For legal implications, this occurred in Texas (Dallas to be specific). I know laws vary by location.
About 4 months ago, we had a bad rainstorm and water seeped into the bathroom through foundation due to poor drainage near the outside wall. The tenants informed us and we told our contractor to call her and set up a time to go see it. We checked up a few times and he said the tenants had never returned his calls. After a few weeks we kind of forgot about it and let it slip until about a month and a half ago when we had another bad rainstorm and water seeped into the bathroom and bedroom. We got our contractor out there and he has fixed the drainage issue (hopefully - it's always hard to tell until it rains again).
After the second incident, the tenants basically used this as an excuse to break the lease (through Facebook we found out that they had a job transfer, but whatever). In any case, we agreed to break the lease in exchange for forfeiting the security deposit. They moved out a week ago, and we moved new renters in two days later.
Now for the drama...
I just received an email stating that the tenants' young son was hospitalized due to a sinus infection they claim was caused by mold. They sent pictures of a home mold test they did as well as pictures of mold growing on his mattress (his mattress was not on a frame, it sat directly on the floor which got wet during the water intrusion). They want us to now send them the full security deposit back or they will require us to pay for his hospital bills (I assume the implied threat there is they will sue). They claim we were in breach of contract when the water problem wasn't fixed the first time, and technically per Texas law we should also owe them rent for the two months where it wasn't fixed.
So all that said, a few questions:
1. Were we actually in breach of contract? We could probably go back to the lease and say we did not receive written notice of the request for repair (they sent a text message saying there was water leaking, but never asked for it to be repaired even in the text).
2. What would you do in this situation? Even if I'm in the "right", I just want this resolved with the least hassle and cost possible.
3. Regardless of who would win in court, if we decided to return their security deposit, I don't trust that they wouldn't come back and sue at a later date for hospital bills and rent they believe is owed to them. If we had them sign some sort of release of liability, would that ensure we would be done with this for good?
4. I think the mold was probably contained in their mattress, but as it was in direct contact with the floor, would you recommend I do a mold test in the room now that new tenants have moved in?
It looks like you knew about Poor drainage and did not fix it. Draw up agreement that state she will release you of all responsibility, and you return the deposit.
Tough spot. TBH it sounds like a desperate attempt to get money out of you. How much is the deposit? Did she provide a written doctor's opinion saying it was caused by mold?
No legal advice.
Contact your insurance company immediately. They have the duty to defend against this kind of legal claim as part of your homeowner's/landlord's insurance. They will help you determine if you have coverage for this and what the strategy should be for settling this (i.e., go to court or settle).
Contact attorney, though a battle is always better avoided, ive found
@Bryce Y. She didn't provide anything written, but she mentioned the doctor said it was due to fungus. Not sure if I should believe her or not as I've found most things from her have been half truths at best, but she did provide pictures of the mold.
Any advice on how to carry on from here? As a relatively new landlord this is very discouraging. Is this kind of thing pretty common? When we screened them, they came back squeaky clean, but it has been one thing after another over the last year. My other tenants are fine, but so far I've only had 3 sets of tenants and 1 has gone horribly wrong. Doesn't give me much confidence for the future...
Don't pro long it give the deposit back, and it could save you if she took you to court and have a doctors report?
"The tenants informed us and we told our contractor to call her and set up a time to go see it. We checked up a few times and he said the tenants had never returned his calls. After a few weeks we kind of forgot about it and let it slip until about a month and a half ago when we had another bad rainstorm and water seeped into the bathroom and bedroom."
No legal advice.
It does seem like you have some liability. If water was pouring into a rental then that is an emergency not something you set up after awhile to get it fixed. If there is an emergency with your property you have a right to fix it right away NOT when a tenant tells you it's okay 2 weeks later.
I have had a couple of tenants threaten me before. Both times I have just said OK here is my attorneys name and number. We work close with him to make sure we follow all laws. If you feel we are wrong have your attorney contact him and he will get the legal process started. Just remember, if you are in the wrong, your lease states you will be liable for my attorney's fees. If they do proceed, this is what you pay your insurance company for. Let them take care of it.
Disclaimer; I'm not an attorney and not giving you legal advice.
@Andrew Herrig contact an attorney. You need to know the law in your state. Most folks are guessing here. It is possible that if you give them their deposit back they will sue you anyway if they think you can be pushed around. Your insurance company made provide some coverage for this but making a claim may make your rates go up. Go to a professional then go from there.
I agree with @Joe Gore and @Joel Owens
Where you made the mistake was by not taking care of the water intrusion immediately.
She could be BS'ing you. She could be right. Seeing that you dropped the ball I would just pay her the security deposit amount for a release of liability and learn from it.
Originally posted by @Jerry W.:
@Andrew Herrig contact an attorney. You need to know the law in your state. Most folks are guessing here.
Texas Property Code - Section 92.052. Landlord's Duty To Repair Or Remedy
(d) The tenant's notice under Subsection (a) must be in writing only if the tenant's lease is in writing and requires written notice.
§ 92.053. BURDEN OF PROOF. (a) Except as provided by this section, the tenant has the burden of proof in a judicial action to enforce a right resulting from the landlord's failure to repair or remedy a condition under Section 92.052.
§ 92.056. LANDLORD LIABILITY AND TENANT REMEDIES; NOTICE AND TIME FOR REPAIR.
(e) Except as provided in Subsection (f), a tenant to whom a landlord is liable under Subsection (b) of this section may:
(1) terminate the lease;
(4) obtain judicial remedies according to Section 92.0563.
(f) A tenant who elects to terminate the lease under Subsection (e) is:
(2) entitled to deduct the tenant's security deposit from the tenant's rent without necessity of lawsuit or obtain a refund of the tenant's security deposit according to law; and
§ 92.0563. TENANT'S JUDICIAL REMEDIES. (a) A tenant's judicial remedies under Section 92.056 shall include:
(3) a judgment against the landlord for a civil penalty of one month's rent plus $500;
(4) a judgment against the landlord for the amount of the tenant's actual damages; and
(5) court costs and attorney's fees, excluding any attorney's fees for a cause of action for damages relating to a personal injury.
Document everything. Always keep good records as though you were going to court. Don't let this shake you. Be prepared, maintain your properties, address problems as soon as you can, mitigate damages and have adequate liability insurance in place.
You need to know the law better than she does. I don't hire attorneys prematurely, but you may need some good legal advice as to how to respond to her email. Whatever you do, don't use email for your response. Respond only by written letter. If you have insurance, your insurance company will go to the table and fight this for a win in your favor. You do have sufficient insurance, including an umbrella policy don't you?
The security deposit has nothing to do with her claim that your negligence caused her son harm. Don't confuse the two. If the unit had indeed become inhabitable for two months, then there may be a basis for compensation of loss of use, but I would be surprised if that were the case.
I wouldn't trust her photographs. I wouldn't trust her mold test. I wouldn't trust her report that her son's sinus infection was a result of mold caused by your failure not to immediately address the water and moisture problem at the property. Fungus spores are everywhere. Hard to prove cause and affect.
If you don't do it already, every time a tenant moves in I recommend you give them the EPA booklet "A Brief Guide to Mold, Moisture, and Your Home." It teaches tenants how to protect themselves from mold & moisture in the home. Also, periodically inspect your properties and keep an eye out for potential hazards of any kind.
Marcia Maynard, Fischer Properties | Podcast Guest on Show #83
You can do what you want, and you have got some great advice here on BP. I am in Dallas, and I know all the small claim's judges very well, and you have zero chances of winning when a child is involved, and you didn't fix the problem right away. I do wish you good luck.
Mold claims have become a highly litigated area of law over the past few years. As Marcia said, document everything as there could at least be a contributory negligence factor that comes into play based on them not contacting the contractor.
I want to 2nd Marcia's comment about communication. Don't back and forth with the previous tenant via email or text. I'd not communicate with them at all, I wouldn't even respond to the text. I'd talk to an attorney before saying or sending anything. You do have 2 separate issues. The deposit was something they forfeited in negotiations to break a lease. The mold claim is possible negligence on your part.
Unfortunately, tenants (and lots of contractors) know that using the word mold will get your attention and induce fear of lawsuits. I think it's interesting that all they say they want to settle for a serious medical issue is the deposit amount. If they are uninsured their hospital bill is MANY times the deposit amount. If they are insured they may have a deductible they hope to recover from you. Let your attorney advise how to respond, or if to respond at all.
I think the tenant is letting you off very lite only wanting the deposit back. I hope you have insurance if they get a lawyer to sue you.
Let me get this straight, you knew that the foundation was leaking, you knew that there was moisture seeping through the walls and you knew that there was a chance of flooding. You also knew, per the contractor, that nothing had been done to fix it upon original notice from the tenants- and then you let it happen again.
It is your job to keep to keep you properties habitable, not your tenants'. Regardless of whether or not the tenant set up a time for the contractor to come visit the property is not the issue. It is, at the end of the day, your duty to ensure that your properties are safe to inhabit. You failed to do so. The last time I checked, landlords in any state can give notice to enter into a tenant's residence as long as 'proper notice' is given as per state guidelines.
Their son now has a bad sinus infection and they are seeking remedies. The money they are asking for IS NOT their deposit, instead what they are seeking is a settlement in order to not pursue legal action against you for negligence (which resulted in their son's illness) . They may not have said it have said it in so many words, but the implication is there. The amount they are seeking just happens to be the same as the deposit they originally forfeited.
I would not having any further contact with them directly. Instead, I would have my attorney draw up a contract that would exclude them from seeking further damages against you and seeking any other liability. I would give them their deposit back and be relieved that you already have a new tenant in place.
I'm with Joe on this one.
You are talking about 1 month rent OR a long drawn out litigation process.
Part of me will want to stick it to them, as i get sinus infections on the regular and they could be caused by the direction the wind is blowing that day.
But keep in mind, they most likely have very little to lose, you most likely have a lot more to lose. Its one months rent. Negotiate it down, to 75% or half if you think you can, and move on and get the resolution in writing.
The best advice that you got here was to contact your insurance company and perhaps even a lawyer.
There are some issues here that work in your favor.
The tenant moved out and then claimed that their child contracted an infection. Unlike the ceiling collapsing on their child (with obvious injury), it is not clear from the information that you presented that the child contracted the infection from living in your property.
It is possible that the child developed the infection from the new place of residence AFTER vacating your property.
There are the issues that courts and lawyers decided and why insurance companies settle or take the issue to court ... and why you pay insurance premiums.
As others have stated, this is not legal advice.
Originally posted by @Andrew Herrig :
"They moved out a week ago, and we moved new renters in two days later."
In my state a landlord is required to "mitigate damages", meaning, find a new tenant in their place. Seems to me you did mitigate damages and ex-tenant deserves to get their deposit back minus the two days you didn't get rent. This may or may not be the standard where you live, nevertheless, it doesn't seem unreasonable. If it were me, I'd refund the entire deposit and call it a day, but not before I got a signed release drawn up by an attorney.
This mold stuff is blown WAY out of proportion. Every house in America has mold. Plus, there is mold blowing in the wind in the yard and everywhere else.
Lots of ideas and thoughts but, as a longtime landlord having experienced tenants trying about anything, the advice to contact your insurance company I think is best.
The "duty to defend" referenced above is an important value of your insurance policy, and I've certainly seen insurance companies set the lawyers loose on their clients' behalf.
However, your insurance company is going to have to look at the situation like a claim, and it sounds as though what you need right now is a good strategy.
An attorney is the best source for that, with insurance in your back pocket as a remedy if the situation were to become costly.
Thanks all for the replies. Just wanted to follow up and say I got a signed release of liability from the previous tenant, and sent their deposit back to them.
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