Saturday, November 10, 2001

Mold issue will be high on legislators' agenda

AUSTIN - Texas House Speaker Pete Laney took a step toward solving one of the most vexing problems facing homeowners and the insurance industry in the state. The speaker has instructed the House Committee on Insurance to examine all issues associated with mold-related insurance claims.
   This is good news because it allows lawmakers to study the issue and then introduce legislation in 2003 to solve the problems.
   ''Interim studies are vital to the legislative process," said Laney, a Democrat from Hale Center. ''A thorough review of the issues will prepare state lawmakers for the challenges that await us in the next regular session.''
   As they study this issue, lawmakers should take a close look at the state's homebuilding industry and pass legislation that holds builders accountable for shoddy construction that leads to mold problems. A home lemon law - similar to the automobile lemon law - could be the answer and would require homebuilders to buy back faulty homes.
   At issue is the rising number of mold-damage claims filed by Texas homeowners and the soaring costs to clean up the damage. Insurance companies say they can't afford to pay such expenses and some have stopped offering homeowners insurance in Texas. Those that are selling policies predict premium increases for all Texas homeowners unless the standard policy is changed.
   Texas Insurance Commissioner Jose Montemayor is studying a staff proposal to limit coverage to $5,000 per house on the standard homeowners' policy. Under the proposal, homeowners could buy extra mold coverage. Currently, the only limit is that such claims cannot exceed the insured value of the home.
   Homeowners and the insurance industry oppose the proposal. Homeowners don't want a cap on mold-damage coverage and they don't want to pay extra for it. Insurance companies want to exclude mold coverage from the standard policy, forcing homeowners to pay more if they want such coverage.
   During his investigation, Montemayor has heard plenty of criticism of homebuilders. Home inspectors are among the most vocal critics because they see the problems first hand everyday.
   And some homeowners are frustrated because their most expensive purchase has become embroiled in difficult-to-resolve complaints against homebuilders. In some cases, homeowners struggle for years because of homebuilders' resistance and inaction to honor warranties and repair defects.
   Water damage caused by poor construction has forced some homeowners out of their new homes after they lived in them just a few weeks. In court cases, attorneys have shown several types of building materials to be defective, but any product can fail if workers don't install it properly.
   Hold builders accountable
   State lawmakers need to pass legislation that will hold homebuilders accountable for their work. Homebuilders will quickly learn to build quality homes or be forced out of business.
   No one wants companies to go out of business, but homebuilders who construct faulty homes shouldn't be in business in the first place.
   Lawmakers failed to pass a home lemon law last session. State Sen. Leticia Van de Putte, D-San Antonio, introduced the bill but it never received a hearing. The session in 2003 will be different. Lawmakers can't ignore the increasing number of mold complaints, which should prod them to pass legislation.
   ''We have to get through somehow to these legislators that we aren't just griping homeowners,'' said Janet Ahmad, president of the San Antonio-based Homeowners for Better Building. ''This is real. There are homeowners out there that are sick from mold.''
   Homebuilders will strongly oppose the law, but lawmakers need to protect consumers so homeowners' largest investment doesn't turn into their worst nightmare.
  
   Ty Meighan is chief of the Scripps Howard Austin Bureau and can be reached at 512-334-6640 or meighant@scripps.co
  
  

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Ty Meighan is chief of the Scripps Howard Austin Bureau. You can reach him by phone at (512) 334-6640 or by email at meighant@scripps.com.

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