Mold and moisture damage
We assist in disputes concerning housing and real estate transactions with decades of experience
Moisture damage and the resulting mold problem may be discovered in an apartment or property after the sale. Mold problems can occur even if the home was inspected before the sale.
If the residence you are buying or selling has mold problems, or if you suspect that the residence you are buying has construction defects, indoor air quality problems, or mold problems, feel free to contact us. Our lawyers, who specialize in real estate transaction disputes, will examine the situation.
Airakorpi Law Ltd is an expert in disputes related to moldy houses and moisture damage
Mold problems in housing
The root cause of mold problems is moisture accumulating in the building. Moisture is not only harmful to building materials, but under the right conditions it also leads to microbial growth. Microbes, such as mold, produce particulate and gaseous pollutants in the indoor air. People staying in a building damaged by moisture are simultaneously exposed to many different microbes, the toxins they produce, and other indoor air pollutants.
Mold damage is often hidden in structures, making it difficult for buyers to detect before purchase. Mold damage is often detected by its smell or the health hazards it causes, such as respiratory and allergy symptoms. The symptoms are caused by mold spores and compounds secreted by microbes such as mold that are harmful to health. If the symptoms ease when you leave the residence, it is likely that there is mold damage in the residence.
A musty or earthy smell may indicate a mold problem. The smell is caused by volatile organic compounds (VOCs) produced by microbes. As they grow, microbes also produce non-volatile compounds. These end up in the indoor air along with particles released from the growth, such as spores. Many of these compounds are toxic to humans, such as mycotoxins. Examples of toxin-producing moulds that grow on the surface of building materials include Stachybotrys chartarum, Aspergillus versicolor and Trichoderma spp.
Mould problems in new and old properties
As stated above, moisture is always the underlying cause of mold damage, and mold problems are caused by moisture accumulating in buildings. In older buildings, mold problems are caused by moisture rising from the ground, poor sealing of exterior walls, roof structures, and joints, and inadequate ventilation. Moisture problems are particularly prevalent in subfloor and attic structures.
In new buildings, mold problems are caused by construction defects and moisture during construction. Building materials are inadequately protected during construction, allowing moisture to enter the structures.
If you suspect moisture damage or mold problems in your property, contact us
Rot damage
Rot damage refers to damage caused to structures by decay fungi. Decay fungi are microbes, similar to mold. Whereas mold does not actually damage the building materials themselves, rot damage weakens the strength and load-bearing capacity of wood-based materials due to the effects of decay fungi. Mold growth is usually also observed in connection with rot damage, as the development of rot damage requires a higher moisture content than the development of mold growth.
Like other microbial and mold damage, rot damage is a result of moisture. The most common decay fungi found in moisture-damaged buildings are dry rot, and cellar fungus. Dry rot (Serpula lacrymans) is a common decay fungus that causes damage to buildings. Dry rot is usually the result of faulty subfloor repairs.
Radial fungus and earth cellar odor
Radial fungus is a soil bacterium belonging to the actinobacteria family. Its appearance in buildings is a result of moisture in the building, and it grows like mold, forming mycelium and spores. Radial fungi produce an earthy cellar odor as they grow.
No health-based limit value has been set for radial fungi due to insufficient research evidence, but laboratory tests have shown that radial fungus spores are immunologically active. However, the Ministry of Social Affairs and Health has issued reference value guidelines for radial fungi. Microbial concentrations above the reference value indicate a microbial source indoors. Radial fungi are classified as indicator microbes for moisture damage.
Tetrachloroanisole and the smell of old houses
Chloroanisoles are products of microbial metabolism, breakdown products of chlorophenols. Chloranisoles are formed when microbes break down chlorophenols used to impregnate wood. Chlorophenols were previously used in wood preservatives to prevent microbial growth and decay, so the presence of chloranisoles in indoor air does not necessarily indicate moisture damage or microbial problems.
Wood preservatives containing chlorophenols were commonly used between 1930 and 1980. In buildings constructed during these decades, wood structures impregnated with chlorophenols are commonly found in roof trusses and frame structures, among other places. If a sample is taken from indoor air to determine the presence of chlorinated anisoles and these compounds are detected in the sample, it is likely that wood structures impregnated with chlorophenols can be found in the building.
The most common chloroanisole in indoor air is 2,3,4,6-tetrachloroanisole. There are no official limit values for chlorinated anisoles in Finland, and their health effects have not been studied comprehensively. Chlorinated anisoles are best known for the “grandma’s cottage smell” they cause in indoor air, which resembles the smell of mold. The odor threshold for chloroanisoles is very low, and even small concentrations can be detected, although the odor threshold varies between different compounds. The odor easily sticks to clothing, hair, and furniture.
Mold in apartments – liabilities of buyers and sellers
The object of the sale affects which law applies. Real estate sales are governed by the Code of Real Estate Transactions, while sales of apartment shares are governed by the Housing Transactions Act. In addition, when the seller is a business, for example in new construction and prefabricated house sales, the Consumer Protection Act applies when the buyer is a consumer.
Moisture damage and mold problems are usually considered defects in quality. A defect in quality occurs when the property does not correspond to the agreed characteristics or when the seller has provided the buyer with incorrect or misleading information about the property that can be assumed to have influenced the sale. Therefore, the question of liability also has a contractual dimension – what was agreed between the seller and the buyer when the sale was made.
Cases involving mold usually concern liability issues, i.e., the liability of the buyer and seller for defects in the housing transaction. The starting point for the assessment is often the condition of the premises at the time of the sale.
The buyer's duty to investigate
The buyer’s duty to investigate means that the buyer does not have the right to make claims against the seller on the basis of factors that could have been detected during an inspection of the property prior to the sale. However, the duty to investigate does not, as a rule, require the dismantling of structures or the taking of samples, and the buyer has the right to rely on the information provided by the seller about the property. The duty to investigate therefore applies to matters that a buyer acting with normal care should have discovered.
Mold and moisture damage are often difficult to detect without dismantling structures. The buyer has an increased duty to investigate when the condition inspection report indicates the possibility of moisture damage, the condition inspector suspects damage to the structures and recommends further investigations, or, for example, when mold is clearly visible on the surface structures without dismantling the structures. The buyer cannot claim as a defect something that the buyer is deemed to have been aware of at the time of the sale.
Seller's duty to disclose information
The seller’s duty to disclose information applies to information that, if disclosed or not disclosed, can be assumed to have an impact on the sale, i.e., to factors that significantly affect the purchase decision. Among other things, the seller must disclose all facts concerning the condition and characteristics of the property that can be assumed to affect the sale. Unrepaired moisture damage can cause indoor air problems and is therefore subject to the seller’s duty to disclose. Similarly, if the seller is aware of the use of wood preservatives containing chlorophenols, this information is also required to be disclosed.
If the seller fails to disclose moisture damage and thus violates the duty to disclose information, the buyer is often entitled to a price reduction on the basis of the defect or, if the defect is material, to cancel the sale. In many cases, the buyer is also entitled to compensation for their loss, i.e., the seller is liable for damages suffered by the buyer that are sufficiently causally related to the seller’s conduct. However, there is no right to compensation for damages in the case of a hidden defect.
Hidden defect
In real estate transactions, a hidden defect is often referred to as a latent defect. A hidden defect is a defect that neither the buyer nor the seller was aware of and should not have been aware of prior to the sale. A hidden defect is, for example, when moisture damage comes as a surprise to both the buyer and the seller during a condition inspection carried out by the buyer after the sale.
A hidden defect is a quality defect in the property that entitles the buyer to a price reduction or, in material cases, to cancel the sale. According to the Code of Real Estate, a property has a defect in quality if, due to a hidden defect, its quality deviates significantly from what can reasonably be expected from a property similar to the one sold, taking into account the purchase price and other circumstances.
Unlike the Code of Real Estate, the Housing Transactions Act does not mention hidden defects. However, the Housing Transactions Act has a provision corresponding to hidden defects in Chapter 6, Section 11 (general provision on defects). According to the Housing Transactions Act, an apartment is considered to have a defect if its equipment, condition, or other characteristics are significantly inferior to what the buyer could reasonably expect, taking into account the purchase price of the apartment, its age, the standard of fittings in the area, general requirements for a reasonable standard of living, and other factors.
Regardless of the choice of law, the significance of the defect is emphasized in the case of a hidden defect. It must be assessed whether the apartment or property deviates from what can reasonably be expected and whether the deviation is significant.