MOLD LEGISLATION UPDATE
Negotiations Bring Positive Results
for the Rental Housing Industry

Since the first half of the legislative session, a dedicated group of California Apartment Association members and staff have been in negotiations with tenant organizations and other interested parties on the leading toxic mold bill introduced at the State Capitol this year. SB 732, by Senator Deborah Ortiz (D-Sacramento) sets up a structure for the identification and remediation of toxic mold from buildings— commercial, residential, and public. These negotiations have proven to be extremely beneficial for the rental housing industry. Representatives for CAA have worked diligently on SB 732 with the understanding that the issue of mold was not going away. News reports were appearing each day, creating a sense of urgency and quasi-hysteria concerning the negative effects of mold. Judges and juries had already handed down enormous awards against rental property owners, and CAA’s Board of Directors concluded that it was extremely important to establish a “level playing field” for owners and tenants on this subject. SB 732 is the first attempt in California to write law on mold exposure and cleanup. Up to this point, sentimental juries have decided damages on a case-by-case basis. In some instances, insurance companies have not covered the claims.

Here’s an overview of SB 732 and the work that has transpired on the bill so far.

SETTING THE STANDARDS
At the heart of this bill is a requirement that the Department of Health Services develop mold remediation and identification standards. The Department will perform this function with the oversight and guidance of a formal industry task force, which will include rental property owners and manager representatives.

As originally introduced, SB 732 also required the Department of Health Services to set standards at which mold is dangerous to humans - referred to as the “permissible exposure limit.” CAA representatives argued that it was not possible to establish a standard that would apply to the general population. The presence of mold in a building does not mean that people will be exposed or that they will exhibit health effects. Whether or not symptoms develop in people exposed to mold depends on the type of mold, the amount of exposure, and the susceptibility of exposed persons. Susceptibility varies with the genetic predisposition, age, state of health, and concurrent exposures. For these reasons, CAA representatives argued that it was not possible to make a determination concerning safe or unsafe levels of exposure for people in general. Senator Ortiz, thereafter, amended the legislation to remove this mandate and instead has simply required that the Department of Health Services review the subject of permissible exposure limits.

TESTING
The legislation includes language that prohibits the Department from mandating that building owners be obligated to conduct any testing for mold.

CONTRACTING FOR MOLD CLEANUP
It also prohibits the Department from requiring building owners to utilize a third-party specialist to test or remediate mold from a building. Owners could perform the work themselves or utilize their own staff.

SUBSTANDARD HOUSING
As initially written, SB 732 made the existence of mold a substandard housing code violation. Senator Ortiz has agreed to remove any reference to mold within that health and safety code laws (Health & Safety Code 17920.3) that would have made the existence of mold within a building a substandard condition.

SPECIFIC DISCLOSURE
The disclosure language that was initially included in the bill has been rewritten to require a property owner to disclose the presence of mold to prospective and existing tenants only when the owner knows or has reasonable cause to believe that there is mold that affects the unit and the tenants. Owners will be exempt from providing written disclosure if the mold is remediated according to the mold remediation standards adopted by the Department in conjunction with the Task Force. These specific disclosure requirements will not be required until the time that the Department develops standards.

GENERAL DISCLOSURE
Rental property owners will be required under this legislation to provide a general Department of Health Services’-approved disclosure pamphlet to tenants.

CALIFORNIA APARTMENT
ASSOCIATION GUIDELINES
If this legislation is signed by the Governor, the Department of Health Services and the Task Force will begin its work as mandated by the new law. In the meantime, however, owners may be left wondering how to deal with claims of mold contamination, how to remediate mold from their buildings, or how to ensure that it never makes an appearance at all. The California Apartment Association has, therefore, organized— through its own internal Mold Task Force— a set of Mold Remediation Guidelines to help owners. The finishing touches are now being placed on these guidelines, and CAA representatives expect the finished product to be available in late August. You can check CAA’s website at www.caanet.org for your copy.

RELATED LEGISLATION
Two additional bills were introduced at the beginning of the Legislative Session on the subject of mold. AB 178 by Assembly Member Cox (R-Sacramento) failed to move this year due to the inability of the author and all interested parties to agree on amendments for the bill. AB 284 by Assembly Member Jackson (D-Santa Barbara) may end up as a companion bill to SB 732. As now written, AB 284 is an education bill, which would authorize resources for training and education for individuals who perform mold remediation. It also establishes a website to provide public education on mold and its effects. We will keep you posted on these mold bills and their outcome.