If the upside of Green Building is such trophies as Manhattan’s Hearst Tower, the downside has got to be the dysfunctional environment, the space that fails to support proper health, well-being and productivity. David J. Pfeffer is a partner in the New York City-based law firm of Arent Fox, and his practice focuses largely on the construction industry, wherein he represents owners, design professionals and developers. Pfeffer says that with tens of thousands of mold-related cases out there, the issue is quite literally nothing to sneeze at, and the solution–uniform legislation based on scientific proof of a link between mold and health–is still far off. But he does have a fix for owners who want to protect themselves, and in an exclusive interview, he lays it out for us.

GlobeSt.com: What does it take to become an expert on mold?

Pfeffer: Well, it really takes the joining of several practices of law. When we’re talking about mold and mold-claim issues, we’re really looking at several different legal issues. One is personal-injury issues and how to handle someone claiming that they’ve become sick from mold. Number two is property-damage issues and what happens when someone says their property has been damaged because they have some sort of mold or water-infiltration. Number three is insurance. Mold and water-infiltration claims are really hot topics in the insurance arena, and there’s a lot of insurance language written into most property and casualty policies concerning this.

GlobeSt.com: Who ultimately is responsible?

Pfeffer: It’s rather a loaded question because, like any legal hypothetical, it’s going to be dependent on the facts. When we’re talking about mold, usually the property owner or manager will have the first line of liability, but at that point it’s also been passed onto other individuals who can be held responsible for allowing the mold growth and water infiltration to be there, such as contractors, architects, engineers and other professionals who, as we say, have their fingerprints on the issue. Sometimes you have tenants who aren’t taking care of their property pursuant to their leases and other users and operators not doing what they should to inhibit mold growth.

GlobeSt.com: In the cases you’ve been involved with, how do the majority of decisions fall?

Pfeffer: There again you have to understand that mold claims fall into one of the three categories I mentioned. So let’s break it down. When we’re talking about personal-injury claims, we’re talking about a user of property who’s complaining that they’ve become ill as a result of breathing in mold spores. Those claims haven’t been universally accepted. In fact, most states, including New York, currently hold that you can’t prove scientifically the causal relationship between mold and personally injury.

GlobeSt.com: The point being that it could be from any number of sources?

Pfeffer: That’s correct. Mold exists naturally in our environment. In fact in numerous personal-injury cases the defense counsel has been able to establish that the mold-spore levels are actually greater immediately outside the building than inside.

GlobeSt.com: And with respect to property damage?

Pfeffer: That’s a totally different scenario. Here we can have several typical fact patterns. One fact pattern that is common is in new construction or in the renovation of an existing building when, during construction, water enters the building. Once it does it’s very hard to get out, and at that point you have a real opportunity for mold spores to grow.

No one wants mold in a new building, and very often the construction contracts have provisions that will require contractors to do things to stop mold growth. So in a nursing home or hospital or condominium you have a real issue because you have to get it out, and you have to get it out quietly and carefully so users feel comfortable that the building is safe.

These sorts of claims come in a few different ways. One is where you have an owner claiming against a contractor or design professional that they did something or designed something that allowed water to enter and there was subsequent mold growth. The claim looks to the contractor or design professionals to pay for the cost of remediation and clean up.

The second type of claim is where you have a user suing a developer to clean mold up. Very often, since the developer isn’t building the building, they’ll try to pass that claim back to the contractors or design professionals. So that’s construction. When we’re looking at property damage with respect to existing buildings you can have the same sorts of claims.

GlobeSt.com: Can you quantify the problem in dollars?

Pfeffer: There have been extensive cases across the country–probably tens of thousands of cases–dealing with mold-related claims. There have been recorded cases where students of a school district or employees of a court sue for hundreds of millions of dollars in personal injury and property-damage claims. Mold represents a significant potential liability against property owners and managers.

And what’s really important here is that when there’s a mold claim against a property owner or manager–whether it’s valid or not–it’s very important from a business standpoint to handle it properly to avoid litigation down the road.

GlobeSt.com: And what does handling it properly mean?

Pfeffer: There are several ways to handle a mold claim. A responsible property owner or manager will quietly inspect the claim and try to determine the cause, if in fact mold exists, and try to repair the issue. As I said, in New York, the courts have not looked favorably on personal-injury claims, which is a nice safety valve currently, although that might always be the case. That could always change.

GlobeSt.com: Is there anything in the political climate that could force that change?

Pfeffer: Yes and that’s a good point. As of now there are no specific federal regulations related to mold. There are certain EPA and OSHA regulations requiring buildings to be clean and maintained properly, but nothing specific to mold, and there are guidelines about how to clean up mold and what do when you have an occurrence, but there are no federal requirements.

GlobeSt.com: And at the state level?

Pfeffer: Several states have enacted legislation targeted to mold. In 2001, California enacted the Toxic Mold Protection Act, which went into effect in 2002. Essentially, the act requires that certain designated experts will evaluate the health effects and eventually try to enact some criteria. As of now they’re still studying the effects. It’s the same in New York, where we have the Toxic Mold Task Force Act. It’s similar to California but not so broad. It requires certain experts designated by the state to assess–and this is important phraseology–based on scientific evidence, the nature, scope and magnitude of the adverse environmental and health impacts caused by toxic mold.

GlobeSt.com: This might have positive repercussions for tenants thinking about a lawsuit.

Pfeffer: Absolutely. The task force is supposed to report back in the coming months–although in practice it’s really going to be years–to the governor and state legislature about what they believe the magnitude of the mold impacts will be based on scientific evidence.

GlobeSt.com: To what extent has the issue been accelerated in the green awareness push?

Pfeffer: When we’re talking about building green and LEED standards, we’re talking about using certain materials in a building that not only make the building more efficient but more effective in its relationship to the environment. We’ve been very careful to include provisions in our agreements with contractors and design professionals wherein they are required to progress the work and protect the work from water infiltration and mold-related events, and if there is an event to report it back confidentially to the owner so it can be handled quickly, properly and quietly.

Over the past 10 years property owners and managers have learned how to handle these claims with a strong business sense in that they are quick to respond. The common wisdom is to get that manager out there to inspect the problem and hopefully remedy it quickly and keep that building safe.

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