Background Information

What is Mould?

Moulds and/or fungi are microscopic organisms found both indoors and outdoors. Although they are part of the natural environment, moulds are undesirable when they grow in homes. Over 270 species of mould have been identified as living in Canadian homes.

Moulds enter the home in a number of ways - through open windows or doors, on clothing, pets, food or furniture. Problems arise when mould grows inside the home. Mould has the potential to cause adverse health affects, as well as property damage.

What are the warning signs of possible mould growth?

Discolouration is a sign of mould. However, all discolouration is not due to mould. Carpeting near baseboards, for example, can be stained by outdoor pollution entering the home.

Mould may be any colour: black, white, red, orange, yellow, blue or violet. Dab a drop of household bleach onto a suspected spot. If the stain loses its colour or disappears, it may be mould. If there is no change, it probably isn't mould.

Sometimes moulds are hidden and cannot be seen. A musty or earthy smell often indicates the presence of moulds. Nonetheless, a smell may not be present for all moulds. Even if a smell is not evident, wet spots, dampness or water leaks are indications of moisture problems and mould may follow.

What causes indoor mould growth?

High moisture is the major contributor to indoor mould growth. The nutrients mould needs to thrive can be found in a number of the basic elements in home including: dirt, dust, wood, paper, adhesives, fibres, paint, textiles, carpets, and floors. Different kinds of moulds grow on different materials. Some moulds like extremely wet environments, while other kinds may grow even if no water is apparent. Dampness inside the material can be enough to allow mould to grow. The actual germination of mould is caused by a number of factors including:

Air

Mould grows best in stagnant areas, which is why more mould is found in closets, attics and inside walls. Mould is caused largely by poor indoor air quality.

Nutrients

Organic materials such as drywall, wood, ceilings, adhesives, paper, plasters, leather, and cloth are ideal for growth. Homes with more dust and debris will most certainly produce more mould growth.

Time Remaining Wet

Mould growth occurs rapidly after an area is wet. The longer the materials stay wet, the higher the likelihood of mould growth.

Humidity

Humidity above 50% RH (relative humidity) is desirable for mould growth.

Water source contamination

The greater the water source, the greater the likelihood of growth. For example, loose toilets, pipe condensation, pipe leaks, foundation leaks, and crawl space leaks are likely causes of mould growth.

Moisture

Mould thrives in areas where the moisture content is 18% or greater. Areas such as basement drywall, basement wood paneling, or cardboard boxes on the basement floor are likely targets of mould growth.

Light

Most moulds thrive in dark places like closets, attics, basements, inside walls, behind wallpaper, or behind refrigerators.

Temperature

Temperatures between 20 and 30 degrees Celsius are the optimal temperatures for mould growth.

A case of mould causing structural damage: B.C's "Leaky Condos"

Approximately 10 years ago, owners of condominium strata lots in British Columbia began to experience water penetration through the building walls and into their suites. Initially, the problem seemed to be restricted to a few buildings. It was thought at the time that the leaks were the result of faulty workmanship or defective material.

As the problem became more common, those in the construction field began to speculate that the frequency of buildings suffering water penetration suggested a problem deeper and more complex than faulty workmanship or defective materials.

Leaky condos can be attributed to many factors, including the use of a building design for taller condominiums that were actually developed for single or two-story buildings. An analysis demonstrated that the buildings taller design caught extra rain and wind. That may be compounded by the use of "barrier design" or "face-sealed" cladding, which is intended to keep water out, but does not provide adequate ventilation to dry out once it leaks. The third factor cited in the leaky condo controversy involved unskilled contractors working with incomplete plans. Building techniques that encouraged wrapping buildings in plastic vapour barriers, trapping humidity and condensation.

As a result, hundreds of condominium buildings - most constructed during B.C.'s housing boom in the 1980's and 1990's, are now leaking and rotting, as fungi and moulds have grown on floors and walls. In order to repair the problem, the walls have to be opened up, the rotten wood replaced and the building reclad.

Many condominium owners are facing major costs for major substantial repairs. Some condominium units are so badly damaged they are rendered unsellable.

In 2001, the B.C. Homeowner Protection Office handled an average of nine new interest-free loan applications a day from leaky condo owners, down from the 15 applications a day handled in 2000. In 2001, condo owners from 38 municipalities in B.C applied for repair loans.

The B.C. Assessment Authority also reported that in 2001, property re-assessments were conducted on 13,161 leaky condominium units for the 2002 tax roll, and their overall assessed value dropped $261 million. By comparison, 14,354 units were re-assessed in 2000 and the reduction in value totalled $296.6 million.

According to the Assessment Authority, reductions in assessed value have ranged from as low as $2,000 to as high as $60,000 per condo unit. Reassessments were based on the cost of repairs and a measurement of local real estate activity.

British Columbia's Leaky Condos Cont'd

Hundreds of condominium buildings - most constructed during B.C's housing boom - are leaking and rotting. Conservative estimates say it will take over $1 billion - most of it from the owners - to repair the leaky, poorly built condominiums in southern British Columbia. Many condominium owners were faced with major structural repairs that devoured retirement savings an rendered their units unsellable.

A provincial commission led by former B.C. Premier, Dave Barrett held 29 hearings regarding "Leaky Condos", and heard from hundreds of beleaguered homeowners. The Commission made 82 recommendations, most of which were quickly adopted as law. Among the most significant changes are the licensing of residential builders and the creation of no-interest loans, funded by fees on new construction and administered by a Homeowner Protection Office, to pay for repairs. A mandatory home-warranty program, funded by developers, will guarantee a condominium is leak-free for five years and free of structural defects for 10 years.

The Provincial Sales Tax Relief Program, which now covers leaky condos, housing co-operatives and single-family dwellings, applies to repairs completed after July 28, 1998 when the B.C. Homeowner Protection Act was passed. Eligible strata councils and co-operative boards administer grants for the buildings.

The $75 million Reconstruction Loan Program provides no-interest loans to homeowners with no other means of financing repairs - usually because they have little or no equity left in thier unit. More than $12 million in loans has already been paid to over 650 "leaky condo" owners. To enable more homeowners to participate, eligible homeowners are now permitted to have $10,000, instead of $5,000, in liquid assets. Nor do they have cash in Registered Retirement Savings Plans and pensions to qualify. Retirees with up to $250,000 in non-pension savings are still eligible. Individuals who own more than one defective unit may qualify for additional loans.

Since June 30, 1999, B.C. building permits are not issued without effective third-party warranties and a licensed builder. The new warranty standards offer two years protection on labour and materials, five years on building envelope defects and ten years on structural defects.

Mould issues for the Public

Visibility

Mould that is visible is not always the major problem. When mould grows out of sight - in between walls, in attics, under a roof - it usually means a larger, more expensive clean up, and the possibility of a health concern.

The bigger concern with mould growth is when it grows in the 'building envelope'. A building envelope is the combination of the foundation, wall and roof assembly working together to provide a comfortable and safe environment in a building. It also preserves the building's structural integrity and works in conjunction with the heating, cooling and ventilation systems.

In recent years, homes with a stucco exterior have received attention due to their potential to develop mould through exterior cracking, water leaks, and mould contamination. Still, their is very little evidence to demonstrate that stucco construction (cement plaster) is any less or more susceptible than other structure exteriors.

Health Concerns

It is still not clear to what extent mould can pose a health concern. Severe reactions may occur among those exposed to large amounts in occupational settings and no one disputes the fact that mould exposure may produce allergic responses in certain individuals, including: wheezing, eye irritations and stuffiness.

However, there still remains disagreement amongst the experts whether or not there is a link between indoor mould growth and severe health problems. To date, there have been no Canadian mould cases where any amount has been awarded for personal injury.

Inhalation of fungal spores, fragments or organic compounds from a wide variety of mould may lead to allergic reactions, cause toxic effects or cause infections. Illnesses can result from both high level, short-term exposures and lower level, long-term exposures. The most common symptoms reported from exposure to mould in indoor environmnets are runny nose, eye irritation, cough, congestion, aggravation of asthma, headache, and fatigue.

Whether or not these symptoms develop in people exposed to mould depends on the susceptibility of the exposed person, the amount of exposure and the species of mould.

• Susceptible Individuals - Those allergic to mould, those with low immunity and babies whose lungs have not completely formed
• High levels of exposure - exposure to large amounts of spores over a long period of time, and
• Species of mould - the more noxious moulds pose the greatest risk

The presence of mould on surfaces does not mean automatic exposure and illness. In order for humans to be exposed indoors, fungal spores, fragments or organic compounds of mould must be released into the air and inhaled, physically contacted or ingested.

The effects of inhaling mould spores include allergies, infection or irritation.

• Allergic Reactions - a significant portion of asthmatics are allergic to moulds. Other forms of immediate and delayed allergic responses, such as hayfever (allergic rhinitis), also may occur.
• Infectious mechanisms - in immuno-compromised individuals, exposure to moulds that would not normally cause illness can result in infection, termed mycosis. Only a small group of mould fungi have been associated with infectious disease.
• Toxic and Irritative Effects - long-term exposure to moulds have been associated with a number of non-specific respiratory and flu-like symptoms, headaches, skin problems and impaired immune functions as well as a lung condition in infants known as pulmonary haemosiderosis.

Not surprisingly, young babies, asthmatics, and persons who have poor immune systems (such as those undergoing cancer treatment and persons with HIV) are the highest risk if they are exposed to large amounts of mould

Getting Rid of Mould

It is impossible to get rid of all mould and mould spores indoors. Because mould can never be completely removed, professionals use the term 'abatement' when describing mould removal.

However, the mould spores will not grow if moisture is not present. By controlling the moisture level inside the home, indoor mould growth can be prevented. Once mould growth is located inside the home, it is important to act quickly. Mould damages what it growns on, and the longer it grows, the more damage it can cause.

In all situations, the underlying cause of water accumulation must be corrected or mould growth will recur. To dispose of mould and prevent re-growth, seek professional help and control moisture in the home.

Seeking professional help

The Canada Mortgage and Housing Corporation (CMHC) recommends seeking professional help when there is an extensive amount of mould and/or the home is very damp and moist. Professional help will also be required if mould comes back after repeated cleaning and if a family member suffers from asthma or respiratory problems or other health problems that appear to be aggravated inside the home.

When seeking professional help, it is important to hire a company that has previous environmental experience in lead or asbestos abatement. Although an Indoor Air Quality investigator will be able to test the air for signs of mould, they are not trained and qualified in the abatement or encapsulation of mould.

Moisture Control

Mould needs moisture to grow. Controlling the moisture and keeping the home dry prevents the growth of mould. Check the home for signs of moisture and moulds. Moisture is produced in the home through daily activities like bathing, washing clothes or cooking. High moisture levels can be the result of water entering from the outside, through the floor, walls or roof; or form plumbing leaks. Moisture can also accumulate within the home when there is not enough ventilation to expel the excess water.

The most common sources for moisture that can develop into mould are roof, wall or basement leaks.

Insurance Issues

In Canada, the Insurance Board of Canada (IBC) has issued an advisory to its members, recommending that member companies exclude mould completely from any policy.

According to the Dominion of Canada General Insurance Company, there are many reasons why the insurance industry is taking another look at their insurance policies pertaining to mould. The insurance industry is losing money - companies are paying out most in lossess and operating costs than they are taking in.

This new focus on risk management regarding mould claims "has nothing to do with the hysteria surrounding the issue in the U.S," says Anne MacKenzie of Dominion. "We need to evaluate the risks we are taking on. We are more aware of the need to pay attention."

In Canada, there has been no explosion of mould claims. From 1995 to 2002, there were less than 30 'mould' lawsuits in Canada, including two failed class actions.

Mould is viewd by insureres as an 'inevitable risk', "and something inevitable is not insurable. Mould is excluded under the category of deterioration. If you don't treat the problem - mould will inevitably happen," says Anne MacKenzie.

Mould is not a new phenomenon to the insurance industry. Insurers have been dealing with mould and water claims for a long time, and say they are not backing away from coverage.

Some insurers are offering mould coverage in separate environmental insurance policies, under the umbrella of indoor air quality. According to the Ontario Real Estate Association (OREA), the premiums for environmental insurance are quite high-about $10,000 for $1 million of coverage - which is expensive for residential property owners.

For multifamily housing, annual premiums for an environmental policy with mould coverage generally run about 20% higher than the cost of a policy without such coverage. For commercial buildings, the premiums are about 10% higher than the cost of a standard environmental policy. Mould coverage can come with all sorts of limitations and conditions, such as the requirement that potential policyholders have a plan for preventive operations and maintenance for the property. Moreover, there are no uniform standards for what such coverage should include or cost.

Not surprisingly, the anxiety within the insurance industry respecting the possible reach of mould claims has resulted in the Insurance Bureau of Canada analyzing the problem and issuing advisories with respect to policy wording.

In May 2002, the "Mould Advisory Group", a committee of the Insurance Bureau of Canada, recommended that insureres tighten up wording in their policies concerning mould-related damage or injury. It noted that skyrocketing claims in the U.S., mainly involving water and flood damages to residences, could spill into Canada.

However, Vancouver lawyer and insurance litigation specialist, Nigel Kent says that it is highly unlikely that there will be an explosion of mould litigation in Canada, similar to the US experience.

Kent adds that there will be occasional liability cases arising from mould infestations. Indoor air quality issues and sick building syndromes may cause the closure of high profile court houses, schools or other public buildings and significant litigation may ensue from time to time.

There are several factors that, when combined, have led to the recent increase in mould-related claims and litigation:

• The 1970s energy crisis led to the construction of commercial and residential buildings that created sealed environments for occupants and residents. Sealed environments were created by sealing windows shut and installing centralized mechnical ventilation (HVAC) systems. Sealed environments do not allow for moisture evaporation, creating environments suitable for mould growth. In addition, central HVAC systems may spread and re-circulate mould spores.
• Pressure to complete new construction quickly and cheaply has frequently led to the use of different building materials that can encourage the faster growth of mould. Also, pressure in recent years to meet housing demand may have led to the use of inexperienced labourers and contractors. This may have resulted in poor construction practices, which in turn may have left buildings that allow for water entry and moisture accumulation, providing an environment for mould growth.
• Media attention centered on mould-related illness and litigation has increased public awareness of mould issues. Also, there is an increased awareness of indoor air quality issues in general, as government and scientific agencies research and publish findings on these issues.

Historically, claim trends specific to mould are difficult to establish because many mould-related claims are often presented and processed as water damage claims, sick building (related to indoor air quality) claims, or construction defect claims. Insurers are beginning to track mould-related claims separately. In an attempt to quantify increases in frequency and severity, some insurers may have to review historical water damage, sick building and construction defect claims to determine which of these may have been mould-related.

Some insurers speculate that mould-related claims could cost the insurance industry billions of dollars nationwide if nothing is done to control the situation.

From CREA