Mould. The “new” Asbestos issue?
Borrowers are generally aware of the hazards of asbestos, which have been exhaustively reported upon. Potentially serious health implications resulting from exposure to the friable fibres within pipe wrap, ceiling and floor tiles, fire proofing, and other building materials, are now well known.
Also of concern, and possibly surpassing asbestos, and before that UFFI, as a concern top of mind for commercial mortgage lenders and borrowers alike, is the presence of mould. While perhaps not as harmful as asbestos in isolation, it nevertheless contributes to “sick building” syndrome. It has been linked to respiratory tract and hay-fever like symptoms, as well as asthma like symptoms in those individuals prone to asthma suffering. READ MORE.
We are joined again by Larry Backman, Executive Vice President National Accounts, Environmental Due Diligence & Remediation, Pinchin Ltd., to discuss this important topic:
Mould Growth. Should we be concerned?
YPLP: The public is generally knowledgeable about the health risks associated with asbestos. Many businesses have sprung up offering asbestos identification and removal services as well. Perhaps less commonly known, but no less problematic, is the issue of mould growth. Can you explain why commercial mortgage lenders, and prospective borrowers should be concerned?
LB: Mould has become the new Asbestos issue of this decade. Mould sensitivities have become more visible in the public with reference to “sick building”. No one wants to own such a building, as it’s been my experience once it has been identified as a “mouldy” building, the stigma will never be lost on potential purchasers or banks;
YPLP: Aren’t conditions for mould growth pretty much in evidence in almost all commercial and multi-family residential buildings?
LB: Mould is often found in most buildings; however, there is more serious strains of mould that result from repeated water penetrations that go unfixed for years;
Will a Phase I ESA identify mould?
YPLP: Does mould identification fall within the scope of a typical Phase 1 Environmental Site Assessment?
LB: PH I ESA’s do not include for destructive testing. Quite often mould is not identified in concealed spaces where it grows;
YPLP: Is mould growth more likely to be prevalent in particular types of buildings, or particular building locations?
LB: Mould is generally the result of failures in the Building systems. Whether that be a leaky roof, windows, foundation, etc’
YPLP: If discovered, is mould readily remediated?
LB: Yes, mould is typically remediated through removal/cleaning, and re-instatement of new building materials;
What can a property owner do?
YPLP: Given the potential of significant cost associated with mould remediation and removal. What can a property owner do to prevent mould growth in the first place?
LB: Ensure the Building systems are working, no leaking roof, windows, foundation, etc.;
YPLP: Presumably mould identification would be an important due diligence item for a prospective commercial mortgage borrower. I presume that’s where Pinchin can assist?
LB: Yes, Pinchin has been in the business since 1981, and we are routinely retained to work for a variety of clients (commercial, residential, etc.) to deal with their mould issues.
Thank you Larry.