
Under current California law, sellers of one to four residential units must disclose to buyers if they have actual knowledge of mold problems. Fortunately, smart homeowners can take a number of steps to keep their houses free of mold.
The Inside Dirt on Mold
Molds are microscopic fungi whose spores are found on surfaces and crevices such as drywall and ceiling panels. Over 100,000 kinds of mold exist, and most are harmless. But a very few contain mycotoxins, which are highly toxic to both humans and animals. Symptoms usually resemble those of flu or hay fever — itchy eyes and cough — but can include respiratory distress and nerve damage.
Problems with mold have always been around, but energy-efficient building techniques have made them worse. Homes are now more airtight, so when they get wet, they don’t dry out. Water remains trapped inside much longer, which allows mold spores to grow.
In homes, mold is most often found in places where water accumulates, like bathrooms and basements. The biggest problems arise with water damage, such as a toilet or a pipe inside a wall leaking and soaking the surrounding building materials.
A Rash of Claims
Insurers are running scared because of rising repair costs and a few large jury awards for mold-related illnesses. Suits by such high-profile mold victims as Ed McMahon and Erin Brockovich have kept the problem in the headlines.
Most California insurers cover mold cleanup if it’s part of a claim for sudden and accidental water damage, such as a pipe bursting. They exclude it if it’s not part of a water damage claim, such as mold that has grown over years.
Farmers Insurance, the state’s second largest insurer, is getting 800 claims a month, up from 200 earlier in the year. Allstate, the third largest, in January capped the amount it will pay for mold cleanup at $5,000, even if it’s part of a water-damage claim. In April, State Farm decided to stop writing new homeowner policies, partly because of rising mold-related claims.
The State of the Market
Stock market gyrations have helped boost real estate prices in California and the East Bay, as people move money into what they feel is a safer, more tangible investment. In July the median price of an existing single-family detached home state-wide was $323,700. This is a 21 percent increase over the $267,520 median price for July 2001. During the period from May 1, 2001 to April 30, 2002, the median sale price of a single-family residence sold by Berkeley Hills Realty was $544,234. The lowest sale price was $175,000 and the highest was $2,250,000. Forty percent of the sales were in Berkeley, with the other 60 percent spread out from Moraga to Pinole. This is a wonderful time to refinance your property, as rates haven’t been this low since the early 1960s.
The History Page
The following items were culled from the pages of the Berkeley Gazette and reprinted in Richard Schwartz’s wonderful book, Berkeley 1900.
Escape Down Alcatraz
On August 24, 1905, the Gazette reported on a group of steers that ran amuck as they were being herded down Alcatraz Avenue: “The stampeding steers were not corralled and controlled for some time... The property owners are considerably worked up about the frequent capers cut by these animals and will ask to have them driven down some other street.”
Real Estate at the Turn of the Century
From a Gazette ad for a development near the Rose Garden: “It is only two short blocks from Berryman Station. The Oakland Electric Railroad has extended its line right to the property. Two-thirds of the tract front on streets already graded, sewered, and macadamized; and though so high there are no steep hills to climb.”
William Rodarmor is a freelance writer, editor, and French translator in Berkeley, California.
