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Iowa Court Decides for Consumers in Moldy Home Case

Posted by Jane Akre
Monday, February 04, 2008 11:40 PM EST
Category: Major Medical, Protecting Your Family
Tags: Toxic Substances, Property Owners Liability, Defective and Dangerous Products

In Iowa, homeowners can now sue and recover from a builder for mold problems even if they are not the original owner.

Image: Mold from Hurricane Katrina


Beverly and Robert Speight knew they had a problem when they could puncture the waterlogged siding on their $250,000 Iowa home with a fingertip.   

It is the unspeakable word to builders, insurers and home inspectors. “M” for mold or mildew—no one wants to cover it or take responsibility for it.

The owner of a moldy home may discover multiple exclusions in the contract with a home inspector or that their homeowners insurance has dropped or capped mold claims. Homeowners often run into a brick wall they have to remedy with their own bank account. 

Just ask Erin Brockovich, of the film by the same name. She had to move out of her California home after mold, found growing in the floor and walls, caused her family's health problems.   

The CDC says there is no such thing as “toxic mold” but mold impacts those with asthma or a compromised immune system. The Institute of Medicine reports allergic and non allergic reactions in humans exposed to spores.  All agree it should be removed.

Now the Iowa Supreme Court has issued a ruling that gives homeowners living in moldy conditions some hope.  Home builders can be held responsible for poor workmanship that leads to mold and mildew from water seepage, long after the original buyer has moved out.

The decision comes from a lawsuit filed by the Speights of Clive, Iowa who filed against Walters Development Company. Ltd. which build the home in 1995. 

The original buyer sold it to someone who later sold it to the Speights in 2000. Instead of  a dream home, the Speights noticed water damage and mold growing.  An inspector found that subpar materials used for shingles and rain gutters coupled with a design flaw and shortcuts in construction allowed the severe water seepage to accumulate on the walls and eventually flood the basement. The previous owners apparently did not know of the defects. 

The Speights filed a lawsuit against Walters in 2003 charging breach of implied warranty of workmanlike construction which says a “building be constructed in a reasonably good and workmanlike manner and …be reasonably fit for the intended purpose,” the court said. 

In other words, Walters was negligent in constructing the home.

The builder challenged the lawsuit suggesting the statute of limitations had passed and any warrantee only applied to the initial home buyer. The company refused to do any repairs.

The lawsuit against the builder was dismissed and the Speights appealed but the state appeals court upheld the lower court decision dismissing the lawsuit. 

Then the Supreme Court ruled in favor of the Speights saying the statute of limitation did not apply because it was based on discovery of damage and not the sale of goods.

"We conclude ... the plaintiffs could not have gained actual or imputed knowledge of the defect in their home more than five years prior to commencing this action, and their suit is therefore not time barred under Iowa Code," the court said.

So far the couple has spent $25,000 on home repairs. Now they are on their way to trial.

The Speights’ attorney Harley Erbe tells the Des Moines Register the decision “is a great victory for consumers, because the fact that many people nowadays are buying homes that were built for somebody else, as opposed to having homes that were custom-built.”

The attorney for the contractor says the ruling could “flood the court with lawsuits” from homeowners and puts a significant burden on builders who are already hurting from the downturn in the home sales.

Some states do not allow subsequent buyers to sue the original contractor. But this case could turn the tide for a growing number of people expected to move into previously owned homes.  #


1 Comment

Posted by Cindy
Tuesday, February 05, 2008 4:49 PM EST

If builders were building houses correctly, that didn't leak and rot almost from the start, they would not have a problem with lawsuits. Many new homes have incorrectly installed materials, even entirely omitted materials. Because these defects are usually contrary to material installation instructions, it voids the warranty. Code violations are also far too common, and also void most if not all home warranties. Bad builders, and those who just drink the industry koolaid and believe these shortcuts to be justified, hope people won't discover problems until too late to act on it. There is nothing affordable about a defective house.

Comments for this article are closed.

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