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

Question

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.

Dave Grosse · Answer

Thanks @Lynn M. 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!

Lynn McGeein · Answer

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.

Dave Grosse · Answer

Thanks for the tips @Travis West ! @Michaela Graham 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.

Dave Grosse · Answer

@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.

Dave Grosse · Answer

@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

George Paiva · Answer

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.

Rob K. · Answer

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.

Michaela G. · Answer

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

Travis West · Answer

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)

Travis West · Answer

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