Pain tenants, and mold, please help

[Justin R.]

Looking for advice....Nightmare situation and tenants.

Hello All, I rehabbed a beautiful house in Southern Ca and recently rented it out Aug 1st. In the first month of the tenants residing my property manager has received 12 emails, each with numerous complaints and requests. Each of these request have been ridiculous and denied. An example of a few...."Please have chandler moved 3 inches so it fits over the center of our personal dining room set." "One fence post has faded to a different shade than others and we would like it repaired." "Have mature fruit trees removed because they could potentially drop fruit and attract rats." Keep in mind, this is a beautiful house and just remodeled far beyond a typical rental quality home.

Moving on...The day they moved in, and the same day there is a leak with the washing machine drain line. The house has been there for 40 years and the drain line happens to have its first leak the day they move in. The washing machine is in the garage, backing the drywall of the kitchen area. The leak floods the kitchen. Immediately when my property manager notifies me, I have my contractor head over there. He instantly pulls up the new flooring, and removes cabinets in the area, and removes the drywall around the leak. Within 5 hour after the leak, this is being done, and there are fans blowing the area to dry it out. I have it fully repaired within 72 hours.

Last week the tenants contact my property manager and tell them they want a mold report. Going on the side of playing safe (and living in CA) we immediately order one. The mold inspector tells us that its difficult in rentals because there is usually ALWAYS some small amount of mold coming back in the report, which it hard for tenants to understand.

The report came back and stated there are small amounts of potentially toxic starchybotrys. How should I proceed? should I share the report?

Thanks in advance!

[Dennis M.]

@Justin R. Dang that sucks .. I would use a “happy clause “strategy on these idiots .

[Justin R.]

@Dennis M. Please define? Like cash for keys?

[Dennis M.]

Basically You confront the tenant tell them “ I’m sorry it appears you are not happy with the rental I have a happy clause which allows you to walk away from the lease free and clear because it is not a good fit for you . “ 

[Sam Shueh]

Ask they start looking and end the lease quickly. In CA it is 60 days. 

[Justin R.]

We are going to be asking them today if they desire to leave. That would be by far the best situation possible. My manager is pretty confident they will not take the offer based upon past conversations. Will I be responsible for displacing them, hotel costs, food, and eating their loss of rents ($3200 a month)? I'm already figuring the mold remediation is going to cost a fortune after talking to some companies, not much the repair after mold remediation, and hopefully no litigation to follow. One attorney is advising to not show the tenants the mold report. He said that is giving them a gun which to shoot you (figuratively of course). Any advice is greatl appreciated Thank you

[Reggie Maggard]

@Justin R. I might seek a second opinion. You didn’t maliciously do anything. It is what it is. There was water damage, you were all over it, and got a air quality report. I would lean toward telling them in the event that they are (or think they are) in danger.

[Stephen Brown]

I totally agree with @Dennis M. I had a tenant like that and every month it was something else. Basically I feel they wanted me to offer them a cash prize to stay - which I never do. Finally I offered them the happy clause (I like the name).

There is one concern, lawsuit. Was the mold test an air quality test - or did they find actual mold? 

When I have had them done, they have taken the air quality outside and inside. Then when comparing the 2 it shows whether there is a problem in the house or it is normal for the area. 

If they found actual mold on a surface then remove it. More than likely, if it goes to court, the report can be demonstrated that it is insignificant and not present long enough to cause health problems.

If the tenants asked for a report, and they know that you did it, then they will ask for it. If you don't give it to them then they will think you're hiding something.

Either way, I would offer them the happy clause, and get a refund of your tenant placement fee you paid.

Whenever they exit, get them to sign a form that absolves you of any liability, like the ski resorts use. It really won't stop them but it may make them think they can't.

[Elenis Camargo]

@Justin R. That's terrible!! I agree, offer them cash to leave. Even try to help them find a new place if they are willing to leave. It's only been 6 weeks and it's this bad already then imagine what is coming next. I'm not sure how many properties you have but I would advise not to jump at everything that a tenant asks for in the future. I would not have done a mold report unless there was clearly visual signs of mold. I am currently renting myself since I live in super pricey NYC (I invest in Jacksonville) and I'm doing a mold kit myself because there was a flood in the basement and I want to be safe. I would not dare ask my landlord to do this for me. They are asking way too much of you with those other ridiculous requests. 

Also just wondering why you have a PM in the first place? You seem super involved in all requests and like you're managing your own property. Just a thought  :)

[Ned J.]

There was small amount of mold.....in a 40 year old building..... HOLY CRAP..... better burn it to the ground and start over!!!

Id like to see a single report on a 40 year old house where they didn't find any mold....show me one. Show mw one from any house older than a couple of years where a company cant find ANY mold. Mold is everywhere.....you breath it and eat it EVERY DAY OF YOUR LIFE....99.99% of it is totally harmless

I would want very clear documentation from the "mold company" about what the report actually means... what is the extent and human risk. Get multiple opinions if you need to back things up. You need clear interpretation of what the report MEANS....not just "mold present". And be careful that the mold compmay isn't just trying to get big $$ out of you for work that isn't needed.

Bottom line....these people need to go..... even if you get by with this issue, the writing is on the wall..... they will drive you insane....part companies now while they are not deeply embedded in your property

You could even say the "mold remediation" requires you to do extensive work and it cant be done with occupants.....so for their safety, you will let them out of the lease....get them out.....and then clean a few things up and start fresh

[Jack Bobeck]

I'd ask your attorney legal advice, because this issue of mold is headed down that path of lawsuit. We all know it, an ambulance chaser will be sending you a notice soon. They have a lease with you and may not leave until its over. Look at your lease, what does it say in terms of "requests from the tenant", the lease should spell out what you do, what they do and who pays. I always try and get a renter to pay the first $50 of any contractor, it cuts down on the amount of calls. But check with your real estate attorney to find out what is legal and not and get a good strong lease for your properties. It will save you some day! 

[Caleb Heimsoth]

@Justin R. I would politely tell your tenants to pound sand. Doesn’t matter how you do it but they need to stop with the incessant emails or leave

[Justin R.]

I appreciate everyone's help on this. I'll update as this proceeds. I'm going to hope that my property manager has success enticing them to leave on their on accord. I really like the verbiage of the "happy clause." Thanks to all!

[Matt K.]

why does this even get you and why is it not handled by your prop mgmt?

[Yolanda Eiland]

I have a question @Justin R. could the tenants have intentionally or accidentally caused the leak. Is there anyway you can find out what caused a leak. It just sounds so suspicious. Then they request a Mold test shortly afterwards. Sounds like they've done this before. 

[Steve B.]

@Justin R. The mold remediation company just reported mold? The fox also just reported the henhouse is fine. This is like that contractor who just posted that paying a contractor $2300 to install two water heaters isn’t insane

[Scott Weaner]

Mold is a scam. We have mold in our house. Everyone has mold in their house.

Move a chandelier 3"? That is priceless.

[David Wright]

@Justin R. Contact a real estate attorney just to be safe and present to him what you have on this post. In the future to avoid any tenant headaches I would consider owner financing which has many similar benefits to rentals without the headaches of managing tenants. Of course there are pro and cons to each strategy but peace of mind is priceless and that is why you may want to consider the owner financing option vs the landlord rental option. Hang in there it will get better!

[Justin R.]

@Stephen Brown & @Steve B. There is no visible mold anywhere. This was a 2 sample collection, one inside and one outside. The inside sample showed higher levels of mold than the outside. The summary came back saying the levels were "low" but the spore Stachybotrys "could cause a health concern. You may have a point about the legitimacy about the report since they also do remediation; but for the sake of civil liability, I now know this information, and feel that if I played it off I would be heading down the road to liability.

@Elenis Camargo & @Matt K. I indeed use a property management company (even though I'm local). My PM was initially shielding me from many of the frivolous requests made. Eventually they started including me on the conversations as the situation turned into a one which has potential health and legal ramifications. I had agreed with their decision to get me involved, do you feel different?

@Caleb Heimsoth unfortunately in CA I cannot just tell them to pound sand. My PM is drafting a letter as we speak. Ill share it to get all of your opinions before we send.

Thanks again to all!

[Matt K.]

Get you involved sure, but the should provide guidance how to manage it that's part of the value they should be providing. 

Also could this be an insurance cliam due to leak?

[Justin R.]

Below is the draft email which my property manager has proposed after talking with my wife and myself. We have decided not to offer sharing the mold report, but if they ask we will send them a copy. Also, I contacted my insurance (USAA) and they do not cover mold. Please let me know if you have any suggestions on the email before we proceed. You all have been great!

Tenants,

We have received the mold test results and there is one strain of mold that is registering at low levels that needs to be remediated. This remediation will need to take place while the property is unoccupied. You will be temporarily displaced during any remediation. In my experience with remediation companies they can take up to several months to remediate, hopefully quicker but it's not a fast process.

The owner wants to take care of the problem ASAP. This presents you with several options to explore. Here are the options;

1. The owner is willing to let you break the lease and move without any penalty. It is clear to us that you aren't happy with the home and perhaps it's not a good fit for your family. The work could take several months and with the rental market softening you could easily find another home to live in that would be a better fit for you guys. The owner has informed us that they will not be making any of the changes you have requested on the punch list of items you provided, nor will they be granting permission for you to make the changes at your expense. They don't want to lock you into a lease when the property is not what you need for your family. This option will allow your family to put this inconvenience behind you and allow you to move on the quickest.

2. You temporarily relocate to a hotel or other living arrangement while the remediation work is being done. You would be entitled to prorated rent during the time you are unable to occupy the home, this arrangement is outlined in the lease agreement, on page 5 item #27. When the work is complete you move back into the home.

Please let me know what you decide.

[Caleb Heimsoth]

Originally posted by @Justin R.:

@Stephen Brown & @Steve B. There is no visible mold anywhere. This was a 2 sample collection, one inside and one outside. The inside sample showed higher levels of mold than the outside. The summary came back saying the levels were "low" but the spore Stachybotrys "could cause a health concern. You may have a point about the legitimacy about the report since they also do remediation; but for the sake of civil liability, I now know this information, and feel that if I played it off I would be heading down the road to liability.

@Elenis Camargo & @Matt K. I indeed use a property management company (even though I'm local). My PM was initially shielding me from many of the frivolous requests made. Eventually they started including me on the conversations as the situation turned into a one which has potential health and legal ramifications. I had agreed with their decision to get me involved, do you feel different?

@Caleb Heimsoth unfortunately in CA I cannot just tell them to pound sand. My PM is drafting a letter as we speak. Ill share it to get all of your opinions before we send.

Thanks again to all!

Obviously follow the legal proceedings of your state.  I just like that saying  

[Justin R.]

@Matt K. My insurance (USAA) doesn't typically cover mold. They said they only cover if it pertains to another covered claim, and caps out at 2k. Apparently 1k of that goes to the cost of having a hygienist determine the cause, and I have a 1k deductible. With this current situation that would only be a drop in the hat compared a worst case scenario.

My PM has been giving me advice. They are unfortunately in a similar situation with another investor/tenant which has gone south for the investor. The investor did no negligence, and is still on the hook with huge legal fees; not including remediation costs.

[Elenis Camargo]

@Justin R. In that case, makes sense! Best of luck to you. I hope you can get them out of there soon.

[Joe Splitrock]

@Justin R. I don't like the letter that your PM plans to send. It is too wordy and you are putting things in writing that could hold you liable. Have your attorney read it. 

I would just have the PM talk to them verbally and let them know they are free to leave at any time. I would just say, "If you don't like the property for any reason or feel there is some health concern, then we will release you from your lease without penalty." Based on their picky request like moving the light, these people will be nothing but trouble. 

NEVER hire a remediation company to do mold testing. Get a second opinion and hire a property inspection company to do the test - one that has no remediation business. Make it clear to them up front that there is no visual signs or reported health issues, that you have a paranoid tenant you need to satisfy. That way they don't do the testing with a bias that there is a problem.

[Kyle Schlosser]

@Scott Weaner Not too far off from the Radon test I had on a previous residence I sold. It conveniently was 0.1 pCi over recommended. They submitted the test results with a $1,000 remediation quote.