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Pavel K.
  • Massachusetts
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Selling a Condo But Mold Discovered By Tenant -- Best Approach?

Pavel K.
  • Massachusetts
Posted Nov 4 2019, 14:19

Hi all, I'm hoping I can get advice from those who have dealt with similar scenarios in the past...

A company I work with purchased a 1st floor condo unit that was rehabbed and rented out to great tenants. Once tenants got settled, they started getting severe allergies and health symptoms. They independently went ahead and ordered a mold test and it was discovered that the basement had a significant level of mold as well as mold in the air sample in their dining room (which is located right above the basement). There are 3 other units in the building with residents living there, and they do not experience issues. This tenant did though.

Their lease was mutually terminated and they vacated the premises 3 weeks after moving in. Upon lease termination, a waiver was signed that releases all parties against any claims or liabilities.

According to the inspector, it is believed that the mold is traveling up to their unit from the basement via the basement door which is accessible from the dining room which is inside the condo unit.

Ultimately, the property management company working for the HOA has been negligent in addressing various leaks in foundation, and visible mold in the basement. As a result, this led to over $4,000 in losses for the property owner as the rent had to be returned and tenants had to be moved away from the unit. Numerous e-mails with direct communication has been documented over a period of 2 months regarding concerns with the basement, in which property managers didn't take any action to address.

So now, there's a mold report and knowledge of it -- therefore when selling the property, this must be disclosed.

The way I see it, here are the options:

Option #1:

Block off access from the condo unit to the downstairs basement completely to avoid mold coming through the cracks -- seal it as much as possible. 

Hire a professional remediation company to treat the unit itself (but not the basement - since HOA is responsible for this undertaking).

List the property on the market, and disclose that mold was found in both the unit and in basement but the unit has been remediated, with proof of lab testing results + mention that the basement remediation is in progress and HOA is aware of it.

The goal is to assure the buyer that the unit has been "treated", as there is no reason for buyers to go into the basement.

Option #2:

File a claim against the HOA's master insurance policy for negligence and lack of maintenance to the common areas (basement) and go through this process until it is hopefully resolved. Hold onto the property and try to recover losses and hold onto the property until that's done.

Option #3:

Do not attempt to remediate the unit or do anything else. Just list the property for sale as is and disclose the mold situation.

Option #4:

Get a lawyer and sue the HOA for damages and risk losing lawyer fees. May not be worth it.

Any of you guys experienced similar scenarios?

What is the best way to sell the property and avoid turning off buyers, knowing the fact that addressing issues in the basement is an unknown situation... since HOA is responsible and has been negligent?

Is there a better option?