IT LOOKS nice from the outside, but the spacious, two-story house on the large corner lot at Ocean and Carmelo is so contaminated with mold that its owners have no other option than to tear it down, according to their contractor, David Stocker. Last week, Bill and Adrianna Hayward asked the planning commission to approve their plans to demolish the house and replace it with a 3,419-square-foot residence, but commissioners sent them back to the drawing board with orders to develop a design that doesn’t interfere so much with the rear neighbor’s ocean view.

Associate planner Marc Wiener said the new house would be larger than most in town because it will be located on a double lot, and the owners get a little bonus floor area for agreeing to merge the two parcels.

Sided with wood and stone veneer, the home would have three floors, though the basement level would be below ground, defining it as a two-story house. The plans also include a 240-square-foot garage, a 385-square-foot second-story deck and a 350-square-foot rooftop deck.

Stocker, of Stocker & Allaire general contractors, told the planning commission Dec. 12 that the Haywards — who have five children and own the local lumber company — had purchased the home with every intention of living there and expanding it to accommodate their large family. But after the first rain, they discovered it was badly contaminated with mold. They hired an expert from Colorado to examine the building and learned the only solution was to demolish it and build a new one, he said.

“It was quite distressing,” Stocker told the commission.

So the Haywards set out to determine how they could build a new “net zero energy house” in a way that would sit well on the property, which is elevated above the street.

“This building will use very, very little power,” he said. “It will sit lightly on the land.”

Stocker acknowledged the new residence would block some of the views from the neighbor to the east but said that’s difficult to avoid on an 80-foot-wide lot. He also said he would work with the neighbors to alleviate any privacy concerns they might have.

But the eastern neighbors said it would destroy their ocean views, deprive them of sunset vistas and reduce their property value.

“This is why we bought this house, why we spent so much money when we remodeled it,” they said. “We really were conscious of the neighbors on each side of us, and of their views.”

Commissioners were sensitive to their objections and suggested the Haywards rework their design.

“Locate buildings so they will not substantially block the views enjoyed by others,” vice chair Michael LePage said, quoting the city’s design guidelines. “This substantially blocks their view. This application needs to be redesigned totally.”

Commissioner Steve Dallas said he’d like to see the home on a single level.

“I would really encourage that, if that’s possible,” he said, and the commission unanimously voted to request Stocker redraw the home.

“I think it’s a great-looking design in terms of how you approached the architecture and so forth,” LePage said. “It just needs to be re-massed.”