Mold problems are injecting an element of chance into realestate deals, according to a recent survey of builders and realestate lenders conducted by the Environmental Assurance Group,based in Hartford, Conn.

When asked whether they believe that mold can affect the valueof a real estate transaction, 99 percent of respondents said yes.Of those surveyed, 60 percent reported hearing of parties who hadbacked out of real estate transactions due to the fear that moldproblems might exist. Possible mold liability involving investmentproperties was a concern among 76 percent of executives. Inaddition, respondents familiar with specific mold-related incidentssaid that it would have taken an average of more than $300,000 tofix the problems.

Developers, architects, construction executives, and mortgagelenders are taking precautions to protect themselves because of themold exclusions recently written by the insurance industry onproperty and business policies, according to EAG. “Our latestsurvey shows that mold fear is growing exponentially among themajor stakeholders in the real estate business in a post-insuranceworld,” said Charles Perry, a principal with the firm. “It's clearthat, without the emergence of a new risk mitigation method, doinga real estate deal nowadays is just a roll of the dice, which iswhy the insurance industry bowed out.”

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