Mold not disclosed by seller on rental duplex

17 Replies

I purchased a duplex (two 2/1 units) in Roswell, GA in July of 2017.  I recently went into the property and the tenant showed me a bunch of mold growing on the inside of the bedroom walls around the North perimeter of the house (two bedrooms) from the floor to about knee high.  The unit has a roof less than a year old and all windows have been sealed well.  It was built in 1962.  

In speaking with the tenants with a translator (they do not speak English), they told me that the previous owner new about it and it had been an issue for many years.  These tenants have lived in the property for over 10 years.  They even told me that the old owner used to pay them to clean the mold off the walls.  They also stated that it is only really an issue in the winter.  In the summer it goes away. It is my understanding that the seller has a legal obligation to disclose this to buyer if he is aware of it.  Is that correct?

I had two mold remediation companies come and look at it and they both said it is due to the temperature variance in the winter from the craw space to the bedroom.  There is no insulation on the floor and the vapor barrier also does not go all the way to the exterior of the house on the side with the issue.  I have not received the quotes yet on the cost for the remediation.

I spoke with my realtor who advised I speak to an attorney, but said the seller has deniability because he did not live in the unit so therefore would not know.  I spoke with another realtor that said my realtor and brokerage should start the conversation with the seller.  My realtor disagreed.  Any feedback on this would be greatly appreciated.  Also if anyone has a referral on an attorney in the Atlanta, Georgia area...that would be great.  This is my for rental property, so I'm just figuring things out.  Thanks for your help!

One other note is I had an insurance adjuster come out to the property.  My rental property insurance for mold has a limit of $2500 with $1000 deductible.  He stated that he believes the type of mold was Aspergillus which is not as dangerous as some other types.  

I gave my tenants 60 day notice not to renew the lease which ends in April so I can get the remediation work done then.

This should have been discovered during the inspection. If you did not have a inspection his is a buyer beware situation. Put your money into fixing the problem rather than wasting it on a lawyer.

The problem is caused by poor air circulation and moisture build up likely caused by the tenants. Provide them with a dehumidifier and make them use it and the winter mold issue will likely disappear. High moisture levels originating in kitchen and bath combined with a tight house is causing condensation to form on the cold wall.

I agree with Thomas on the issue, it's probably due to poor air circulation. Dehumidifiers are a temporary fix, i would check out the hvac system to see how it is working and ventilation in the bath and kitchen.

This is 7 months aftet you bought the property. It all honesty, you wont get anywhere chasing the former owner.  Fix it and move on.

@Thomas S. , I had an inspection done, but this was not discovered.  The tenants clean the walls and it really does not seem to be an issue in the summer which is when I purchase.  Thank you for the feed back.

@Adam Abdel-Hafez , I'm working on finding an HVAC guy to look at it before I start the rehab to see what can be done to improve it, but I don't know that much will because it appears to just have one return and I'm not sure that there is a way to add another one because of the way it is place in a small mechanical closet with the water heater.  Thanks for the advice.  Do you know of any good HVAC guys in the Roswell area?  One of the mold guys is supposed to be referring one to me, but I have not heard back from them yet.

@Russell Brazil , I appreciate your feedback.  I was really hoping for some other feedback as this is going to kill my rehab budget on this project...but I don't want to throw good money at bad either.

Have you contacted the property inspector to ask why he did not disclose the mold on his report?

@Matt Schambeau The duty to disclose depends on your state's laws on the topic.

Here in MA, we are a "caveat emptor" state.  The seller is under no obligation to disclose defects.  

The real estate agent must disclose anything that might influence the buyer's purchase decision - IF - he knows about it.

The exception is if the seller fills out the optional "Seller's Statement of Property Condition".  If something is omitted or misrepresented in that document, the seller may have liability.

Did you not walk the unit prior to purchase? 

@Matt Schambeau , I am also in Roswell and can recommend a good HVAC guy if you are still looking. I just had him inspect my East Cobb property and was impressed with how thorough he was. I know I'll be using him in the future.  He is based out of Cumming but does service Roswell area.   

Edited: BP wouldn't allow me to post his contact info.  Google the company name Climate Smith, you would see his contact info there.

Hey @Matt Schambeau

Here in the state of GA, the seller is legally required to disclose any latent issues with the property. There is an element of buyer beware but it the item can not be reasonably identified or discovered during the course of inspection than the seller is required to disclose, even if they have never occupied the property or have chosen to sell "As-Is". 

If the tenant has any written communication from the previous owner about the mold then you may have some legal ground to recover the expense. In addition, the previous owner may be liable for your legal fees.  

Mold is a function of humidity not temperature fluctuation. A dehumidifier is a must while the tenants are still in the property.

I think your first step needs to be with the tenant to see what you can get from them. Second step would be with a real estate attorney who also handles litigation.  Weissman Law in Atlanta might be a good resource.

Here in the state of New Jersey there are disclosures that the seller must sign in order to list a home. The problem with your situation is that there is no way to prove that the seller knew about the mold unless there’s a paper trail. understand that the seller who to the best of his knowledge knew nothing about the mold. You can try and contact the seller and start communication with the seller but it might cost more than mediating

@Matt Schambeau you should be able to have an insulation company drill holes in the wall and pump it full of foam insulation. Then clean the wall with mold cleaner and preventer. Also look at sources of moisture in the property. Occupants create moisture just from their bodies, not running exhaust fans in the shower, cooking without venting and humidifiers. I have also seen mold collect in bedrooms behind beds or night stands on the wall. The wall is cold and without warm air flow, moisture collects on the wall. Even when the wall is insulated properly, this can happen.

Your tenant could be playing into this issue, so you need to look at those factors. For example, my lease states that bathroom fans must be run and NO humidifiers can be run at the property. You need to educate the tenant on what causes mold, because it is not just cold walls.

As far as going back on the previous landlord, it is a waste of your time. Deal with the problem:

1. Insulate wall

2. Clean mold

3. Reduce moisture sources

I am guessing that your home inspector didn't see it at the time of inspection because it was Summer, and the tenants regularly clean it off the walls.

The fact that the Seller had the tenants clean it off the walls, AND that the Tenants told the Seller about it takes away their ability to claim plausible deniability.

What is your state's law about disclosure?  In AZ, Disclosure of any known material facts is a requirement of the Seller.  So, if this were a transaction in AZ, we would be calling a RE attorney to litigate.

Talk with your agent about state laws.  Every state is different, in mine a mold disclosure is not required.  We do have a voluntary form but it only discloses if it was officially tested.

I had a client buying a 3 unit property and did a mold test as part of their inspection.  It came back will high toxic black mold and we could not say anything to the tenants about it.  In fact, we would get sued for saying anything.  They seller sold it to someone else and I doubt he disclosed it

@Matt Schambeau ; thank you for posting your unfortunate situation. I have learned a lot by reading the thread and have some take-a-ways on how to handle this issue with future tenants. I am in Texas and mold can be an issue at times and with improper care. 

@Ludmila M. , thank you for the referral.  I will reach out to them to see what they say.

I have not contacted the property inspector.  I don't believe he has any liability other than my business.

@Micah Redden , thank you for the feedback and referral.  I will check with the family's son who may have a text about the mold.  If not, I'm sure there will be no written communication as they don't speak any English and the previous owner did not speak any Spanish.  The son was the main point of communication.

@Joe Splitrock , thanks for the info.  You are echoing a lot of the info the mold remediation companies were telling me too.  The mold is worst behind the bed and night stands.  There is stuff on the walls which is feeding the issue along with poor overall circulation.  They suggested insulating the walls too, but said floor first, then ceiling, then walls.

@Cara Lonsdale , based on Micah's response:  in the state of GA, the seller is legally required to disclose any latent issues with the property.

Thank you to everyone for your feedback.  It is helping me getting some perspective on how to move forward.  I'm going to check to see if I have a text with info about the mold issue from the son.  If not, I will probably just remediate and move forward

You are 7 months after the closing here. It will be very challenging to prove that the previous landlord knew about this issue and didn't disclose which it sounds like a lawyer has already told you. Just chalk it up as a learning lesson and get it fixed.

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