Early planning can head off problems down the road BY DAVID J. PFEFFER, ESQ. Mold and water infiltration in homes and businesses have been increasingly cited as causes of health problems, including respiratory ailments and neurologic impairments. Mold and water infiltration may also cause substantial property damage necessitating remedial work. Furthermore, insurance carriers are often unwilling to pay for mold claims, leading to lawsuits when damages are significant.
New construction materials and modern building techniques to shorten construction project schedules have contributed to the significant rise in mold and water infiltration claims. The resulting high-profile lawsuits involving substantial verdicts that have emerged throughout the country in both residential and commercial settings, have cast a spotlight on mold and "sick building"'related claims. The media have steadily reported on personal injuries from mold exposure and the dangers of living or working in sick buildings.
The increased awareness of health-related issues arising from mold, especially among the elderly, coupled with the construction boom of new long-term care facilities, has placed them at particular risk of facing mold or water infiltration'related claims.
Whether these claims are simply a current trend or will remain a fertile area of construction defect litigation is uncertain, but nursing homes can take preventive measures to protect themselves against these risks before claims arise.
The key to a successful protection plan is to prevent water intrusion and mold growth during construction and to have a system in place to deal with a mold or water event during or after construction.
First, all construction contracts, whether for the renovation of an existing nursing home or the construction of a new building, should contain a coordinated mold and water infiltration prevention plan that obligates construction team members to specify materials, construction techniques, and project phasing to reduce these risks. Project agreements should also contain specific requirements for dealing with a mold occurrence, including provisions for confidentiality, insurance notification, cleanup methods, etc.
The following is a brief example of contractual language that can be inserted into a nursing home's agreement with its contractors (and similar language can be inserted into the design professionals' agreements):
- The Contractor warrants that it shall coordinate and perform all of the Work to ensure that the Project is completely watertight at all interior spaces, including, but not limited to, all areas above grade and below grade, prior to the installation of any interior work and finish materials. The Contractor also warrants that all of the Work and materials installed or to be installed for the Project shall be properly protected and safeguarded from water or moisture damage.
Prior to commencing any Work on the Project, the Contractor warrants that it shall establish written procedures to ensure that the Project will be constructed watertight at all interior spaces, including, but not limited to, all interior areas above and below grade.... The Contractor shall submit the Water Infiltration Prevention Procedures.... The Contractor shall also ensure that Contractor and Contractor's subcontractors and other entities providing work, labor, or services for the Project shall conform their work and services in compliance with the Water Infiltration Prevention Procedures.
Project agreements should also contain indemnity and insurance provisions that protect the owner and property from water infiltration and mold growth liability during and, in some cases, after construction.
Second, since insurance coverage is often at the heart of mold and water infiltration claims, all policies, including those of the construction team members, should be reviewed before undertaking a renovation or new construction project. While most policies include broad exclusions for mold and certain types of water infiltration, claims can often be couched in terms of events that are, in fact, covered by insurance. To take advantage of available insurance, it is imperative to know exactly what events are covered and the notice requirements for making such claims. Construction counsel should be consulted before making claims for instances of mold or water infiltration to ensure that such claims receive the best possible chance for coverage.
Third, because the best way to avoid mold claims is to prevent mold, construction plans should address all avenues of water infiltration, since mold needs water to grow. The construction documents are frequent sources of design errors and omissions that lead to water infiltration and subsequent mold growth. Water infiltration problems can often be traced to building orientation, grading and natural topography, and subsurface conditions that are not properly accounted for in the design. The benefits of different wall systems, flashing, and ventilation should be carefully evaluated. Contractors should also have a proven installation record with the specified systems. Nursing homes should be especially aware when installation requires near-perfect contractor workmanship.