Toxic Mold: What Landlords Need to Know

Yep. That’s right, this is an episode about mold.  It may seem odd but, in several states, some pretty strict rules have passed regarding disclosures, cleanliness, responsibility, and remediation.

In this episode we are discussing all those things as well as what to do when a tenant reports that they have found mold in their unit.

It’s unfortunate that nearly all the research we combed through was written by lawyers with tips for tenants on what to look for and when it would be appropriate to file a claim against their landlord.

Because of that, we wanted to make sure all landlords were informed of the consequences of not taking mold seriously and tips on how to keep yourself out of the hot seat when it comes to mold.

LINKS

👉 Request the CAA mold addendum we use in our lease.  Emails located further down in links.

👉 State mold rules and regulations: go to your state department of environmental protection or your state department of public health.

👉 For potential mold-related legislation, search: National Conference of State Legislatures' Environmental Health State Bill Tracking Database. Check the "Indoor Air Quality—Mold" box in the "Topics" column and check the box next to your state.

👉Episode 28: The Cash Reserves Blueprint: Protecting and Expanding Your Portfolio

👉 Episode 6: Creating Standard Operating Procedures for Your Rental Property Business

👉Mold: EPA’s Website

👉 Course Waitlist: From Marketing to Move In, Place Your Ideal Tenant
👉 Text Us a Question! Two ways: SMS text to 650-489-4447. OR

One way text only, you need to include your email for a response.

👉 Email us your questions! Stacie@YourLandlordResource.com, Kevin@YourLandlordResource.com
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Transcript

Stacie: 0:00

Most everything we found was written by lawyers, where the writing was focused on the tenant's side of dealing with mold issues. You know, regarding their rights. And of course, those lawyers are more than willing to help tenants win a lawsuit should a landlord not take the report of mold seriously. And that my friends is the reason we're doing this podcast today. We want to make sure that you are all informed on the severity of the subject and get some insight on how to handle the situation should you experience an issue with mold in one of your units. Specifically, we are discussing landlord liability, responsibility, and prevention. And prevention, not only in the traditional sense of preventing mold from occurring in the first place, but prevention by way of mitigating risks through a thoughtful, prepared lease, as well as having solid operating procedures and rules and criteria in place to protect your rental property business.

1:04

Welcome to your landlord resource podcast many moons ago. When I started as a landlord, I was as green as it gets. I may have had my real estate license, but I lack confidence in the hands on experience needed when it came to dealing with tenants, leases, maintenance, and bookkeeping. After many failed attempts, fast forward to today. Kevin and I have doubled our doors and created an organized, professionally operated rental property business. Want to go from overwhelmed to confident? If you're an ambitious landlord or maybe one in the making, join us as we provide strategies and teach actionable steps to help you reach your goals and the lifestyle you desire. All while building a streamlined and profitable rental property business. This is your landlord resource podcast.

Stacie: 1:53

Well, hello there, everyone. You are listening to the Your Landlord Resource Podcast, and I'm your host, Stacie Casella. I'm sitting here with my co host, Kevin Kilroy, who also is my business partner and my partner in life.

Kevin: 2:08

Hey there, everybody, and thanks for listening.

Stacie: 2:11

So today's subject is an important one. I mean, everything we talk about is important, but this is one that can be a real serious problem that can affect the health of your tenants. And that is toxic mold exposure.

Kevin: 2:25

Well, even the word mold can be intimidating, don't you think?

Stacie: 2:29

Oh yeah, of course it is. But there are a variety of molds and they have different effects on people. And that is one of the things we want to discuss here today. That along with how to handle things when a tenant reports they found mold, what their rights are, if indeed the mold is toxic, and how to handle the situation if it is found to be of the tenant's negligence. And additionally, we want to talk about as landlords, what you need to be doing to cover yourself before the tenant even moves in.,Alright, the first thing I want to say is that for landlords, there's not a lot of information out there on how you can 1), prevent it from happening and 2), how to handle it when a tenant reports it. When we were doing our research for the subject of mold, there was only one article written on behalf of landlords, and the focus of that was around their responsibilities and the potential health risks for tenants. Most everything we found was written by lawyers, where the writing was focused on the tenant's side of dealing with mold issues. You know, regarding their rights. And of course, those lawyers are more than willing to help tenants win a lawsuit should a landlord not take the report of mold seriously. And that my friends is the reason we're doing this podcast today. We want to make sure that you are all informed on the severity of the subject and get some insight on how to handle the situation should you experience an issue with mold in one of your units. Specifically, we are discussing landlord liability, responsibility, and prevention. And prevention, not only in the traditional sense of preventing mold from occurring in the first place, but prevention by way of mitigating risks through a thoughtful, prepared lease, as well as having solid operating procedures and rules and criteria in place to protect your rental property business.

Kevin: 4:32

Exactly, so let's get into it. Let me start off by saying that mold is considered an environmental hazard and there have been some monumental multi million dollar lawsuits against landlords who have not handled the reports of mold in their rentals properly. So, let's quickly go over the different kinds of mold. And, let me just clarify here. We are talking about toxic mold, not mildew. And, there is a difference between the two. Where they are both types of fungus, mildew is much easier to deal with. I mean both are known to grow in warm, humid, and damp environments. Which is why you see mold commonly in showers where there is not adequate ventilation. Mold can get into a structure and destroy it from the inside. Mildew is a flattened, powdery substance that mostly grows on the surface of living things. You know, like plants and trees. It begins as white and then turns a brown or gray color. Mold is fuzzy in appearance and grows on organic matter that used to be living things, like sheetrock or paneling, wood flooring, trim, and in attics and on bathroom ceilings. Basically, mold can grow on any organic surface in a home, and given enough time, it can cause materials to rot and can destroy the structural components of whatever it's growing on. Toxic mold can have a grayish, like, soot like texture, or a slimy, wet surface. It may also have furry orange or brown spots, but the real difference is the smell. You see, mold smells musty, which is actually the living organism off gassing as it digests what it is eating. I mean, it's kind of weird and gross all at the same time.

Stacie: 6:20

Yeah, off gassing is a very nice way of doing

Kevin: 6:22

it. Thank you.

Stacie: 6:24

You know, orange spots are what I have seen on the ceiling in one of the kid's bathrooms years ago. Mostly because the house was built without exhaust fans and the kids couldn't reach the window to open it. So the moisture rises and sits on that surface, which in our case is sheetrock. And if I had to guess, that would be the case in most homes. We did have black mold in a couple of spots in the bedrooms as well, and that kind of really freaked me out. So for one room, it grew behind a shelving unit that backed up to an outside wall. And on the outside of that wall, we have wood siding, and the water was getting in between the slats, creating moisture in between the wall. When we pushed the shelving unit up against that wall in the exact spot where we had no idea that water was getting in, we created a situation where that moisture had no way to dissipate. Essentially, we're trapping it in. The only reason we found out about it was because we had to grab something that had fallen behind the shelving unit. And boy, what a shock that was. You see, if air was able to circulate where that cabinet was, the chance of mold is less likely. But because the cabinet blocked air from moving behind there, the moisture turned to mold and we got a bunch of black spots on the drywall. A similar thing happened in another bedroom where we had a roof leak. We have cathedral ceilings in this particular room, and the water was traveling down the beams into the lowest corner of the roof above the drywall. And instead of the water coming through the drywall, we actually had a bright uplight that stood in that corner, which threw a bunch of heat on the exact corner where that water was ending up. So the heat from the lamp and the cold outside basically created a petri dish and mold started to grow. And of course, we took care of all these issues, but we want you to know it doesn't take much for mold to grow, especially in older homes that tend to need more maintenance. And the point is, even if you are the cleanest of people and you feel that you stay on top of preventative maintenance, you still can experience issues with mold. And the mold we're discussing today is toxic mold and is commonly found in humid environments. So here are some signs you want to look for. Visible mold, such as on walls, ceilings, or floors, much like the ones I just described from our home. You might also just smell a musty odor. You might find mold where you see water damage such as water stains, discoloration, peeling or bubbled paint, warped floors, or rotted wood. So keep an eye out for damp or moist materials including condensation like you find on windows or sometimes walls where there's a leak on the back side of it. And in more severe cases, you or your tenant might be experiencing some health symptoms such as coughing and sneezing or respiratory issues.

Kevin: 9:20

Yeah, I mean, let's hope it doesn't get to that point for anyone. So, you get the gist on mold. It can vary in color and texture, can smell, can grow where you can't see it, and can cause pretty severe health symptoms if it goes untreated. So how do you prevent it? All right, that's a tough one. We can't tell you exactly how to prevent it from happening, except that you need to be making sure you are doing periodic inspections of your rental properties to look for evidence of water intrusion. And guess what? Part of that inspection means you're looking behind any furniture that your tenants have, especially if they are on an outside wall. A lot of water intrusion will happen when the seal around a window fails, or if the roof or gutters are leaking and the water is getting in under the eaves, and then running down the inside of the wall. Occasionally you can experience this water intrusion on an inside wall, especially if there's a bathroom or any water source above that room. But it does seem to be more common on outside walls, especially where there are big temperature differences between the inside and the outside. But we take a flashlight and look behind beds, dressers, solid desks, etc. to make sure there is nothing going on behind it.

Stacie: 10:37

And we also absolutely let the tenant know that we do this when we send out our inspection notification via email. We break down exactly what we're looking for and where we're going to be looking.

Kevin: 10:49

Yeah, I mean we do whatever we can so they can't come back later and say we were snooping or violating their privacy. So we just tell them we'll be looking for any evidence of mold and we'll be checking behind all furniture and inside the closets. We also let them know that we will be checking for leaks under all the sinks and toilets. And of course, we ask them to let us know if there's anything they've noticed that would be a concern. You know, like if the windows were leaking or the exhaust fans aren't working, or if any of the sinks are dripping or toilets running, you know, stuff like that. So, that is your first step of defense against issues with mold. And I mean that by finding and dealing with the mold itself. As well as you being proactive and letting your tenants know you're taking mold growth seriously, and that's why you look for it during your inspections. Because one of the main issues that lawyers love when defending tenants is when they find that the landlord did not take appropriate action or act fast enough to remedy the issue. Just by sending that email and letting them know that you're going to do inspections and look for mold growth eliminates a lot of their case for not being proactive and finding mold before it became a serious problem. Now, with that being said, if there is mold behind a wall and you can't see it, then you cannot really be to blame. But you do need to have those inspection records to cover yourself and prove that you have made an effort to be proactive in your prevention.

Stacie: 12:23

Alright you guys, so let's talk a little about what else you can do to protect yourself when it comes to toxic mold exposure, because that's really what we're talking about here today. We want to let you know what you should be doing to protect yourself and your property in case something goes wrong. And a huge part of that is disclosures. These would be found within the body of the lease and in some states like here in California, it is required for us to include it.

Kevin: 12:51

And I believe most California specific leases have like a really large addendum that includes it already for you, right?

Stacie: 12:57

Yep, most California leases have been adapted to include I think it's like four pages of information about mold for the tenants to sign off on. Essentially It includes verbiage on what to look for, where it commonly occurs, and our shows several photos of what it looks like too. It also discusses ventilation and cleanliness and the tenant's responsibility to prevent mold growth from occurring and potential health risks that can occur from mold exposure. And that is important because if you get a call from a tenant that says they have mold growing on the bathroom ceiling and they insist you come and handle it right away. And let's say being that very responsible landlord that you are, you go over and you handle it. And you find that they just took a shower and the exhaust fan is not on, nor is the bathroom window open to vent the moisture out of the room and prevent that mold from growing. At that point, you would explain to them what you believe the problem is and ask them to please vent the bathroom out after a hot shower is taken. And then of course you're going to remedy the issue by cleaning it using a special mold primer and then painting the ceiling again. Now is this the only reason that there could be mold growing? No. There could be a bathroom above this one that has a leaky toilet or maybe there's a roof leak. So don't be too quick to dismiss the problem and blame the tenant. Just let them know that if they do what you ask by way of ventilation, the problem comes back to let you know.

Kevin: 14:28

Yeah, so our advice is to treat this issue with the alarm it deserves. Start with the obvious and then keep hacking away at it until you know the problem has been resolved. But most of all, be professional, be kind, and definitely be concerned. Because as soon as you blow off that tenet and act like their health and safety don't matter, you can bet they're going to find a lawyer to let you know otherwise.

Stacie: 14:52

Right. So check out your lease and see what it says with regards to mold and how a tenant needs to handle reporting it and what their responsibility is in the matter. For the most part their responsibility is to minimize mold risk by keeping the unit clean, by controlling the humidity, and reporting any leaks that they know of. And you guys if you want to see a sample of what our lease includes with regards to the mold addendum, shoot us an email and we'll send it over. You know we pay for it and it's created and licensed by the California Apartment Association so we can't allow you to use it, but if you want to see what it is, we will send you something that you can view for informational purposes only. But I think it's, it's important for all of you to know that landlords in all states are responsible for maintaining fit and habitable housing and for repairing rental properties. And this extends to fixing leaking pipes, windows and roofs the causes of most molds. And take note that each state has its own definitions of what quote unquote habitable housing is and each state's laws set its own level of landlord responsibility. Some states have stricter habitability laws than others like California and New York. If the landlord doesn't take care of leaks and mold grows as a result, a tenant might be able to hold the landlord responsible if they can convince a judge or a jury that the mold has caused a health problem. Each state also has a set amount of time that a landlord has to respond and address mold issues. Some are short, like a week long, others are up to 30 days. So make sure that you know what your responsibility is with regards to response time. The bottom line is it is your responsibility as a landlord to remediate mold growth and fix any underlying moisture problems. And that can be easy or it can be super complicated and expensive.

Kevin: 16:52

Yeah, seriously. I mean, we have heard of homeowners and landlords having to literally tear down their whole home or apartment building to get rid of mold because it was never addressed properly and spread to a majority of their property. I mean there was a single family home, this wasn't a rental, but it was an Austin, Texas that went years before they figured out that much of the family's health issues were caused by mold growth. It ended up being an issue with the roof from when the home was actually built. And due to the extreme spreading of mold, they ended up having to rebuild the entire home. Another large multi family complex in Irvine, California, had similar issues and the landlord did make an effort to remedy it, but again, there were issues from construction that created a mold problem that got completely out of control. We're not sure if they ended up tearing it down or not, but it was a huge lawsuit that pretty much started the whole tenant's rights push for protection against mold here in California.

Stacie: 17:53

Yeah, and you guys a lot of states have followed suit. Maybe not as strict as California and New York, but many states now require their leases to state who is responsible for what when it comes to mold. I believe we should also discuss the health hazards that can occur from mold exposure. So what do you do when a tenant notifies you of a potential mold issue? And I know Kevin mentioned being kind and responsive, which come on guys, that should be obvious. I'm talking about the actual procedure now. But you want to document, document, document. Get over there as soon as possible and take photos of the mold that they have found. If you know what needs to be done, fix the issue and make it happen as soon as possible. If you cannot see where or why the mold is growing, and if you do not have the construction expertise, consider hiring a professional mold inspector to inspect the property with you. It may cost a little bit, but in the end, no one can say that you did not take the report seriously or you failed to respond. With a mold specialist, you will get a detailed report as to what kind of mold it is, meaning if it is toxic or not, or how dangerous exposure of it is, where it is coming from, and their recommendation on how to get rid of it. Now, if you get that report and do nothing, then you're setting yourself up for problems. Because if the tenant experiences symptoms from mold exposure, which can run the gamut, like a dry and scratchy throat, coughing, wheezing, stuffy nose, skin rashes, headaches, muscles and joint pain, digestive issues, and changes in their mood, like brain fog, memory loss, and anxiety.

Kevin: 19:43

I don't mean to laugh, but you sound like one of those commercials talking about the side effects of a new drug they're promoting.

Stacie: 19:50

I know, right? Well, I guess now all I have to say is, if you've experienced these symptoms in your rental unit, you should call Jacobi and Myers law firm. You may have a right to compensation from your scumbag landlord.

Kevin: 20:04

Okay. I'm laughing, but you guys, this is so true. I mean, there's a ton of lawyers out there waiting to pounce on landlords who failed to take the issues of mold exposure seriously, so what we're saying is just beware. Tenants have won multi million dollar cases against landlords for significant health problems. And just like Stacie mentioned before, such issues as rashes, chronic fatigue, nausea, cognitive losses, hemorrhaging and asthma allegedly caused by exposure to toxic molds in their building. And to finish up what to do when a tenant reports it. Make sure you stay in communication with your tenant every step of the way. After the initial inspection, email them with your findings and photos. Let them know what the next steps are and when you expect to complete them. By taking the time to communicate the what, where and when to the tenant, you will significantly decrease your chances of your tenant taking legal action. If you are sending over a contractor or coming back with a mold specialist, tell them who and when so they're aware of your plan of action. I mean, you really should be doing this anytime you have to go over to a unit. But when there is an issue such as mold, please be extra cautious about detailed communication. Okay, I do think it is important to note though that not all molds are toxic. For instance, mold that grows on shower tiles is not dangerous. It does take an expert to know whether a particular mold is harmful or just annoying. And it's really tricky to find out whether a person who has been exposed to mold has actually inhaled it or ingested it. Now there are blood, urine, and other tests that can be used to assess a person's exposure to mold, but these tests are often inconclusive. So you all need to know that as of now, there are no federal laws that set the permissible exposure limits or any building tolerance standards for mold in residential buildings. There are a few states, which I believe are California, Indiana, Maryland, New Jersey, and Texas, that have begun the process of establishing permissible mold standards or guidelines and regulations for mold that occurs in indoor air. There are also two cities, New York and San Francisco, not surprisingly, that have begun this process on a local level also. If you want to know the rules and regulations on mold for your state, you can go to your State Department of Environmental Protection or your State Department of Public Health. We have directories for both of those that we will link in the show notes. If you want to know whether your state is considering mold related legislation, we will link how to find that information in the show notes as well.

Stacie: 22:51

So if a tenant finds mold in their unit and you fail to address it, your state law may allow them to withhold paying rent as you are not maintaining their quote unquote implied warranty of habitability. They can also sue you for health and emotional distress. Now the liability picture changes when mold grows as a result of the tenant's own behavior. Such as keeping their unit tightly shut, creating high humidity, or failing to maintain necessary cleanliness. Tenants have some duties to maintain their rental unit, so when a tenant's own negligence is the sole cause of injury, the landlord is not liable. To avoid causing any mold problems, make sure in your lease, for the clause that the tenant must practice good housekeeping such as cleaning and ventilating their rental unit. And you guys most leases include this verbiage now, so unless you're still using like a two page lease with only names and dates on it, you should be covered. All right. We have a couple more items we want to discuss, and one is that your regular liability insurance does not cover mold. I mean, unless there is a severe flood, then it will cover any mold that has occurred as a result of something that is covered. But if there is a roof leak or a window leak and mold grows in between the walls and goes undetected, insurance usually does not cover that. Now, some insurance companies offer add on coverage to cover mold remediation, which can include testing, developing a plan, and removing that mold. Some insurance companies that may offer this mold coverage include Security First Insurance Company, Federated National Insurance Company, United Property and Casualty Insurance, and Olympus insurance Company. Keep in mind that mold coverage can be expensive in states that are prone to mold such as Florida. And insurance companies often consider mold damage to be preventable through basic household maintenance, and may deny coverage if the mold is due to neglect or lack of maintenance.

Kevin: 25:01

All right, I think I'll take this last part if it's okay with you.

Stacie: 25:04

Oh, that sounds good.

Kevin: 25:06

So if you do not have insurance coverage to pay for the unfortunate circumstance of mold growth in your rental unit, do you have a plan in place to pay for remediation? And what I mean is, once you know you have mold in your unit, and regardless of whether the current tenant stays or a new one moves in, you have to do the necessary repairs to remove the mold and the issue causing it. And that can be a simple task, or it can be a really expensive project. Usually it is never planned maintenance, so it is of utmost importance to make sure you have adequate reserves to lean on, so you can pay for the removal of the existing mold and say, roof repairs or replacing kitchen cabinets when mold grows behind them from an undetected leak.

Stacie: 25:52

Or flooring, like what happened when we had a washing machine leaking and we had no idea.

Kevin: 25:57

Ooh, yeah, forgot about that one. When our contractor Jim, pulled up flooring beneath it, and several feet past it, the flooring was just riddled with mold, as was the wall behind the unit. And it cost us at least$2500 to get repaired at the time. So, please do yourself a favor and have a separate bank account that holds your reserves for property taxes, insurance policies, and cash reserves for large projects planned out like roofs and driveways, as well as reserves for vacancies, and in the case we are discussing today, reserves for repairs and maintenance. If you'd like to learn more about cash reserves, give episode 28 a listen. It's called The Cash Reserves Blueprint, Protecting and Expanding Your Portfolio. We will link it in the show notes for you.

Stacie: 26:48

Yeah, you guys there's a lot of information out there regarding mold and most of it's directed to the tenant and how they should deal with it when they find it in their unit. And your job as a landlord is to make sure that they have all the tools they need to report any issues to you and guidelines on how it should be handled. So do yourself a favor and do not wait until it happens because at some point in time, there is a high likelihood that it will on some level. All right, so let's recap really quick. First and foremost, you want to make sure your lease is up to date and includes verbiage on how to handle reporting mold growth, as well as the tenant's responsibility for maintaining a clean, moister free environment in their unit. and that they have to report leaks or water damage to you right away so you can be proactive on preventing mold from happening in the first place. Second, know what the tenant's rights are and what your legal responsibilities are when it comes to remediating mold within your rental property. If you do not know, we will link how to find that out in the show notes. Third, have proper procedures in place on how to deal with the report of mold. These procedures are not only for you, they are also for anyone who might be working for you, or even taking over for you should you become incapacitated and cannot work. For more on how to create your standard operating procedures, check out episode six where we're talking all about those. It also happens to be in our top five most listened to episodes, so there's that. And last but not least, have a plan on how you will pay for any expenses that arise from mold growth. It can cost very little to tens of thousands of dollars to fix. So whether you prefer to pay for insurance coverage for mold or stash away cash reserves for unexpected repairs, make sure that you know how you're going to pay for it.

Kevin: 28:45

And one more thing, if you want more information on mold, including what it looks like, how to test for mold, the health effects of mold exposure and how to clean up mold, check out the mold section of the EPA website. We will also link that in the show notes for all of you.

Stacie: 29:02

Yeah, you know, that's actually a really good reference and it's it's nice and it's non biased, which is good. All right, you guys that's a wrap for this episode. We know you were busy as heck and we appreciate that you would take the time to listen to our podcast. So, thank you. We are very grateful for each and every one of you. With that said, we would love to stay in touch with you. We have a private Facebook group where we have been seeing a lot of activity lately with member questions, so that's been good. We're also on Instagram, Facebook, and YouTube, so give us a follow on those as well. And speaking of following, if you're new here, please follow or subscribe on your favorite podcast platform so you won't miss out on any episodes. When you subscribe or follow our podcast, it actually really helps our metrics and helps us get in front of other landlords so that they can experience our podcast as well. And the whole goal for Kevin and I is to guide all you guys out in landlord land to being more efficient and professional in your day to day practice of owning and self managing rental properties. All right, a few more housekeeping items. We have a free newsletter that we send out each week that includes a deep dive into a landlord tip, our favorite landlord products, and always has several landlord and rental property management specific articles for you to learn more. We have a bunch of free downloads that we offer, like email templates that we use, a guide on tenant screening, checklists, et cetera. And we link those all in our show notes for you to access. And lastly, we will include a link to sign up for the waiting list of our upcoming course from Marketing to Move In, How to Place Your Ideal Tenant. Whew. All right. Lots of stuff for you to know about there. Anyway, we want to tell you thanks again for listening and supporting us. And until next time, you've got this, landlords.