Minimize Liability for Mold Crisis During Construction

The recent spate of mold and water intrusion lawsuits has generated an abundance of literature, mold protocols, opinions and advice about how to avoid mold and water intrusion problems. To cut through the verbiage and save reading time, below is a checklist of some of the key techniques that will help prevent mold and resulting mold litigation.

• Review plans and specifications for details regarding water drainage, particularly flashing details. Review areas with potential for water intrusion such as doors (especially if door has ADA compliant threshold); or condensation (e.g. pre-cast concrete walls may need drip pans on inside face to gather and drain moisture).

• Use quality building products, especially for exterior siding, roof materials, windows, pipes. Be cautious of "value engineering" in these systems and in the HVAC system.

• Carefully install roofs and windows and make sure that roofs, windows and doors (all exterior building penetrations) are properly flashed and sealed. Make sure flashing has proper end dams and that laps are sealed. Make sure windows have proper weep holes. Be careful with installation of roof scuppers.

• Use proper insulation on all cold surfaces (e.g. pipes) to reduce possibility of condensation. Make sure that vapor barriers are on the proper side of the wall to avoid condensation.

• Make sure rain drains away from the building through proper grading and adequate downspouts.

• Make sure that building materials such as gypsum board are dry at the time of installation. Require subcontractors to protect materials stored on site and to remove any wet materials immediately. [Note: many suppliers are including specific time frames for inspecting materials delivered to jobsite for water or mold damage in their purchase orders or delivery tickets — be sure your project managers are aware of any such requirements and that they inspect materials promptly and advise supplier if materials are rejected.]

• Have project manager maintain a log describing precautions taken during construction to keep building materials dry (e.g. that drywall was stored indoors until installation and building was dried in before interior drywall was installed). Whenever possible, store materials such as wood framing under roof or above ground and covered with waterproof tarp. Photographs taken during construction are excellent documentation, although they can be a two-edged sword.

• Make sure that HVAC systems are properly installed and operating when the building is turned over to the owner. Be sure that test and balance report is completed before building is turned over and that all discrepancies noted in test and balance report have been addressed. Document that building has 60 percent or less relative humidity at time of turnover.

• Make sure that exhaust fans do not operate when intake air is shut off.

• Have project manager keep a log that describes efforts to construct building to avoid water intrusion (e.g. noting that flashing was installed around window openings).

• Sequence and coordinate work to prevent water intrusion. Schedule material deliveries to minimize amount of time materials are stored on site.

• Require subcontractors to dry out building immediately if there is any leak and repair or replace wet materials.

• Check subcontractors’ insurance to see if there is coverage for mold problems (most new policies will exclude mold). Request subcontractors to list builder as an additional insured on their policy.

• Require subcontractors to sequence and coordinate work to prevent water intrusion and to protect work during construction.

• Require subcontractors to pay builder for costs to remediate any damage and any other costs associated with water intrusion or mold growth.

• Include waivers of consequential damages in owner/builder contracts to avoid liability for loss of use, business interruption, lost profits, etc.

• General information about moisture sources (e.g. water in HVAC and refrigerator drip pans).

• Recommendations for controlling and preventing moisture and mold growth in homes (e.g. repair leaky pipes, check for standing water around sinks and bathtubs, look for water stains at windows).

• Recommendations regarding other sources of information about mold (e.g. U.S. Environmental Protection Agency).

• Include "mold checklist" in pre-occupancy inspection.

• Provide a waiver of liability for mold growth caused by owner’s failure to follow builder’s recommendations.

• Document training and information provided to owner regarding operation and maintenance. Some contractors do a videotape of this training.

These are just the key points to avoiding mold liability during construction. Everyone in the construction process should be aware of mold, its causes and how to prevent mold growth. Owners, contractors and subcontractors should have formal procedures to prevent mold and to respond to mold claims or water intrusion events. But, the best approach for preventing mold growth is to keep water out.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.