It will create moisture and mildew and open you to issues including possible lawsuits....So my advice is - don't do anything until this is no longer an issue....

There was a big class action lawsuit with it in AZ, but they actually still make the stuff. 

@Kelvin NgFor private lending assuming its lending to non owner occupied I would say my preference is a LLC in case of any lawsuit as higher chance in lending but I know some who use personal name

@Nicholas Aiola, I have a question, here is the scenario:A portion of residence is rented out on permanent basis (single family dwelling but it has "in-law" suite).

  #1 Follow the laws where your rental is, #2 make sure everything is up to code #3 do any repairs promptly #4 get plenty of insurance - doing all this will avoid 99% of lawsuits (in other words don't be a slumlord). 

Most residential loans, collecting of the debt is limited to foreclosing on the property  For a law suit, I do not see the equity position having an impact.  

The most you can lose there is 3x the deposit and the court costs (a few hundred $).Even a slip-and-fall lawsuit won't break the bank.

Not getting home certified means $200/ less rent per month and competion from the slum lords with mold and lead being untested invite future lawsuits. https://www.ourair.org/edu/indoor-air-quality-and-health/

I’m learning on what nightmares some HOAs are (pending lawsuits/ no reserves) list goes on and on.

Definitely start off with an LLC and maybe even a double system of a management company over an individual LLC owning a property worth $2ook or much more, maybe even through in a trust or 2 to make a lawsuit have to look to even find you.