What Legal Issues Should I Worry About When It Comes to Mold at My Rental Property?

How to avoid tenant rent withholding and other mold-related legal problems.

More than just unsightly and malodorous, mold is a top environmental hazard that threatens a range of legal problems for rental property owners. As a landlord, you should be aware of these issues so you can prioritize mold prevention and remediation. Here's what you need to consider when it comes to mold.

You May Be Liable for Costly Damage Caused by Mold

Mold often grows out of sight, such as behind walls or under floors, and so by the time you discover a mold problem, you may not only have a substantial cleaning bill to handle, but you may need to fix costly structural damage that could threaten the physical stability of your property. Plus, if mold stains or damages tenants' personal property that they store in their apartments, you could be held liable for tenant losses, especially if your actions caused the mold problem or you didn't respond promptly to address a mold problem once it was reported or discovered.

You May be Liable for Compensating Tenants for Health Costs

Although the nature and extent of mold's effects on human health isn't certain, many tenants who claim that mold in their building made them sick have recovered large sums through litigation.

You May Get into Trouble With State or Local Authorities

Some states and municipalities are adding consumer mold-protection laws to their books. If you violate state or local ordinances, you may be slapped with violations or give tenants automatic grounds to bring a lawsuit. For example, tenants in San Francisco can sue their landlords for violating city nuisance laws if the landlords fail to remove mold located anywhere inside their buildings.

You May Lose Rental Income from Frustrated Tenants

If tenants believe you're not adequately responding to a mold problem in their apartments, they may choose to withhold rent, claiming that the mold is making their homes unlivable. Or, they may try to fix the problem and deduct the repair costs from their rent. Although tenants aren't always justified in pursuing such strategies, the result is a loss of the rental income stream that your business depends on.

You May Have a Hard Time Attracting New Tenants to Your Building

If you discover a mold outbreak at your building and don't take steps to fix the problem and update tenants on your progress, it could lead to negative press and potential prospects choosing to look elsewhere for housing. Even if unfair or exaggerated, any reputational harm you suffer from a mold problem also threatens your business's bottom line.

Because there is so much at stake, it's important to try to prevent a mold problem from growing in your building in the first place, as well as take prompt, effective action to remove high concentrations of mold that you discover. For more advice on this, see the Nolo book Mold and Your Rental Property: A Landlord’s Prevention and Liability Guide, by Ron Leshnower.

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