April 8, 2007


Mold is a four letter word that has been and is increasingly on the mind of every owner, landlord and Board. Indeed, mold is rapidly becoming the next “lead paint” issue for owners, operators and managers of commercial property, both residential and commercial. This article will attempt to give a overview of the various issues involved, the recent court decisions dealing with the mold issue, the position of insurance companies and an overview of potential liability issues. The article will conclude with a recent actual case history.

The mold issue will definitely not be going away anytime soon. Despite the fact that there are currently no universally recognized guidelines pertaining to mold contamination, the plaintiffs bar has seized upon mold as its next gravy train. Mold damage cases are exploding in number and courts, juries and regulatory agencies are granting large awards despite what appears to often be a complete lack of proof, scientific or otherwise, of actual damage. It seems as though the mere mention of the word creates hysteria and legal consequences.

Mold is universal. It is everywhere all the time and is, for the most part, not harmful. It is a virtual impossibility to remove all mold from everywhere. Anywhere there is moisture there is mold and that is anywhere there are humans whether in apartments, houses or offices. There are mold spores in every kitchen and bathroom everywhere in varying quantities. Mold is rarely, if ever, a problem except in two situations: where a the health of a particular individual is adversely affected by mold or where a particular individual wants to make it appear as though he/she has been adversely affected by mold for monetary gain. The latter predominate.

The cause of mold of the greatest concern to IMPACT readers is moisture. Moisture may penetrate living space from outside as a result of a leak or other cause of water penetration or it may arise inside the unit as a result of condensation, poor ventilation or poor hygiene. It may or may not be noticeable. Since very few people are adversely affected by mold, complaints are generally made when the occupant actually sees a mold growth. Most often the owner/landlord merely removes the mold with no further problem. However, the problems arise when the occupant insists that the mold has made him sick, requiring extensive mold testing and remediation. It is interesting to mote that mold testing indicates the presence or absence of mold and quantifies the infestation but since there are no current guidelines (a situation that is changing as we speak), the result is amorphous. That, however, will not prevent the determined tenant from seizing upon the result for the purposes of complaint or otherwise. In some cases, occupants develop actual symptoms and seek medical advice which may or may not relate the symptom to a mold infestation. Thereafter, the occupant will request that owner do a test or have a test done themself. If the result of the test indicates a high incidence of mold, the occupant will insist upon remediation. Of course, the level of mold is that as compared to all measurements of mold in similar environments and does not mean that any particular mold level is toxic or harmful to any particular individual, only that there is more mold in one unit than there is in the average of other units.

If the infestation is caused by a leak from outside, it must be repaired which may entail significant cost to the property owner. It may come from an interior leak with similar consequences. It may also come from poor ventilation in a bathroom or kitchen or a simple lack of hygiene on the part of the occupant. Although I am unaware of any case law on that particular issue, it will be interesting to see what the courts decide to do with such a defense. As you know, the courts have not allowed the defense of “contributory negligence” (in general) in lead paint cases, treating lead paint in the absolute despite a clear showing by the owner that the occupant failed to take even the slightest action to prevent the damage. Everyone is always a victim with no personal responsibility.

The mold scenario generally unfolds upon receipt of a complaint by owner/board from an occupant. Despite the lack of scientific guidelines, such a complaint should be taken seriously and investigated. Upon investigation, if it appears to be a problem, an expert should be called in to do a test and, based upon the result, remediation may be necessary. It is beyond the scope of this article to discuss remediation. While there is little or no evidence that mold is toxic and the burden of proving damage due to mold is on the occupant, it is wise to remediate since one never knows how the damage issue will be dealt with in the future.

Of course, remediation can be quite expensive and not necessarily permanent, especially if the cause is poor hygiene.

Generally, after remediation, the matter is closed except for those few who decide to sue for damages and/or complain to regulatory agencies. In the event of a lawsuit, insurance is generally not available, most commercial policies containing mold exclusions. It is therefor all the more important to make an record by doing a thorough inspection with a proper team. The cause must be found and if mold is detected the condition should be identified and quantified with an eye on EPA guidelines in order to show reasonableness in the event of future litigation. (The EPA guidelines referred to in the preceding sentence do not refer to levels of mold and/or the effects thereof but to remediation procedures. In addition, the guidelines are just that – guidelines. They do not have the force of law and, indeed, the guidelines themselves state that while mold MAY cause harmful effects, there is no proof. However, following the remediation guidelines will obviously be of help in the event of litigation.)

In a recent Federal case in the U.S. District Court for Western New York, the ruling applied New York law to deny insurance coverage for losses allegedly attributable to property damage from mold, irrespective of whether the policy contained a mold exclusion. While two previous Federal Court cases had denied coverage due to express exclusions in the policy, this case went further and held that no coverage existed where the mold was caused by failure to properly maintain the premises, rather than by a fortuitous event (such as a leak, etc.) This is a very interesting decision in that it seems that the reasoning can be extrapolated to argue that an occupants failure to maintain the premises would bar him form obtaining damages as well.

The above case deals with a claim for property damage as opposed to a claim for physical damage.

Claims for physical damage are exploding as well. However, in order to prevail in such a case, plaintiff must prove both causation and damage. Plaintiff must prove both a pathway and adverse health effects attributable to the mold by expert testimony, quite an expensive undertaking with a problematic likelihood of success given the absence of any scientific consensus on the health effects of mold. Indeed, in the recent case of Fraser et. Al. V. 310-52 Townhouse Corp., the Supreme Court (NY) ruled in a lengthy decision that it was incumbent upon the plaintiff to show that the mold condition caused the illness and that the plaintiff had failed to demonstrate that the scientific community supported the theory of damage due to mold.

While the foregoing may all be well and good, here is a review of a recent mold situation that is still ongoing in the City of White Plains.

A tenant in a coop complained of mold. Management inspected the premises, found some mold and did a remediation. Tenant was not satisfied with the remediation, claiming illness caused by mold and had her own testing done which should acceptable levels of mold. Not satisfied with that finding, she hired a second company that came in with unacceptable levels of mold despite the prior remediation. She immediately filed a complaint for reduction of service with DHCR, attaching the findings of her various testing services and complaining of ill health. DHCR, in their infinite wisdom AND WITHOUT ANY INVESTIGATION OF ANY KIND, reduced the rent. Owner filed a PAR which, not surprisingly, was denied. Thereafter, tenant complained to the City of White Plains Building Department who immediately issued an order to the effect that the premises was uninhabitable due to the mold, despite having been given the proof of remediation. The City based its finding upon the tenants claims and the DHCR reduction, again WITHOUT DOING ANY INVESTIGATION OF ANY KIND. Indeed, the City later admitted that it did not have the expertise to even make a determination regarding mold. In addition, the building code does not contain any mold guidelines of which we are aware. Thereafter, based upon an unsupported claim by tenant that she had to vacate the premises, DHCR reduced the rent to $1 WITHOUT ANY ADDITIONAL INVESTIGATION OR FINDING OF ANY KIND. Thus, based upon the same evidence which it used to reduce the rent to the last rent in effect, it again reduced the rent with no additional investigation or findings to $1.

Owner commenced an Article 78 proceeding and, incredibly, the court agreed with owner and remanded the proceeding back to DHCR for a full hearing which DHCR had refused to conduct despite the numerous pleas of landlord. It should be noted that tenant failed to produce even the slightest proof of illness and even failed to produce proof of her claimed relocation despite a DHCR direction to do so. I will keep you advised of the outcome on our website at

The above is merely another indication of the hysteria and irrationality surrounding the mold issue. This tenant will obviously be unable to produce any proof of harm but she has been able to easily game the system resulting in her using the power of the state to attack the owner without any evidence of any kind resulting in a massive expenditure of both time and money for nothing. THIS is the real problem with mold complaints.

Stephen Lehrman is the managing partner of Lehrman, Kronick & Lehrman, LLP at 199 Main Street, White Plains, N.Y. The firm has been a member of the BRI since its inception in 1978 and specializes in Landlord/Tenant, Condo/Coop and real estate law. You can access our “blog” containing topical information at our website at