Addressing the Mold Issue

By Carla Dane

Through widespread media coverage, mold became a hot topic for REALTORS® and property owners alike this year. Disclosure requirements and health risks were reassessed in light of this environmental concern, as uncertainty associated with mold contributed to a fear of possible illness and property loss.

Rising fear of mold contamination spurred the introduction of three bills during this legislative session. Early in the session, C.A.R. supported AB 284 (Jackson), Public Health, which focused on studying mold and fungus and its effects on humans. That bill passed the Legislature and was sent to Governor Gray Davis to be signed into law. The remaining two bills, AB 178 (Cox), Toxic Mold, and SB 732 (Ortiz), Toxic Mold, exposed REALTORS® to potential liability. AB 178 (Cox) would have imposed a civil penalty of up to $1,000 for anyone who knew or should have known that toxic mold was present in a property and didn’t disclose it; it also added mold contamination as a substandard building condition. This bill failed passage in April.

As originally introduced, SB 732 (Ortiz) contained similar language to AB 178, but it now requires the California Department of Health Services (DHS) to consider the feasibility of adopting permissible exposure limits to molds, and if determined to be feasible, DHS would then adopt exposure limits to mold for indoor environments to avoid adverse health effects. The bill requires anyone who sells, transfers, or rents commercial or industrial real property–as well as any public entity that owns, leases, or operates a building–and who knows that mold is present that affects the unit or building and that exceeds permissible exposure limits to provide written disclosure of the mold conditions to potential buyers and prospective tenants, renters, landlords, or occupants.

Similarly, residential rental property owners are subject to the same disclosure requirement if they have reasonable cause to believe that mold within the property surpasses permissible exposure limits. After working diligently to address C.A.R. opposition, the author agreed to remove language regarding substandard building conditions. The bill now includes a more workable disclosure mechanism for REALTORS® and landlords. The commercial, industrial, and residential rental disclosure obligation becomes effective on either the January 1st or the July 1st that occurs six months after DHS establishes permissible exposure limits.

With single-family residential properties, SB 732 changes the Transfer Disclosure Statement (TDS) to add mold to the list of natural hazards on item I.C.1. Sellers would check off the item if they’re aware of mold within the property. Like AB 284, SB 732 was sent to the governor for his signature. Log on to the Legislation section of C.A.R. Online (www.car.org) for more information about these measures.

In addition, C.A.R. has been working with DHS to update the Environmental Hazards Disclosure Booklet to include a section on mold. Existing law provides that if this booklet is delivered to a transferee in connection with the transfer of real property, neither the seller nor broker is required to provide additional information concerning the environmental hazards described in the booklet. The updated booklet that includes a mold section will be available this December.

Carla Dane is a legislative analyst for C.A.R.

Uncovering Mold Concerns
Toxicity & Prevention Tips

Although an estimated 100,000 types of mold exist worldwide, only two species of mold, Stachybotrys chartarum and Memnoniella, have been determined to be toxic–meaning they produce mycotoxins that can contribute to severe respiratory and nervous system complications in susceptible children and adults. Yet no study has been undertaken conclusively to establish permissible exposure limits to such molds and no fail-safe way exists to prevent any type of mold from growing within buildings. However, homeowners can try to prevent mold growth by reducing moisture, eliminating sources of leaks, and immediately removing any water-soaked building material.


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