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Updated over 7 years ago,
Mold discovered - liability to tenants?
So, we are in contract to purchase a SFR that needs a lot of repairs.. cosmetic, updating, repair water intrusion, some exterior walls to be reframed, new roof, etc etc.
Purchase price is $900k, repairs $180k, resale $1500k.
The seller provided - among other disclosures - a MOLD report. They took some samples in the house (several spots, one of them being the kitchen!) and found mold. The report specifies what kind of mold it is.
The tenants have lived there for over 3 years. They paid around $150k in rent during these years.
The mold report is from February 2017.
I do not know if the seller gave the tenants a copy of the lab report. I would hope so.
Our worry is that the tenants try to sue us after close of escrow and try to get the last 6, or 12 or even 24 months of rent refunded. They could claim that told the landlord for several years about the mushrooms growing etc, and ask now US to refund unfairly collected rents.
Is this a valid worry?
How do we protect ourselves?
Ask the property to be turned over vacant?
Ask the tenants for an indemnification?