Black Mold: Real Estate Investing’s Hidden Curse!

Black Mold Real Estate Investing’s Hidden Curse!

When it comes to black mold, real estate investors must always be on the lookout for the often-subtle signs of a mold problem because this is one issue that can destroy a property’s value/salability, while also posing a very serious threat to one’s health. In fact, mold problems are especially commonplace in warm, humid locations such as Florida, where high year-round humidity and heat create an environment where mold rarely dies off naturally. As a result, mold can continue to grow unchecked for many months and even years, creating a situation where the mold spreads throughout the structure.

But what is black mold, exactly? Is it always dangerous? How is this type of mold detected? How do you get rid of black mold effectively? How does black mold impact property value? And what does this mean for you as a real estate investor? These are important questions that you’ll need to consider if you’re purchasing an investment property that shows signs of a mold problem.

What is Black Mold? Why is it Dangerous?

According to the U.S. Center for Disease Control (CDC), black mold-which has a scientific name of tachybotrys chartarum or stachybotrys atra-is green and black in color. It grows in a warm, humid and often dark environment atop materials with a low nitrogen content and a high cellulose content. This means that black mold is attracted to surfaces such as gypsum board/drywall, fiberboard, paper and cardboard, along with surfaces that are covered with a thick layer of dust and even lint. The latter two surface types-dust and lint-are especially significant, as they’re commonly found inside ductwork.

Mold spores are tiny and quite prevalent, as they float through the air both inside your home and outdoors. If you were to examine a random air sampling, you would likely find dozens of tiny mold spores. These spores generally don’t cause a problem until they affix to a surface and colonize, resulting in a visible mold problem.

The CDC points out that the term “toxic mold” is actually a misnomer as the mold itself is not toxic, but the organism does release mycotoxins into the air. These mycotoxins can upset the respiratory system, causing chronic and acute symptoms such as asthma, chronic cough, frequent respiratory distress and chronic upper respiratory infections. Children, the elderly and individuals with a compromised immune system are most susceptible to developing mold-related health issues. Notably, there have even been reports linking black mold to serious ailments such as pulmonary hemorrhage (bleeding in the lungs) and even neurological symptoms such as memory loss. But the CDC indicates that scientists have yet to confirm that black mold was the sole and primary cause of these health problems. Even so, it’s clear that black mold poses a serious health risk and few are willing to move into a house with this dangerous mold, which means that real estate investors must exercise due diligence to ensure that a property is mold-free.

Black Mold and Real Estate Investing

Black mold may be extremely apparent in some cases, whereas in other cases, the mold may be more challenging to detect. Mold problems most often arise in cases where you have a warm, dark and damp environment, often with poor air flow. Humidity alone generally isn’t sufficient to allow black mold to colonize initially. Most often, the mold forms after drywall, wood and other items are dampened by water that originates from a roof leak, a leaking pipe or even condensation from piping or poorly-installed HVAC system components. Once the mold colonizes and becomes established, it can spread to areas with a bit less moisture, resulting in a house-wide problem.

What’s more, black mold-and other forms of mold, in fact-can be rather difficult to detect. Let’s say a pipe is dripping inside a wall. It may not be sufficient to cause any outward symptoms, but it’s enough to dampen the back side of the drywall and the insulation. This creates an ideal environment for mold formation, yet the mold may not be outwardly visible.

It’s also possible for the mold to take up residence inside the ductwork of your HVAC system, thanks to all of the lint and dust that accumulates in the ducts. This may be invisible to the naked eye; you may not even realize the mold was present until it spreads to a more visible area of the structure. And even then, it’s possible that the property owner may treat the visible area, leaving the mold inside the ductwork intact.

Quite simply, mold can be sneaky and difficult to eradicate. Often, by the time black mold becomes visible, it’s far more widespread than you realize. For this reason, if any sign of mold is detected, it’s essential that you consult a mold remediation company to perform a full inspection.

What Are the Signs of Black Mold in a House or Other Structure?

Unfortunately, black mold looks like many other varieties of mold. There is nothing particularly unique about its appearance, so for the layman, black mold can be difficult to differentiate from other less dangerous varieties. Therefore, if you detect any mold in a property, it’s best to consult a professional who can perform a simple test to identify the precise species.

There are a number of areas where you’ll be likely to find black mold, so it’s important to give these areas extra scrutiny. This is particularly essential if you opt to forego a home inspection on a prospective investment property. Here’s a look at the common problem areas where you’ll see the first signs of a mold problem:

  • The Attic: Many Florida real estate investors loathe the idea of going up into the attic because it’s extremely hot and stuffy. But a few minutes of discomfort are going to be well worth it if you can avoid purchasing a nightmare investment property! Make your way up into the attic and look for signs of a roof leak. Ideally, you should use a flashlight to examine the underside of the roof right after a heavy rain, as this is the best time to see moisture and dripping from a leak. You may also find signs of a leak such as wet insulation, swollen wood or fiberboard, and water marks on the home’s ceilings and drywall. If there’s a leak, then there’s going to be water and moisture present inside the structure and this almost certainly means you’ll have a mold problem. Although it will take a professional to determine if black mold is present.
  • Ductwork: While you’re in the attic, you’ll likely see visible ductwork for the home’s HVAC system. The ducts are typically comprised of sections that simply slide apart, allowing you to look inside the ducts to determine if there is any mold present. You’ll want to be sure you re-tape the joints after you’ve put the ductwork back together.
  • Near Piping: Check the drywall and cabinetry around sinks and toilets. A small pipe leak can result in damp drywall, which is the perfect location for mold formation. Firmly press a capped pen to the wall in the area around and below the piping; if it leaves a dent, then this can be a sign of moisture. If the walls are tiled in the region where the pipe enters the wall, press on the tile immediately surrounding the pipe to determine if there’s any “give” or movement of the underlying wall. Again, if you have moisture, you’re likely to have mold formation and there’s a fair chance that it’s dangerous black mold.
  • Around the HVAC Condenser: Many Florida homes have an HVAC condenser mounted on the garage ceiling. These condensers tend to “sweat,” particularly during the hot summer months. The condenser should have a built-in tray to catch any drips and this tray should be connected to pipes that drain the moisture outside. But unfortunately, installers often fail to install the piping at the right angle, resulting in poor drainage. This can cause the catch tray to overflow, leading to dripping and drywall damage. And anywhere you have excess moisture, there’s a potential for black mold (and other mold species.)
  • Carpet, wood flooring and laminate flooring: It can be nearly impossible to determine if there’s a problem brewing beneath tile or linoleum, but carpeting, wood flooring and laminate flooring will usually display some fairly easy-to-detect flaws. Moldy carpeting will be obviously discolored, so it’s extremely easy to detect. Wood flooring and laminate flooring will swell and shift following a significant exposure to moisture. Laminate flooring will actually delaminate in some cases, resulting in very visible bubbles and flaws. Even solid wood planks may warp and deform. Therefore, be on the lookout for any flaws and bubbles (you can actually feel the floor moving when you step on a large bubble). You can also look at the floor from a low angle to see if there are any anomalies that are suggestive of a water problem. If you detect an issue, look around for a possible source of water. You may find corresponding water damage on the wall or ceiling, for instance.

Additionally, you may detect a damp, musty odor if black mold, mildew and other mold species are present, although there are many cases where mold may not emit any noticeable odor. This is particularly true in areas with good ventilation.

Black Mold Real Estate Investment Properties in Florida

You must carefully consider the risks and rewards if you choose to acquire an investment property with black mold. It may be possible to acquire the property for a very good price, even when you factor in the cost of mold remediation-which can be quite extensive, involving the replacement of drywall, insulation, ceiling tiles, carpeting, flooring, ductwork and woodwork, among other items. But one problem remains: the issue of disclosure when the time comes to sell the property.

In the state of Florida, property owners and landlords are not specifically required by law to disclose a now-remedied black mold problem. But if the remediation efforts were not sufficiently thorough and the black mold returns, you could find yourself in the hot seat. A recurrence can arise if an undetected area of mold remains and spreads or even if the mold removal contractor failed to properly ventilate the house. A widespread mold problem can lead to the release of copious volumes of mold spores, which need to be ventilated from the home or they may recolonize if they happen to encounter a suitable warm, dark, damp location. This underscores the importance of eliminating any and all damp environments where mold could thrive.

Black mold real estate recurrences can lead a buyer to claim an instance of “non-disclosure of the property’s condition and history” in certain circumstances. That’s because Florida law requires the seller to disclose any and all issues that could have a “substantial impact” on the property’s desirability or value. In other instances, buyers can legally pursue a seller by claiming the mold arose as a direct result of a “construction defect,” as this can include not only the initial build, but also repairs and renovations.

Of course, each situation is unique and if the black mold (and source of moisture that contributed to the mold formation) is properly eliminated and the house is well ventilated, then chances are good that you won’t encounter any problems down the road. But it’s important to understand the possible risks so you go into the real estate investment fully informed. This will help you maximize your chances of seeing a profitable investment. Black Mold Real Estate issues can be both profitable and avoided at the same time.

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