People who have incidents of domestic violence in their history often repeat the behavior.  

Being part of the solution means doing what you can to discourage unethical behavior - reporting the agent, refusing to deal with him.

A lax PM company, or owner, can encourage all kinds of behavior that isn't optimal for you - did they have preexisting leases?

CORPORATE GOVERNANCE The board of directors of a non-bank mortgage servicer should establish a sound corporate governance framework to protect the financial interests of the firm’s stakeholders and set minimum standards of acceptable behavior for employees in the business.

Keep in mind that this tenant may not care, and may seem laid back, but one family member, friend, cable guy, etc may raise a concern to them, and start them on a whole new path of behavior concerning the mold issue.

Yes, it's a stressful situation, but that doesn't excuse what seems like unprofessional behavior to me. 

I attended a training seminar recently where they beat into us "structure drives behavior!"

Are you really going to be known as the landlord that lets this type of behavior occur in the neighborhood.

Of course, if other parts of the relationship (including behavioral and financial aspects) would lead the IRS (or the courts) to determine that a worker is an employee, that's one thing. 

You can talk about behavior , what you told him or her , what you did, but in the end the only thing that matters is if and when you get a house under contract.