August is Louisiana REALTORS’ Risk Management Month, the purpose of which is to build greater awareness among brokers and agents on legal and regulatory compliance issues that can impact their business. Thoughout the month, LR general counsel Scott Johnson will be posting short daily articles on a variety of risk management topics. A video recap of the previous week’s articles will be posted each Monday, and all information presented during Risk Management Month will be archived in this section.
We hope this feature helps you minimize risk and legal liabilities in your practice. For more information, please contact Scott Johnson at 800-266-8538.
Today's Legal Issue
Mold Issues August 27, 2010
Molds can be found almost anywhere, especially in Louisiana homes. Most molds are not dangerous to people, but certain molds can cause serious health problems for some people. Since molds are in virtually all homes, and some molds are toxic, REALTORS must exercise caution in making representations to buyers about the presence of mold in a home.
Fortunately, REALTORS can protect themselves from liability by using common sense and following established rules and guidelines for addressing the issue of mold.
Establish that you are not an expert on mold by directing all clients to other resources for information on mold, such as the EPA brochure or the EPA website at http://www.epa.gov/mold/index.html. LREC regulations require that this information be provided to clients and customers before they enter into a lease or sales contract.
Have sellers fill out the property condition disclosure form completely, including the questions about mold in the home. If your client asks you how to answer those questions, refer them to either the resources listed above, or have them consult an expert.
However, if your seller informs you that toxic mold is present in the home, that fact must be disclosed to prospective buyers.
As set forth in the purchase agreement, a buyer has the duty to have the home inspected for mold. The purchase agreement further states that the agent’s duty is limited to providing the buyer with the EPA’s information about mold, and the website is provided in the contract.
Mold-related claims against a licensee are not covered by the basic E&O policy provided by the LREC. An endorsement may be purchased for $15.00, which provides limited coverage for expenses incurred in defending against a mold-related claim.
Latest Video Update
Information provided during Risk Management Month is designed to keep Association members informed of the latest legal developments affecting real estate brokerage and sales, and to supplement educational programs. Questions about this or other Association content should be addressed to Louisiana REALTORS. Information included in posts and videos during Risk Management Month should not be construed as specific legal advice, and Louisiana REALTORS strongly encourages its members to consult with their own legal counsel.
