Owners ignoring mold issues at their own peril, Coffey says.

Savvy, experienced negotiators never leave a stone unturned in trying to secure the best deal possible. In fact, they have to or else they could leave themselves and their company open for potential litigation if some major issue or circumstance was overlooked.

In real estate, an emerging issue is taking hold in the halls of Congress and in state houses across the nation, yet many real estate professionals and their legal eagles are choosing to avoid this matter entirely. At their own peril, I might add.

Currently, while the commercial leasing market is rather tepid in many markets across the country, the commercial investment sector in office, retail and industrial properties is hot if not overheated. Yet, in a majority of building sale deals, while the buyer may ask the seller if there are any asbestos issues with the property, most do not ask for an analysis on mold or other bacterial contamination at the building. Big mistake.

In recent years, companies have been hit with multi-million dollar lawsuits and high cost jury verdicts stemming from employees who have been exposed to mold or other microbial contamination. While the media has focused most of its attention on mold contamination in homes, faulty HVAC systems and other infrastructure malfunctions have exposed workers to bacterial contamination and their debilitating effects in the workplace. While there are more than 100,000 species of mold, some of the most commonly found forms are of the species Cladosporium and Penicillium and Aspergillus, according to the New York City Department of Health. Ailments associated with mold include: asthma, hay fever, allergies as well as breathing problems and fevers. One form of mold -- Stachybotrys -- has been linked to allergic rhinitis, dermatitis, sinusitis, conjunctivitis and aggravation of asthma. There has been some evidence, the agency notes, that this strain has also been a cause of pulmonary hemosiderosis, an uncommon condition th at results from bleeding in the lungs in infants.

Numerous Fortune 500 companies have been or are now engaged in assessing mold contamination at their real estate holdings to determine whether any properties in their portfolio suffer from "sick building syndrome." While many commercial investors are doing nothing to investigate indoor air quality issues, major corporations in addition to performing Phase 1 and Phase 2 environmental assessments to check for asbestos, are undertaking air quality studies, looking at the ducts and checking for mold issues so that they don't bite them later on. While no federal or state law currently exist that require such studies to be conducted and lenders do not demand such assessments before a sale closes, these businesses realize that contamination could result in a major financial burden if previous building operation and design issues that might have fostered mold or bacterial contamination were never addressed.

Last year, the Building Owners and Managers Association determined that mold contamination and other air quality concerns were a major issue that needed to be addressed by the real estate industry. Officials with the commercial real estate trade group testified before Congress and have worked with the Environmental Protection Agency and other federal health agencies to address mold policy issues. While the group is also working to ensure that building owners have adequate insurance coverage for mold claims, the organization is also lobbying against federal, state and local initiatives to write new codes and standards regulating indoor air quality and specifically mold and moisture. I believe that despite their efforts, many states and municipalities will pass legislation to cover mold and other bacterial contamination in residential and commercial properties.

With that as a backdrop, I have to say that many prospective buyers of commercial and industrial properties are leaving money on the negotiating table by not requesting a surveillance and analysis of the indoor air quality and a study of whether any contaminants are present at the property. For example, if someone is looking to buy a 500,000-SF to one million-SF building, to adequately clean that property's duct system it could cost $300,000 to $400,000. That's a nice negotiating tool that most buyers in today's highly charged investment market choose to ignore.

Here are some items that should be addressed before a prospective buyer signs on the dotted line. Have a qualified professional perform a remote mechanical hygiene investigation equipped with fiber optic fluoroscopes, flexible fiber optic scopes and robotics. This property study should include the following:

* It is important to investigate the entire air delivery system -- look with fluoroscopes at the ventilation system from a hygienic standpoint, such as the ceiling plenum and interstitial spaces. Conduct a property investigation from an operations standpoint and pay particular attention for moisture events.

* The moisture history of a building can tell an enormous amount about a property. There is technology out there today where a professional can go into a well-maintained 25-year old building that could have had a catastrophic water event in the past, such as a flood, sprinkler system release or plumbing failure, and he can tell you if it happened 15 years ago; if it was. wet; where it was wet; and whether it was domestic water, grey water or black water.

* A probe of the duct system should also include a close look at the condition of the surfaces and substrates to see if they are deteriorating as well as an examination of the filters, drip pans and VAVs.

* In addition to a general study to check for any microbial presence in the system, a study should also be performed to look at the condition of the coils and the ceiling plenums. The reason this is important is if you have air moving past the coils too quickly, because it is old equipment for example, the offices may feel comfortable but the system is not condensing the moisture out and the fiberglass downstream is getting wet which could be a harbinger for microbial or mold contamination now or later.

* A review of the condition of the roof system is in order to see if there are leaks. If there are stained ceiling tiles that is a sign that there may be a problem.

* Unrelated to the mechanical hygiene investigation, but a very important preventive measure that should be taken by buyers is to conduct discussions with tenants to determine if they know of any air quality problems with the property or if any of their workers have experienced some health issues that could be attributed to air quality and specifically moisture in the building.

These are just some of the due diligence steps a savvy investor should implement before they acquire a property. In fact, the cost of the mechanical hygiene investigation could be borne by the property owner prior to sale.

The choice is yours, roll the dice and hope that no problem exists that might leave your firm wide open for litigation down the line, or expand your due diligence process so that the title on your property is clean in all respects.