Inspector found mold. Should I cancel the deal?

Question

The bank accepted an offer on an REO condo in Chicago, but the inspector found a small patch of mold (probably the size of a fist) on the bathroom ceiling. I know 5-7 years ago the HOA paid to patch the roof because there were some leaks, but I don't know if this is related. The unit has been unoccupied for 2 years and the AC/heat was completely turned off.

I know I can remove the mold easily, but am concerned about future value and legal ramifications should the mold grow back. I'm planning on renting it out, and am wondering if it's worth the risk. What do you think?

Cory Kohut · Answer

did the inspector do a mold test?

Unless you do an actual mold test i don't think you would need to disclose in the future, and as Brie mentioned mold disclosures are not mandatory.

Sterling White · Answer

As stated above mold can be taken care of and isn't a big issue. The bigger problem maybe the time frame in which it has been sitting.

Did the inspector mention anything on that matter?

Nino Alfano · Answer

As a contractor point of view the mold is nothing to be worried about. Seems to be everyone has already pointe dour the obvious that there may not be a bathroom van which caused it. Or possibly the old roof leak was the problem they fixed and the mold came during the 2 years unoccupied.

you do not have to disclose to future tenants about mold.

Joel Owens · Answer

I don't like condo's because of the fees and power players wanting to sit on the boards.

A condo sitting for 2 years is a long time. I would think many systems might be shot and need replacing. Once those older systems no longer see daily use and sit for years many die off.

You need to review the condo budget and see if there have been pluses or losses the last 5 years and if the board is constantly changing over ( instability ).

If it is in a bathroom then without a fan could be surface moisture. There is mold and mildew and different types of strains so more harmful than others. You could also not physically see mold but it is airborne at very dangerous levels which is why (air quality tests) are needed.

If the roof was patched over the years and now it needs replacing the dues might be slated to go up soon to cover it.

Are condo's all that is available to invest in your area?? You would have to be getting this very cheap with a lot of upside to possibly make sense.

No legal advice given.

Brie Schmidt · Answer

IL is not a mold disclosure state, so they are not required to use the mold disclosure and it is not an item on the property disclosure.

If there is not a vent fan, that could be the cause, not necessarily from the old roof leak

Michael Noto · Answer

If you are buying a foreclosure that has been sitting for 2 years and your biggest issue is an area of mold the size of a fist I that isn't a huge deal at all. Get it remediated as apart of your rehab and make sure the bathroom has a ceiling fan

Hope N. · Answer

Thank you for your responses! The bank included a mold disclosure form in the final contract. If I remediate the problem, will I have to disclose to future tenants? Or future buyers? Im concerned about both liability and home value.

Lumi Ispas · Answer

@Hope N., if your lender finds out about the mold, it won't give you the loan. On the other side, the seller, the bank might fix the issue if you request them to just fix it, and not ask for credit, as if they receive an inspection report showing mold, they have to disclose to all buyers if the property goes back on the market.

In the same time, if it's not that much mold and the bank denies your request, you should be able to fix the problem very easily and should not be very costly.

Good luck!

Inspector found mold. Should I cancel the deal?

Most Popular Reply