Mold Issue Backlash?

Question

Tenant informed me of mold issues and I put him up in a hotel room immediately and took care of the problem. Took about 2 weeks from start to finish. The mold was caused by the AC unit which leaked water. Tenant did not notice for months and mold formed. Fast forward a few months and tenant lost his job and stopped paying rent. He moves out without paying 3 months of rent. Now property manager is telling me to move on and not bother going after the tenant for the lost rent since the tenant might start complaining (faking a cough or health issue, etc) about the mold issue from months prior. He said the tenant can always sue me for a mold related health condition.

This doesn't sound right to me since I took care of the problem ASAP when reported. Any truth in what my property manager is telling me? Lost rent is about 6k (2k a month). Thanks

This doesn't sound right to me since I took care of the problem ASAP when reported.  Any truth in what my property manager is telling me?  Lost rent is about 6k (2k a month).  Thanks

Mark H. · Answer

If the tenant was making $70k, theyre likely to get another job & become collectable.  Id get the judgement, youll have years to collect on it.

Jon Holdman · Answer

Fire your PM.

Jon Holdman · Answer

Well, I'd start by firing this property manager.  An eviction should have been started ASAP when the tenant started being late.  What was the PM doing to get the tenant out as soon as the rent stopped getting paid?

Anyone can sue anyone else for anything.   If you think the tenant has assets, pursue them.   Many don't, so its a waste of time and money to mess with it.

Mike H. · Answer

It seems like the PM is just using the mold as an excuse for continuing to fall for the tenant's stories. I manage my own rentals and I understand falling for the stories every now and then. I can't tell you how many times I've heard people had car troubles and thats why their rent was late.

One of my favorites was when they claimed their purse was stolen while they were paying for gas at a gas station - and the money order for rent was in their purse.

That being said, whats the point of having a professional PM if they're going to fall for the stories too?  I would sue the PM for failing to perform his duties in a reasonable manner.

Literally, I think you would have a better case against the PM than you would have a shot at getting your money from the tenant.  That is just unacceptable for a professional PM to let a tenant go that long without paying and never filing the eviction.

What would have happened if the tenant decided to just stay there?
You would have been stuck with another couple of months of no payments.

I second the comment to fire the PM. But I would also say, that before you try suing the tenant, I'd take a swipe at the PM first for failing to do his job.

If it were me, though, I'd probably just eat it and move on. But I would definitely fire the PM because you can't let tenants stay for free because the house got some mold.

Lynn McGeein · Answer

The tenant can sue you, anyway.  Not a lawyer, so no legal advice here, but if it were me and I felt I'd followed the rules and proper procedures, I'd find a new property manager, I'd get the judgment, and if he did then try to sue me, it would be on record that he did it only after I filed for judgment against him.  $6k is a lot to let someone skate by with just because you're afraid of a lawsuit that could be coming anyway.

Jon Holdman · Answer

OK, a different piece of advice - sell your rentals.  You're wanting assurance that you're not going to be sued by a tenant.  That's just not going to happen.  Anyone can sure anyone else for anything.  When you become a landlord, you put yourself out there as a target.  There is risk involved in this business.  You can't let that fear paralyze you.  I would say doing nothing while the tenant steals $6000 from you is paralyzed.  So really consider if you want to be in this business at all.

Its been said (sorry, couldn't find the quote) that we overestimate the consequences of failure and underestimate the consequences of success.  So we stand still and do nothing when the right and profitable course is to take action.

Andy Collins · Answer

I have to admit, i am shocked when i hear someone left owing 3 months rent (or more),, I usually think it was a LL just trying to be too nice,,,but using a PM and having that happen, that is totally unacceptable

Eric C. · Answer

Well I did agree to this "treading lightly" strategy suggested by the PM so this situation is partially my fault.  It sounds like I should consult an attorney at this point in order to see if I am covered in case the tenant decides to retaliate with a mold claim.

Thanks for all the feedback given.

Xing Zhu · Answer

This article may be useful.

http://www.nolo.com/legal-encyclopedia/mold-rentals-landlord-liability-responsibility-prevention-30230.html

Based on this article, it looks like you have acted adequately after receiving the mold report from tenant.

Steven Hamilton II · Answer

Eric C.,

I am in COMPLETE agreement with Jon Holdman.  Eviction should have been filed for IMMEDIATELY after the rent stopped coming in.  Frankly, I would fire the PM and have your attorney send him a letter seeking lost rent due to his failure to perform.  You may also consider his liability insurance.

Even though he mentioned the other story, I think it was all due to his lack of control of the situation. If he failed to report to you that the tenant reported the problem that could be a major issue.

To second and go a bit further than John Mireles: 
If you don't want to spend a few dollars on an attorney in general to ask questions, I'd recommend selling the rental sooner rather than later.

-Steven

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