Skip links

Water Damage and Mould: Your Rights As A Property Owner

Ron Allison and Melinda Ballard were living their dream. Recently married with successful careers and a three-year old son, they were living in a beautiful home on 62 acres of land in Austin, Texas. But then, in 1999, their son Reese began having respiratory problems. His condition continued to get worse, but doctors came up empty.
Then Ron began to experience strange symptoms. After shopping for groceries, he would forget where he had parked his car and couldn’t even remember which car was his. At work he couldn’t focus, and workers would notice him staring at a blank screen. Doctors compared the symptoms to those of Alzheimer’s.
Melinda soon fell ill too, but no one could figure out what was causing the family’s symptoms.
The answer would come thanks to a chance meeting. In 1999, Melinda was on a flight and happened to be sitting next to Bill Holder, owner of Assured Indoor Air Quality. They began to chat, and Bill asked Melinda a question that would change her life forever: “Do you have a water leak in your house?”
The answer was yes. A month earlier, there was a leak which had caused damage to the hardwood floors. The leak was repaired and the couple thought nothing of it. The couple wanted to repair the water damage right away and asked their insurance company in writing for permission to do so. The insurance company responded saying that if repairs were made during the investigation, they would forfeit their coverage. So they had been forced to do nothing.
Most types of household mould are harmless and will generally only affect someone with allergies to mould. But some mould is far more dangerous.
When the test results came back, the mystery was over. Melinda and Ron’s home was contaminated with a toxic and potentially deadly strain of mould called stachybotrys.
Stachybotrys spores can be found on most building materials and don’t generally pose a problem. But if those materials get wet, such as from a leak, and if they are in a dark, moist environment, the spores multiply rapidly and produce a poison called mycotoxins.
Tests of the home’s air were next, and revealed the presence of mycotoxins virtually everywhere. The family was forced to leave the home and take nothing with them. The mould had spread so far through the home that the estimate cost of removal was $1 million dollars, but the insurance company wouldn’t pay. The dispute dragged on for two years, and by then, experts concluded that the home, and everything in it, was beyond repair.
Melinda and Ron sued the insurance company for the value of their home and property: $6 million dollars. The legal argument that the couple’s lawyers put forth was that the insurance company knew, or should have known, about the potentially harmful effects of delaying repairs to water damage inside a home or building.
But the jury did not award the couple the $6 million they had asked for.
When presented with evidence as to the harmful effects of stachybotrys on human cognitive functioning and considering the potentially irreversible damage done to Ron and Reese (Melinda did not suffer any long-lasting effects), the jury awarded the couple $32 million dollars. An appeal reduced the amount to $4 million, but the couple appealed that decision which lead to a confidential settlement out of court.

Tips for Avoiding Mould Mishaps

While this surprising story occurred 3000 km away, it has some important lessons for us Canadians.
Mould can typically appear in homes beneath the floor or behind the walls or ceiling after a leak or other form of water damage. As it’s normally hidden from view, it’s important to inspect for the presence of mould anywhere after water damage has occurred or anywhere in a home that is damp. In addition to excessive moisture or leaks, other clues to the presence of mould may be stains or discolouration on floors, walls, ceiling tiles, fabrics, carpets or a musty odour.
If any of these signs appear, make sure to have the problem inspected immediately. If there is water damage in your home, repairs should begin within 48 hours, and if you find yourself blocked by your insurance company, contact a lawyer immediately.