Can I Sue if I Find Mold?

Guest-host Gary Laturno, a real estate attorney and broker, tackles your real estate questions today as part of Savvy & Sage: Tips on Buying and Selling in 2009.

Reader Chip asked:

Hi Gary, What are the legal ramifications of houses that have mold? Can a buyer who finds evidence of past mold that was not disclosed at the time of purchase go back and sue the previous owner for repair costs? Thanks

In most transfers of real estate in California the owner of the real property is required to provide the buyer with a Transfer Disclosure Statement (TDS) and to disclose the condition of the property to the buyer. (A TDS is not required in husband-wife transfers, probate sales, foreclosure sales, bankruptcies, REO’s and when one co-owner sells to another co-owner.)

Can the buyer file a lawsuit against the seller if s/he fails to disclose mold in the home? The answer depends on the agreement of the parties concerning dispute resolution. Did the parties agree to the mediation and arbitration of disputes in their purchase agreement? If so, a buyer may be precluded from filing a lawsuit against a seller. (The California Association of Realtors (CAR) Purchase Agreement provides for the mediation and arbitration of disputes.) 

Please also note that a seller may take the position that s/he did not know the property had mold. If so, the buyer would bear the burden of proving that the seller knew the home had mold and failed to disclose this fact.

Final comment: Lawsuits are the worst way to resolve disputes. For information regarding mediation as a method of dispute resolution, go to my web site, www.GaryLaturno.com. Read “Why Mediate” and “Mediation Procedures”.  

If you have more questions for Gary Laturno, please leave a comment below or send an e-mail to kelly.bennett@voiceofsandiego.org.

— GARY LATURNO