$557,000 home must be torn down because of mold
Published Dec. 12, 2002
WHITEFISH BAY, Wis. -- In May, Brian and Kaare Lotz bought a $557,000 home,
a perfect fit, they thought, for their growing family.
It had a small yard and needed few repairs before the family moved in.
But it also had a hidden problem - mold.
Now, the family can't live in the house, sell it or have it insured.
Crews were scheduled to begin tearing down the house today, though lawyers
representing the former owners' insurance company and the real estate firm involved
in the sale have appealed the raze order.
Former owner Vicki Schober said she and her husband, Laurence, were unaware
of a mold problem.
Messages left early today for their lawyer, Frederick Strampe, and Edward
Hannan, a lawyer representing Shorewest Realtors, were not immediately returned.
The Lotzes said they have spent more than $800,000 on the house, plus $20,000
on legal fees, and expect to spend $750,000 to build a comparable house on the
That doesn't include the $13,000 in property taxes or the more than $2,000
a month for the house the family is renting.
``I have insurance that I pay a substantial amount of money for, and they've
done nothing for me,'' Brian Lotz said. ``All our savings are gone, and I've
had to take a loan out against my business.
``I can't imagine how devastating this would be for people less fortunate.''
The couple bought the home when Kaare was pregnant. The couple have three
older children. The house was built in 1927 and was expanded in 1991.
Soon after the family moved in, mold began to appear around the master bath
steam shower. When workers popped the baseboard off the bathroom wall, they
saw large amounts of black mold.
John Melvan of Inspection & Assessment Services in Brookfield did a limited
assessment in August and reported that the house had a history of water leaks
and had mold remediation work done in the past - a surprise to Lotz.
Melvan found the contamination extended through more than half of the house,
and he found several mold varieties that he reported could be associated with
allergies, asthma and other ailments, especially for children, the old and those
with compromised immune systems.
The inspection prompted Whitefish Bay Building Inspector Joel Jasper to order
the house unfit for human habitation.
Lotz still hoped the house could be saved. But when the estimates to fix the
home came in at more than $350,000, Jasper ordered the house razed, based on
a state law that mandates demolition if repair costs exceed half the value of
On Aug. 14, Lotz filed a claim with his insurance company, Atlantic Mutual,
which then canceled his policy, citing increased risk because of the toxic mold.
That prompted the mortgage lender, West Bend Savings, to call in the full
amount of the loan, though it also made a similar loan to Lotz's business so
he could keep the house.
Eventually, Lotz's insurance agent filed a complaint against Atlantic Mutual
with the state insurance commissioner, and the insurance was reinstated. Still,
Atlantic has not paid the claim or taken any action against the previous owner
of the house or the real estate firm, Lotz said.
A message left early this morning for Atlantic Mutual was not immediately
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