Frequently Asked Questions
As a realtor, what do I need to know about vacant homes?
PLEASE READ: Homeowner’s Insurance for Vacant Homes…What You Need to Know!
Homeowner’s insurance has been a hot topic lately…especially with sellers who have already vacated their current home. In today’s market, it is not uncommon for a homeowner to buy a new home first without selling their old one.
The problem is, most insurers will not insure a vacant home because there is a greater possibility that something will happen to it. Some insurers will even stop coverage all together when a home has become unoccupied for over 30 days. That’s because such occurrences as theft, vandalism, fire and water damage are far more likely to happen in vacant houses than occupied ones and the damage is more likely to be worse because no one is around to report it or stop it.
If you find yourself in this situation, ask your current insurance company for a “vacancy permit” but you need to do this BEFORE the 30 days expire. This type of permit will provide similar coverage but will not protect your home against malicious acts, glass breakage or water damage. Some insurance companies do offer coverage for vacant homes but typically it’s at a higher premium.
Bottom line is…make sure you do your due diligence before making the decision to vacate your home (if it’s going to be for an extended amount of time). The devil is always in the details!!
Mold in the Home: How it Affects REALTORS®
Spalding Insurance Group
NATIONAL ASSOCIATION OF REALTORS®
INTRODUCTION
Mold is the newest environmental scare grabbing the public’s attention. Although mold has always been present in schools, homes and office buildings, it has not received the nationwide attention that it is receiving today. Homeowners and apartment residents across the country are filing lawsuits in increasing numbers, claiming that indoor mold has harmed their health. Because this issue keeps growing, REALTORS need to be aware of the concerns surrounding mold and may need to take steps to protect themselves from liability. While this paper is not meant to cover all aspects of the mold issue, it will cover some of the key issues regarding mold -- what mold is, how people are reacting to mold in their homes, how government and industry are responding, and what the disclosure responsibilities and liability of REALTORS® with regard to mold may be.
WHAT IS MOLD?
Molds exist everywhere. They can be found both indoors and outdoors. Molds move in and out through open doors and windows, ventilation systems, and by attaching themselves to people and animals. It is impossible to keep mold out of the house. Molds occur naturally and are categorized as a fungus. As part of nature’s recycling system, which sustains plant and animal life, molds assist nature by helping to break down dead material in the environment. Numerous types of mold exist, but most are harmless.
In order to grow, mold needs moisture and an organic food source. Food sources include clothing, wood, wallpaper, paint, and carpet. As molds grow and reproduce, they release spores into the air. When these spores settle on a damp surface with a sufficient food source, the process is repeated. Some molds have the ability to produce mycotoxin, a toxic substance which may be harmful to a person’s health. Stachybotrys chartarum, an example of a toxic mold, has been the subject of recent media stories.
There is little scientific research on how mold may affect a person’s health. As scientists already know, some molds are good, such as those used to make penicillin. However, some people may be more sensitive to mold than others, just as some people are more sensitive to dust, food, or trees. In these people, allergic reactions such as sneezing, itchy eyes, and coughing are possible. Although scientific research on the relationship between mold and health problems is inconclusive, some people have claimed that exposure to mold can result in more serious health problems such as triggering asthma attacks, memory loss, neurological problems or even death. Because different people react in different ways to mold exposure, it is difficult to determine how dangerous mold in the home may be. For this reason, experts still do not know at what level exposure to mold becomes a health risk in any given instance. Currently, there are no established standards for acceptable levels of indoor mold.
WHAT SHOULD REAL ESTATE PROFESSIONALS DO?
There is little or no statutory, regulatory or case law that expressly addresses the duties of real estate professionals specifically related to mold concerns. In the absence of explicit guidance regarding those duties and obligations, real estate professionals should follow existing requirements of state law relating to latent defects and disclosure, including any particular requirements and standards of care set forth by their state licensing authorities. Beyond the requirements of law, real estate professionals may also, strictly as a matter of prudence, wish to consider adopting practices intended to help their clients and customers become aware of and familiar with mold concerns, as follows:
Listing brokers, buyers’ representatives and even transaction brokers should identify publications of the state or local departments of health or other appropriate agencies, if any, for material explaining this issue. While licensees are not microbiologists or mold specialists, they can provide these public educational booklets as a service to their clients and customers. In at least one state, providing this booklet actually gives statutory protection from some liability.
In some states licensees are required to conduct a reasonably diligent visual inspection, and many licensees conduct such an examination of the property even though not expressly required by law to do so. Although it is not prudent for licensees to opine on the cause of unusual property conditions they may have observed, the conditions that licensees would normally note in the course of a visual inspection may include some conditions that may also lead to mold problems. Examples of such conditions are obvious water stains, such as on carpets or walls, strong or musty odors, leaky roofs or windows, plumbing leaks, overflow from sinks and sewers, or even visible mold growth. A licensee should not speculate whether or not these conditions may in fact indicate a mold problem, however, since licensees are generally untrained in such matters. As in any transaction sellers should be encouraged to disclose any actual knowledge they may have of mold problems on their properties, subject to any state disclosure requirements. Most sellers will not know if their properties have mold problems. If the seller is aware of a mold problem, the seller may elect to ask a competent expert to determine the extent of mold present and to recommend any corrective actions required.
To the extent publications or materials discussing mold are available from local, state or Federal health or other agencies, licensees may also find it to be a prudent and helpful service to provide such information to clients and customers. Such information should be provided in response to a buyer’s expression of concern about mold. As usual, when a licensee notes red flags indicating the possibility of latent property defects, the buyer should also be advised, in writing, that it may be prudent for him or her to contact a qualified expert to inspect the property and determine the nature of any problems and what options for remediation exist. One state, however, recommends that air sampling not even occur until further standards are developed. Some purchase contracts available in some states already contain such a written advisory to buyers that they should conduct appropriate environmental investigations including any concerning toxic mold.
Armed with this information, the buyer can make an informed decision regarding the purchase of a home that has or may have mold concerns.
CONCLUSION
NAR will continue to work with EPA and other federal entities as appropriate to ensure that federal efforts to protect the public health are also fair and reasonable toward the real estate industry. We will also continue to work with REALTORS and REALTOR associations to monitor legislative, regulatory and judicial developments, disseminate updated information to the NAR membership, and develop policy if necessary.
