MINNEAPOLIS – December 23, 2008 (Insurance Journal) -- On the surface, Michael Ring's business is about finding mold in people's houses and getting rid of it.
But shortly after he started Moldex eight years ago, Ring discovered he's actually in the education business. He's seen plenty of horror stories involving mold in Twin Cities-area homes -- leaky windows that let water into walls, or basements surrounded by a water table that's just above the floor level and itching to get inside.
He spends a large chunk of his time explaining to homeowners whether they need to worry about potential problems, and why.
Inspections are a major part of Moldex's business now, and Ring said he's frustrated that about 70 percent of those inspections occur after people have moved into a home.
"I see all of this after the fact,'' he said. "I want consumers to take control of the situation.''
Ring has been in the cleaning business for 30 years. He started with carpet cleaning, then moved into structural drying -- the moisture-removal work that has to quickly follow flooding or other water damage to avoid mold formation.
Eight years ago, he got into the mold-removal business, around the time it was a hot topic in some areas of the Twin Cities, including Woodbury. Many of that city's stucco homes built in the 1990s proved susceptible to water intrusion, which slowly destroyed walls and building materials. While demand for inspections and remediation contractors was high as more damaged houses turned up, "it was litigious, and nobody wanted to touch it,'' Ring said.
Minnesota law requires home sellers to disclose problems they're aware of. But that leaves a lot of room for legal wrangling when damage is discovered after a sale closes.
When Ring branched out from the carpet cleaning business, he found referrals for mold-related work from real estate agents and building contractors. He obtained certification for mold-related work, taught a continuing education course for contractors on mold remediation and made contacts that led to more work.
Moldex's team of four employees is set to do about $700,000 worth of work this year. The company frequently runs up against other companies when competing for a bid on damage repairs, but much of Ring's work now comes through referrals.
His company's crews arrive in unmarked vehicles, as clients have indicated they're sensitive to the neighbors knowing they have mold issues.
"They might say, 'All of the neighbor kids play at our house,' and they don't want to lose that,'' he said.
The inspection part of the business takes up more of Ring's time than remediation work. Beyond the visual review, inspections can involve high-tech moisture meters, or pin-prick-size holes in walls, using sensitive equipment to get a sampling of what's inside.
Often, what Ring finds isn't pretty. Some people are tipped off by black spots on a wall or a persistent smell of mold. Ring notes that when mold dries, the smell may go away.
"Mold goes from a living to a dormant state and back again,'' he said. When the moisture reappears, the smell can return quickly.
And the smell isn't the biggest problem. There was a Forest Lake home that had so much water seeping into a ground-level room that mushrooms were growing in the carpet.
A Como Park neighborhood home Ring was called to inspect ended up needing $35,000 worth of water-damage repair work, and the home's recent buyers were able to nix the deal.
But those expensive nightmares aren't the norm, he said. Moldex's average remediation job runs $1,500 to $3,000 if the problem is in one area of the home. A recent, larger job involved about $8,000 worth of repair.
As the housing market has slowed nationally and the number of multiple bids on homes has declined, buyers have found they have more clout with sellers.
"A good, competent home inspector can come in and do a visual inspection to evaluate the entire structure,'' said Rachel Adams, a remediation technician with the Institute of Inspection, Cleaning and Restoration Certification, a national independent trade group. "They can give you a feel for, do we need to take this project to a different level?''
Damage found after a sale doesn't have to be a legal issue, depending on the nature of the problem, she said. If it's clear that water had been getting into a house for a long time and damage is extensive, situations can get complicated.
"Poor construction is the number one reason I get called in,'' Adams said, and most of the homes are five to 10 years old. The problems are often windows or doors improperly installed, or poorly sealed exterior brick that traps water in the walls.
The spiraling Twin Cities real estate market may be contributing to some additional business for Moldex. Ring said he gets five to 10 calls a week now related to foreclosed properties.
Buyers want them checked out ahead of time so they can factor any needed repair work into a bid.