Gray Davis Signs The Toxic Mold Protection Act of 2001

The Toxic Mold Protection Act of 2001 is now law. Mold exposure litigation has exploded in the past two years, prompted by high profile articles in numerous newspapers and magazines, as well as the recent travails of Erin Brockovich. The litigation process is costly, time consuming, and complicated, as it involves elements of personal injury, property damage, construction defect, and habitability claims, all of which require separate teams of experts to defend or to prosecute the claims. Further, the general lack of definitive science linking mold exposure to any specific physical condition other than allergic responses and a rare lung problem, redouble the cost and complexity of the litigation by requiring teams of medical professionals, including allergists, immunologists, epidemiologists, psychiatrists, and neurologists. The Toxic Mold Protection Act of 2001 tried to address this litigation powderkeg, but, in the form signed by former Governor Gray Davis, it may do little more than engender further rounds of complex litigation near the midpoint of this decade.

The law requires the California State Department of Health Services to convene a task force including health and medical experts, mold abatement experts, government representatives, representatives from California employers and employees, affected consumers and affected industries. The task force will develop permissible exposure limits to mold, assess the health threat posed by the presence of molds, and set standards for assessment, identification, and remediation of mold.

The new law will not become effective until January 1, 2002, at which time the Department of Health Services can appoint the task force. The task force must report its progress on developing the permissible exposure limits for molds by July 1, 2003. After the Department adopts permissible exposure limits to molds, it will review and revise the limits at least once every 5 years.

While the bulk of the new legislation aims to develop and to implement standards for identifying and remediating mold, the primary impact on property owners will be the new disclosure requirements. Starting on the January 1 or July 1 that occurs at least 6 months after the department adopts the requisite standards, and guidelines, the new law will generally require a written disclosure to potential buyers, prospective tenants, renters, landlords, or occupants from any person or public entity who sells, transfers, or rents residential, commercial, or industrial real property, or operates a building who knows, or in specified instances has reasonable cause to believe, that mold is present that affects the unit or building, and the mold exceeds the permissible exposure limits to molds, of the mold conditions. California Civil Code 1102.6 will eventually include mold questions in a new Transfer Disclosure Statement for sellers of residential 1-4 unit properties.

The Toxic Mold Protection Act of 2001 will eventually provide some meaningful guidelines for owners and users of real property. The lack of a requirement for testing, however, may doom it to irrelevance. With testing, objective standards would apply and remediation would occur where necessary. Any lack of objectivity and clear standards, however, invites litigators into the breach, triggering further rounds of complicated and expensive mold exposure litigation.

--- Gregory S. Nerland

Return to the GSN home page