What a story! A homeowner's nightmare

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A homeowner's nightmare

Bay house bought for $557,000 ordered razed due to mold

By MARIE ROHDE

mrohde@...Last Updated: Dec. 11, 2002Whitefish Bay - In May, and Kaare Lotz's $557,000 offer won a bidding war for a house at 6122 N. Bay Ridge Ave., a home they thought was in move-in condition. But within weeks of moving in, they learned that the house was uninhabitable and could be neither insured nor sold.

Whitefish Bay

Photo/Tom Lynn

Toxic mold contaminates this Whitefish Bay house, an insurance company and inspection service say. A city official deems it uninhabitable.

Quotable

I have insurance that I pay a substantial amount of money for, and they've done nothing for me. All our savings are gone, and I've had to take a loan out against my

business.

- Lotz,

homeowner

The house is contaminated with what an insurance company and inspection service call toxic mold. The mold is so rampant that the Whitefish Bay building inspector ordered the house razed.

Crews were scheduled to begin tearing down the house today, though lawyers representing the former owners' insurance company and the real estate firm involved in the sale have appealed the raze order.

The Lotzes said they have spent more than $800,000 on the house, plus $20,000 on legal fees - so far - and expect to spend $750,000 to build a comparable house on the lot.

That doesn't include the $13,000 in property taxes or the more than $2,000 a month for the house the family is renting.

"I have insurance that I pay a substantial amount of money for, and they've done nothing for me," said Lotz. "All our savings are gone, and I've had to take a loan out against my business.

"I can't imagine how devastating this would be for people less fortunate."

The Lotz saga began in spring when Kaare was pregnant and the couple's Shorewood home was looking a bit small. The couple have three older children. The big Lannon stone house on Bay Ridge was perfect; it even had a little yard, something the couple's Shorewood home lacked, Lotz said.

Built in 1927, the house was expanded in 1991, and that remodeling was part of the attraction, Lotz said.

"We really didn't think we had to do anything but move in," Lotz said.

Lotz had an inspection before closing that led to a few changes, such as a basement wall repair and tuck-pointing. Lotz also replaced the garage and installed granite counters in the kitchen.

According to village records, US Inspect Inc. inspected the house in February and again in June, after problems developed. A US Inspect spokeswoman declined to comment.

Mold was not found in the inspection, nor was it reported by the former owner or the real estate agent, Lotz said.

The inspector did note that the heater for the master bath steam shower did not have any place for water to collect if the unit overheated. A pan was installed, and the couple began using the shower after the sale.

"We used it for two days, and then the mold started appearing all around the shower," Lotz said.

That was the beginning of the nightmare, Lotz said.

When workers popped the baseboard off the bathroom wall, they saw large amounts of black mold. The mold expert called in to do the removal had two suggestions for Lotz: Contact a lawyer and have the house tested to determine the extent of the problem.

Melvan of Inspection & Assessment Services in Brookfield did a limited assessment in August and reported that the house had a history of water leaks and had had mold remediation work in the past - a surprise to Lotz. Melvan found the contamination extended through more than half of the house.

Melvan found several mold varieties that he reported could be associated with allergies, asthma and other ailments, especially for children, the old and those with compromised immune systems.

While others disagree on the health impact, Sheila Batka, environmental scientist with the U.S. Environmental Protection Agency's regional office in Madison, recently said, "If you've got mold, get rid of it."

On Aug. 14, Lotz filed a claim with his insurance company, Atlantic Mutual, which then canceled his policy, citing increased risk because toxic mold had been found. That prompted the mortgage lender, West Bend Savings, to call in the full amount of the loan, though it also made a similar loan to Lotz's business so he could keep the house. "The bank was great," Lotz said.

Lotz is a part owner of Timber Holdings Ltd., which imports durable tropical wood and is the largest supplier of boardwalk decking in the country.

Eventually, Lotz's insurance agent filed a complaint against Atlantic Mutual with the state insurance commissioner, and the insurance was reinstated. Still, Atlantic has not paid the claim or taken any action against the previous owner of the house or the real estate firm, Lotz said.

Hannan, a lawyer representing Shorewest Realtors, declined to comment. Frederick Strampe, the lawyer representing former owners ce and Vicki Schober, and Hossli, a lawyer representing Atlantic, did not return calls.

Vicki Schober said only that she and her husband had been unaware of a mold problem.

Lotz continued to believe the house could be fixed, though it would probably cost $100,000 to remove all the mold.

Work continued until August, when workers pulled off a wall in a downstairs bathroom - one where no mold had been detected - and four workers were engulfed in a cloud of mold spores.

Patti , one of the owners of the general contractors doing the work, said all the men got sick within hours.

"They were coughing and just had that drained feeling," said. "They were all out for about 2 1/2 days."

The Melvan inspection prompted Whitefish Bay Building Inspector Jasper to order the house unfit for human habitation. The family had to move immediately.

"I had one day to find a house for my family," Lotz said. They moved to a rented house first in Fox Point, then Whitefish Bay.

The mold was so extensive that some of the Lotz personal belongings had to be destroyed.

Lotz still hoped the house could be saved, though the cost might reach $250,000. But when the estimates came in at over $350,000, Jasper, the building inspector, ordered the house razed, based on a state law that mandates demolition if repair costs exceed half the value of a property.

Lawyers for Shorewest and for the former owners argued that most of the mold had been removed and that additional work could make it safe.

Lotz said they haven't offered to pay anything toward the costs he's had nor have they offered to buy back the house.

Lotz has village-approved plans for a new house on the lot. He said he intends to proceed with the demolition because he has to pay the crew $10,000 for every week of delay.

"Nobody's paying these bills but me, and I can't afford to wait any longer," said Lotz.

Lotz chokes when asked about the impact on his family, noting that moving three times has been especially hard on his child who is a high school senior.

"My coping mechanism is to joke about it," Lotz said. "My wife doesn't talk about it. She just keeps it bottled up inside."

He said he and his wife have often asked why this is happening.

"From a faith standpoint, we believe it's because we have the strength to survive," Lotz said. "But I wonder what would happen to people who have a $150,000 house and not a lot of other resources. Could they afford $100,000 in legal fees?"

A version of this story appeared in the Milwaukee Journal Sentinel on Dec. 12, 2002.