Mold is a growing -- even festering -- topic in Atlanta business circles.

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(Wake up, CDC - it's in your backyard! It's coming to get you!!)

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February 1, 2002 print edition

Atlanta Business Chronicle

Mold creeping into awareness of building owners

Tom Barry Contributing Writer

Mold is a growing -- even festering -- topic in Atlanta business circles.

The ancient microorganism flourishes in the soil and on plants and, as

everyone with indoor plumbing can attest, it's a big problem around toilets,

bathtubs and sinks, wherever moisture can stagnate and misbehave.

Usually, there's a fungus among us, especially in a humid climate like

Atlanta's. If the bitter truth be known, most people walk around with some

type of mold on them. There could even be a spot of Cladosporium,

Penicillium or Aspergillus on your CEO. Go ahead, tell him.

But what's termed toxic mold is a very real concern in office buildings with

leaky roofs or other major moisture problems, which are often caused by

shoddy construction, experts say.

" It's a big problem that affects every state, including Georgia, and it's

really exploded as an issue, " said Tony Worthan, president of Air Quality

Sciences Inc., a Marietta-based environmental firm.

Damaging health, property

Toxic mold is a rising worry in Atlanta commercial real estate and insurance

circles and a raging topic in California, Texas and Florida, states hard hit

by flooding and prone to bouts of heavy rain. It's the subject of recent

legislation in California and massive lawsuits elsewhere.

Several years ago, a study showed between 20 percent and 30 percent of

commercial office structures in the U.S. were " sick buildings. " One-half of

the nation's 115,000 schools have indoor-air woes.

Unchecked, toxic mold can cause severe health problems, especially in

asthmatics, those with allergies and children. Some 17 million Americans

have asthma and up to 30 percent of them are sensitive to mold.

Mold can wreak extensive property damage. In the worst cases, buildings have

to be evacuated and virtually rebuilt.

Air Quality Sciences, which also has operations in San Francisco, does

considerable work in metro Atlanta combating mold in office buildings,

Worthan said.

" Fixing the problem can be quite expensive, " he said. " It can even cost

millions of dollars, if the building's envelope has to be peeled off and

replaced. Then it becomes almost like new construction. "

Legal fuzziness

Mold separated itself from the primeval slime eons ago. But about the only

time it received good press was in 1928, when Fleming discovered

penicillin from a lab culture he had left to fester while on a two-week

holiday. Fleming made medical history, plus showed that it really pays to

use all your vacation days.

Mold is " a huge gray area " of Georgia law, said , an

environmental lawyer with Troutman LLP. " Georgia law has no legal

requirement regarding toxic mold in buildings, nor are there OSHA

regulations. So far, the legal standard across the nation has been

negligence. Was the landlord negligent in not removing the mold? So it's not

a true regulatory or legal standard. "

Adding to the general fuzziness is the fact that not all mold is toxic.

Ordinary mold is annoying and can even be embarrassing in the best social

circles, but it's also benign. Toxic mold brings on adverse health effects.

" There's uncertainty in the science and uncertainty in the law, which makes

mold cases particularly challenging, " said.

In a few states, plaintiffs have collected millions of dollars in damages

from mold lawsuits. pointed to a Delaware case last year in which

the tenant of an apartment building who suffered from allergies and asthma

was awarded $785,000 after her landlord ignored long-standing mold problems.

Many Georgia insurance companies now exclude mold from general liability

coverage. Toxic mold was the red-hot topic in the insurance industry before

Sept. 11, supplanted thereafter by terrorism.

So far, no major awards stemming from mold have been handed down in Georgia

courts, but expects a spate of litigation in coming years.

" A lot of cases are just now hitting the courts, " he said. " Insurance

companies are denying coverage in many cases, plus the Internet has allowed

the rapid dissemination of information on the topic. "

Many disputes will be quietly settled, he predicted. " A court case

stigmatizes an office or apartment building. As with all good real estate

issues, people will try to resolve their differences without using the court

system. "

Worthan expects an eventual push for some type of state legislation in

Georgia. " When it really starts affecting pocketbooks, it will be pushed to

the forefront, likely by the building or insurance industry, " he said.

`A whole mold industry'

Some believe toxic mold is more the hot-button blather de jour than a

problem with real bite. Mold Mania, if you will. Like the fungus itself, it

grows in a climate of hot air.

Insignia/ESG Inc.'s portfolio includes more than 6 million square feet of

office space in the Atlanta area.

, Insignia ESG's director of insurance/risk management, said

there is " a whole mold industry out there " whipping up concern, much like

consultants a few years back stirred worry over radon gas into frenzy.

" Mold is a fungus that occurs naturally, " he said. " Add the word `toxic' and

you think of chemicals and what's in landfills. You scare people. "

At Childress Klein Properties Inc., which has 4 million square feet of

office space in Atlanta, senior property manager Freeman said mold

isn't a problem in class A office buildings.

" People are talking about mold, and nobody quite knows why, " said Freeman,

past president of the Atlanta chapter of the Building Owners and Managers'

Association (BOMA).

Lawsuits about mold are inevitable, said. " There will always be people

filing claims, and there will always be lawyers trying to link an illness to

an environmental exposure. It's just the nature of the beast. "

Mold, it seems, has legs.