Severe Mold Damage - My responsibility or tenant's negligence?

General Landlording & Rental Properties
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Severe Mold Damage - My responsibility or tenant's negligence?

Dave Grosse
Wholesaler · Belleville, IL · Member since 2009 · 206 posts · 44 votes

So here's my very first horror story of landlording if you'd like to call it that.

Tenant says she never goes into the basement because she doesn't have anything down there and thus has no reason to go. Two weeks ago she wanted to turn her furnace on but it wouldn't kick on so she went to the basement to see if the pilot was out.

When she attempted to open the basement door she found it practically swollen shut, but was able to push it open. She says when she got it open it was like walking into a sauna! Water dripping from the stairwell ceiling, very damp and that she thought she heard running water but didn't venture down there to check anything out and called me instead.

So I leave work and rush over there to find a basement FULL of MOLD!!!! EVERYWHERE - stairs, windows, ceiling, doors...and a lot of it. In some places it looked like roasted marshmallows stuck in spiderwebs.

Naturally I looked for the water and it turns out that the pressure relieve valve on the water heater had busted and water was running out of the water heater I'm guessing for at least 6 months. Bid from mold remediation company was $4000-$5000 for cleanup. I don't have that kind of cash laying around at this point and the remediation guy told me their process which just so happened to be exactly what I had found here on Bigger Pockets anyway, so I decided to take care of it myself.

My question after all that is - is this negligence on the part of the tenant? I'm not looking to charge her for any of it at this point, but I did credit her a few days rent while she was out of the house for me to Clean the basement up. I would think a judge would probably rule in her favor, but I just want to get some input for future events that may come up. The lease doe s not make hr responsible for any repairs.

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Lynn McGeein
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
12y

Yes, we've also learned that tenants don't care about or report issues that don't directly affect their lives, and property managers don't have the same investment as the owner does, so they don't usually notice things until it actually becomes a problem.

Wanted to add that since you did the work yourself, you may want to invest in an inspection to certify it's been dealt with (if you haven't already), especially if tenant has children in residence.

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  • Edward Burns
    Rockford, IL · Member since 2013 · 330 posts · 62 votes
    12y

    I do not think you can blame tenant. I do not go down the stairs into my basement frequently (maybe once every 2 weeks).

    I assume the property does not have central air. If it has central air, why has not the furnace filter been changed at least every 3 months? If you replace the furnace filter regularly, you can inspect the property. If you have the tenant replace the filter (you provide the filter) you would still have someone in the area that might spot problems (HW heater, busted window, dripping pipe, etc.) and prevent or mitigate problems such as this, and help your HVAC live longer too.

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    12y

    This is a tough call. My lease says the tenant must notify me promptly of any issues or they can end up being responsible for damage. Water is specifically mentioned.

    OTOH the tenant can't be expected to be inspecting the house periodically to look for problems. If you request the tenant to pay for this they're just going to laugh.

    This is a big red flag. Sorry, but if you want to be in the landlord business, you really MUST have this sort of cash laying around for just this sort of situation. This sort of thing does happen. In this case it sounds like you were lucky and were able to remedy the situation yourself. It may not be done. Mold is a scary thing and your tenant may come back to you and request testing or additional work to prove you're not putting them at risk by doing this yourself.

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  • Dave Grosse
    OP
    Wholesaler · Belleville, IL · Member since 2009 · 206 posts · 44 votes
    12y

    @Edward Burns Yeah I'm kicking myself for not inspecting regularly - lesson learned!

    and @Jon Holdman I agree about having reserves around for emergencies - its not been my intention to be a landlord, I just fell into this one. Other than this its been very smooth sailing, and like I said above I learned my lesson and will be performing monthly walkthoughs from here on out.

    Thanks for the repsonses guys

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  • Lynn McGeein
    Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    Yes, we've also learned that tenants don't care about or report issues that don't directly affect their lives, and property managers don't have the same investment as the owner does, so they don't usually notice things until it actually becomes a problem.

    Wanted to add that since you did the work yourself, you may want to invest in an inspection to certify it's been dealt with (if you haven't already), especially if tenant has children in residence.

    1Reply
  • Dave Grosse
    OP
    Wholesaler · Belleville, IL · Member since 2009 · 206 posts · 44 votes
    12y

    Thanks @Lynn McGeein I have in fact lined that up. I'm just thankful it wasn't black mold and that it was confined to the basement.

    At the end of the day I'm actually very happy with the situation - it was a great learning experience, no one was harmed, my house is still standing and bringing in checks, I learned how to remove mold, and now I get to share my mistakes with BiggerPockets and hopefully prevent someone else from making the same mistakes!

    1Reply
  • Andrea M.
    Real Estate Investor · Hampton, VA · Member since 2012 · 562 posts · 109 votes
    12y

    Just wondering if this situation could of been an homeowners insurance claim?

    0Reply
  • Dave Grosse
    OP
    Wholesaler · Belleville, IL · Member since 2009 · 206 posts · 44 votes
    12y

    @Andrea M. I WISH! I at least have a home warranty that covered replacement of the new water heater, but no insurance company that I know of will cover mold damage.

    0Reply
  • Sean Kuhn
    Minooka, IL · Member since 2013 · 353 posts · 85 votes
    12y

    Most basements should have a dehumidifier. I would highly recommend putting one in your basement that drains directly into the sump pump.

    0Reply
  • Travis West
    The Woodlands, TX · Member since 2013 · 87 posts · 40 votes
    12y

    it is really easy to come in after the fact and say "you should have ..."

    My suggestion is to consider adding water spill/overflow shutoff switches in key locations. They are usually available in big box plumbing departments or certainly online.

    When a spill of water reaches a floor, it (the water) completes the connection for the switch (which is connected to a valve) thereby shutting off a home's water supply.

    In that case you have an inconvenienced tenant calling because they don't have water versus the alternative that you've experienced.

    I don't think that they are too expensive but may need to be installed by a plumber.

    Just my 2-cents worth.

    Travis

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  • Travis West
    The Woodlands, TX · Member since 2013 · 87 posts · 40 votes
    12y

    Dave.

    The presence of a black colored mold is not really the issue.

    A basement full of green, gray, or blue fuzzy mold can be just as harmful as the black stuff. All molds create toxins - to combat other molds that might "invade their turf." The poor sad black stuff has gotten a bad name by the press. It is no worse or no better than many of the others.

    Just because it isn't black does not mean that you don't need to respect it and be cautious when removing it.

    Travis West

    CIEC (Certified Indoor Environmental Consultant)

    MAC0325 (Licensed Mold Assessment Consultant, Texas Department of State Health Services)

    0Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    12y

    Who was paying the waterbill all that time? Shouldn't there have been a major increase, if this had been running for months?

    0Reply
  • Dave Grosse
    OP
    Wholesaler · Belleville, IL · Member since 2009 · 206 posts · 44 votes
    12y

    Thanks for the tips @Travis West !

    @Michaela G. great question! Tricky answer...the water bill is combined with mine(my primary residence is right next door) and has been high since we took over the property. Tenant said the previous owners had always paid the water, sewer and trash bills and didn't require any payment from her so we agreed to continue to honor their agreement. BIG MISTAKE that will NEVER happen in my investing career again.

    We moved in and took over paying the water bills last february so I am assuming the water heater had started leaking right about that time. The basement was dry when we did our final walkthrough before closing though - just a tough break for us.

    I AM curious to know why she didn't report/notice a drop in water pressure though...but as I said I'm just happy that experience is over and that I still have a happy tenant paying rent on time every month.

    0Reply
  • Rob K.
    Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    Doesn't this basement have a floor drain where the water trickling out would find it's way? Every basement that I have has a drain somewhere in the lowest point and the water would go there. Pressure relief valves are notorious for dripping, but I've never heard of one busting open. Didn't your tenant hear anything? Major water leaks are usually loud.

    0Reply
  • George Paiva
    Investor · Milford, CT · Member since 2012 · 592 posts · 285 votes
    12y

    Is this a duplex? or a separate house? I would look into putting a separate meter if it becomes an issue down the road if its a separate house. Otherwise just price it into the rent.

    I would also suggest leaving a dehumidifier down there running for a few weeks just to dry out the space. Or at the very least leave windows and/or doors down there open. You'd be surprised in a few weeks mold will be all back.

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