Mold/Mildew issue uncovered after 3 months of purchase

[Vikram Aryan]

Hello,

Thank you in advance for the support this community offers to new investors such as myself.

We purchased a 8-unit multi-family property in Q4-2019. During the purchase process, we only got access to 2 units for inspection. Fast forward to Jan-2020, one the units (which was NOT inspected) were vacated by the tenant stating that there is mold/mildew in the shower. Note that this is ground level unit and there was a theory at first that external moisture is causing it so we tried to work with the HOA. One thing led to another, we are now uncovering that the mold/mildew build-up is substantial and has spread to the adjacent closet. We are now told that the Shower Pan Liner needs to be replaced, for which we received a quote of $10k!

Few questions:

• >> Is this something homeowners insurance will cover?
• >> Is there a disclosure for mold/mildew that we should have asked for at the time of purchase(just like we do for lead paint)?  Can we go back to them now?
• >> Given that the root cause is bad installation, would the HOA share/cover the cost?
• >> Finally, I know we let the tenant off the hook already, but should we have held their deposit?

Any advice will be much appreciated.  TIA!