Withholding a tenants deposit due to mold?
Member since 2023 · 29 posts · 13 votes
Withholding a tenants deposit due to mold?
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Quote from @Abi Horton:
Quote from @Mike Dymski:
Quote from @Abi Horton:
Quote from @Mike Dymski:
Quote from @Abi Horton:
Quote from @Mike Dymski:
Mold - the sales price should have been adjusted or the items fixed prior to closing.
Appliances - walk the property shortly before closing and don't close if it's missing things or messed up. Your purchase contract should say what is included/excluded...and so should the lease agreement.
The house closed with the tenants in it, I served them notice the next day. So I wasn’t able to do a walkthrough until the tenants moved out which was a month later.
The mold was discovered when the tenants moved out and moved their big pieces of furniture.
It's common/normal to inspect a house with residents in it.
The mold was revealed during the inspection...it's pervasive on the bathroom floor, which means a lot of water and/or a long time period, and would normally lead to a much deeper investigation for damage in the rest of the house as water easily travels.
The mold should have been addressed with the PSA (so no)...and the appliances can be addressed based on the PSA and lease agreement (so possibly...I would think so). I was just trying to answer your questions above and not addressing lessons to learn.
Purchase and Sale Agreement. Called various things around the country, it's the Contract to Buy and Sell where I'm at. This is the master document that determines the price and terms of the agreement as well as timeline, any contingencies, closing, EM, estoppels, appraisal, which appliances and fixtures will convey with the sale and which won't, rent proration, etc. etc. etc.
Unfortunately, nobody can answer your specific question about whether the tenant can be held responsible for damage in this case definitively because the answer could come down to a judges future decision on the matter, after reviewing all the details of the transaction, the PSA/contract, the lease, and hearing both sides. Technically a tenant can be help responsible for not informing a landlord of water intrusion, but in this case you did have your inspection period during which you had the opportunity to uncover any issues, so that would have been the time to conduct your due diligence, and it sounds like they did let you know about the issue at that time. For these reasons, it may be unlikely that you'd be successful in putting this on the tenant. You could keep their security deposit and find out, but sometimes that isn't worth the effort and can even backfire.
Next time move the furniture/ inspect a little more carefully, and get estoppel agreements signed by the tenants that state which appliances, fixtures and furniture are theirs, verify the terms of the lease and any outside "handshake" agreements with the landlord, any issues with the property, etc. Good luck!
33 Replies
- Troy, MI · Member since 2019 · 61 posts · 20 votes3y
@Abi Horton we have found a very good inspector. He costs us $600 per property, but has saved us from several very expensive mistakes.
So e people say we are crazy to pay this much. It is just a business expense. Find a good inspector.
- Member since 2023 · 29 posts · 13 votes3y
Quote from @Steve Ehrman:
@Abi Horton we have found a very good inspector. He costs us $600 per property, but has saved us from several very expensive mistakes.
So e people say we are crazy to pay this much. It is just a business expense. Find a good inspector.
Thank you, I’m not bothered by the cost either if it finds me the things I need. With the additional radon test and sewer scope I paid over $700! But the sewer scope found a blockage so it was worth it. But he didn’t say anything on the inspection about the mold on the bathroom floor. He photographed it but didn’t mention it. That, with me asking the realtor and contractor and neither one of them thinking it was an issue, I trusted their judgement. Hindsight is 20/20.
- If the mold was in the inspection report and the tenants mentioned it to you before closing, then it’s on you to conduct your due diligence and negotiate the sale price or any remedies appropriately before closing. Now that you’ve closed, you may not have much recourse on that one unfortunately. Mold is one of those things that can often be fixed cheaply and effectively, but when a mold remediation company is brought in, it can get expensive quickly. Get several bids.
Quote from @Abi Horton:
Quote from @Steve Ehrman:
@Abi Horton we have found a very good inspector. He costs us $600 per property, but has saved us from several very expensive mistakes.
So e people say we are crazy to pay this much. It is just a business expense. Find a good inspector.
Thank you, I’m not bothered by the cost either if it finds me the things I need. With the additional radon test and sewer scope I paid over $700! But the sewer scope found a blockage so it was worth it. But he didn’t say anything on the inspection about the mold on the bathroom floor. He photographed it but didn’t mention it. That, with me asking the realtor and contractor and neither one of them thinking it was an issue, I trusted their judgement. Hindsight is 20/20.
Regarding the appliances: if the contract states the specific appliances that were there during the showing are to convey with the property, then the seller may owe you those appliances. However, if they weren’t theirs to sell in the first place, then that changes things. The fair market value of the items taken is probably what you would be awarded if you win. The fair market value of used appliances is minimal. You should review the specific facts with your attorney and your agent to determine your legal options, nobody on here can give you good legal advice.
- 3yAlan AsriantsBusiness MemberReal Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
Quote from @Steve K.:
If the mold was in the inspection report and the tenants mentioned it to you before closing, then it’s on you to conduct your due diligence and negotiate the sale price or any remedies appropriately before closing. Now that you’ve closed, you may not have much recourse on that one unfortunately. Mold is one of those things that can often be fixed cheaply and effectively, but when a mold remediation company is brought in, it can get expensive quickly. Get several bids.Quote from @Abi Horton:
Quote from @Steve Ehrman:
@Abi Horton we have found a very good inspector. He costs us $600 per property, but has saved us from several very expensive mistakes.
So e people say we are crazy to pay this much. It is just a business expense. Find a good inspector.
Thank you, I’m not bothered by the cost either if it finds me the things I need. With the additional radon test and sewer scope I paid over $700! But the sewer scope found a blockage so it was worth it. But he didn’t say anything on the inspection about the mold on the bathroom floor. He photographed it but didn’t mention it. That, with me asking the realtor and contractor and neither one of them thinking it was an issue, I trusted their judgement. Hindsight is 20/20.
Regarding the appliances: if the contract states the specific appliances that were there during the showing are to convey with the property, then the seller may owe you those appliances. However, if they weren’t theirs to sell in the first place, then that changes things. The fair market value of the items taken is probably what you would be awarded if you win. The fair market value of used appliances is minimal. You should review the specific facts with your attorney and your agent to determine your legal options, nobody on here can give you good legal advice.
I agree here. If it was in the inspection report and the tenants mentioned that it was an issue, you can't hold them liable. Its the sewer back up.
The only way they can be held liable is if they intentionally caused the sewer to back up and clogged the drain overtime.
Seems like that is not the case. I would count my lucky stars they didn't try to go after you for living in those conditions. I think that they left without causing any issues is a blessing.
Good luck with the repair. address it so it doesnt happen again.
Alan Asriants - New Century Real Estate 591 Reviews - Member since 2023 · 29 posts · 13 votes3yTo clarify, they didn’t say anything about the leaky toilet until we came in and saw the floor was black from mould under the linoleum. This was during the inspection. I closed on the house 5/8 and evicted them 5/9 so they wouldn’t have been able to come after me for their living conditions. Also, per their lease they are obligated to tell the landlord about anything that needs repair and could cause damage to the property, and it actually says the tenant must pay for such repairs.
Quote from @Alan Asriants:
Quote from @Steve K.:
If the mold was in the inspection report and the tenants mentioned it to you before closing, then it’s on you to conduct your due diligence and negotiate the sale price or any remedies appropriately before closing. Now that you’ve closed, you may not have much recourse on that one unfortunately. Mold is one of those things that can often be fixed cheaply and effectively, but when a mold remediation company is brought in, it can get expensive quickly. Get several bids.Quote from @Abi Horton:
Quote from @Steve Ehrman:
@Abi Horton we have found a very good inspector. He costs us $600 per property, but has saved us from several very expensive mistakes.
So e people say we are crazy to pay this much. It is just a business expense. Find a good inspector.
Thank you, I’m not bothered by the cost either if it finds me the things I need. With the additional radon test and sewer scope I paid over $700! But the sewer scope found a blockage so it was worth it. But he didn’t say anything on the inspection about the mold on the bathroom floor. He photographed it but didn’t mention it. That, with me asking the realtor and contractor and neither one of them thinking it was an issue, I trusted their judgement. Hindsight is 20/20.
Regarding the appliances: if the contract states the specific appliances that were there during the showing are to convey with the property, then the seller may owe you those appliances. However, if they weren’t theirs to sell in the first place, then that changes things. The fair market value of the items taken is probably what you would be awarded if you win. The fair market value of used appliances is minimal. You should review the specific facts with your attorney and your agent to determine your legal options, nobody on here can give you good legal advice.
I agree here. If it was in the inspection report and the tenants mentioned that it was an issue, you can't hold them liable. Its the sewer back up.
The only way they can be held liable is if they intentionally caused the sewer to back up and clogged the drain overtime.
Seems like that is not the case. I would count my lucky stars they didn't try to go after you for living in those conditions. I think that they left without causing any issues is a blessing.
Good luck with the repair. address it so it doesnt happen again.
considering they not only didn’t pay to repair this damage to the floor but also didn’t tell the landlord so the problem is now escalated, I feel like they are at fault here…? - Member since 2023 · 29 posts · 13 votes3yI wasn’t made aware of the complete mold problem until the tenants moved out (which was about a month after closing as I evicted them immediately after we closed).
Quote from @Steve K.:
If the mold was in the inspection report and the tenants mentioned it to you before closing, then it’s on you to conduct your due diligence and negotiate the sale price or any remedies appropriately before closing. Now that you’ve closed, you may not have much recourse on that one unfortunately. Mold is one of those things that can often be fixed cheaply and effectively, but when a mold remediation company is brought in, it can get expensive quickly. Get several bids.Quote from @Abi Horton:
Quote from @Steve Ehrman:
@Abi Horton we have found a very good inspector. He costs us $600 per property, but has saved us from several very expensive mistakes.
So e people say we are crazy to pay this much. It is just a business expense. Find a good inspector.
Thank you, I’m not bothered by the cost either if it finds me the things I need. With the additional radon test and sewer scope I paid over $700! But the sewer scope found a blockage so it was worth it. But he didn’t say anything on the inspection about the mold on the bathroom floor. He photographed it but didn’t mention it. That, with me asking the realtor and contractor and neither one of them thinking it was an issue, I trusted their judgement. Hindsight is 20/20.
Regarding the appliances: if the contract states the specific appliances that were there during the showing are to convey with the property, then the seller may owe you those appliances. However, if they weren’t theirs to sell in the first place, then that changes things. The fair market value of the items taken is probably what you would be awarded if you win. The fair market value of used appliances is minimal. You should review the specific facts with your attorney and your agent to determine your legal options, nobody on here can give you good legal advice.
the contract did state appliances convey which the seller signed. Would that be my job to go after the seller or the tenants since he “sold their appliances” and signed a contract saying so? - 3yColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
@Abi Horton not sure if you would get anywhere with the previous owner on appliances at this point. Yes you would need to go after him to get compensated, but it may be difficult. Talk to your lawyer. You could have had the tenants sign an estopel agreement but that usually covers deposits and appliances might have been missed on that too.
You want something here, you either take your chance the tenants will not fight you on the deposit and perhaps win in court or you just move on and rehab the property and get it rented.
Quote from @Abi Horton:
I wasn’t made aware of the complete mold problem until the tenants moved out (which was about a month after closing as I evicted them immediately after we closed).Quote from @Steve K.:
If the mold was in the inspection report and the tenants mentioned it to you before closing, then it’s on you to conduct your due diligence and negotiate the sale price or any remedies appropriately before closing. Now that you’ve closed, you may not have much recourse on that one unfortunately. Mold is one of those things that can often be fixed cheaply and effectively, but when a mold remediation company is brought in, it can get expensive quickly. Get several bids.Quote from @Abi Horton:
Quote from @Steve Ehrman:
@Abi Horton we have found a very good inspector. He costs us $600 per property, but has saved us from several very expensive mistakes.
So e people say we are crazy to pay this much. It is just a business expense. Find a good inspector.
Thank you, I’m not bothered by the cost either if it finds me the things I need. With the additional radon test and sewer scope I paid over $700! But the sewer scope found a blockage so it was worth it. But he didn’t say anything on the inspection about the mold on the bathroom floor. He photographed it but didn’t mention it. That, with me asking the realtor and contractor and neither one of them thinking it was an issue, I trusted their judgement. Hindsight is 20/20.
Regarding the appliances: if the contract states the specific appliances that were there during the showing are to convey with the property, then the seller may owe you those appliances. However, if they weren’t theirs to sell in the first place, then that changes things. The fair market value of the items taken is probably what you would be awarded if you win. The fair market value of used appliances is minimal. You should review the specific facts with your attorney and your agent to determine your legal options, nobody on here can give you good legal advice.
the contract did state appliances convey which the seller signed. Would that be my job to go after the seller or the tenants since he “sold their appliances” and signed a contract saying so?Only a lawyer can advise you on this, you shouldn’t get legal advice on here. However it seems that the time period to inspect and negotiate on the mold was during your inspection window, and the ship has sailed on that. It sounds like you were made aware of the presence of mold by both the tenant and by the inspection report, and you had the opportunity to inspect further, bring in a mold specialist etc. during that time if you wanted to, so I don’t think (just my opinion, not legal advice) that the tenants or the seller can be held responsible now that your inspection period is over and you have already closed. Real estate transactions are as-is and once you’ve already closed your ability to negotiate for repairs or a reduced purchase price becomes a lot more difficult. You’d have to sue for failure to disclose which usually isn’t worth it unless the damages are a lot greater than in this case, and you have clear proof that the seller knew about an issue and actively covered it up. This would be between you and the seller, any lease violations or failure on behalf of the tenant to disclose a leak prior to closing would be between the seller and the tenant. Regarding the appliances: again this would have been easier to address prior to closing. Once you’ve closed, the deal is done. If the contract states that the existing appliances were to convey and they didn’t, then technically the seller owes you for the fair market value of those appliances. This is between you and the seller, as the tenant is not part of the contract to buy and sell. The fair market value of the used appliances is probably not worth suing over, but you could explain the situation to the seller and see if they would be willing to negotiate a solution outside of court. Personally I would send them a letter explaining their mistake, and ask for the fair market value of the appliances. Maybe they will agree, maybe not. You could then perhaps take them to small claims court or something if they don’t, but probably not worth getting lawyers involved IMO as the fair market value of used appliances is very low these days. Good luck!
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