Mold Problems Kill Real Estate Deal

Q: I am due to close on a new house in Pennsylvania in late October. When we did the inspection, several things were wrong.
 

After a fair bit of going back and forth, the seller agreed to fix these issues, which included an excessive level of radon, mold in the basement, termites and other problems.

We got a note last week saying the work had been completed and the sellers’ agent allowed me into the house to check it out. When we got upstairs I was shocked to see significant mold problems on the master bedroom wall.

This house is new construction. It has just been built. These mold issues are a massive no-go for my wife and I, and we want out of the deal. The seller is adamant that we cannot pull out, and if we do, he says we will lose our earnest money deposit.

He says he will fix the mold problems, but will not allow me to be involved in this "fixing". I think we are justified in pulling out of the deal because this is a new serious issue. But I don’t want to lose my $20,000 deposit.

I should also note that we have not yet sold our current property so it might appear that’s why I want out of the deal. But it’s not that at all. I just don’t want to
have a recurrent mold problem, or to deal with any of the other issues that have come up.

A: This transaction has disaster written all over it. I'm with you and your wife on this one.

Mold, radon and termites aren’t something that you should fool around with, and your seller isn’t doing himself or you any favors by not really fixing these problems.

The reason you have mold in the basement and on the bedroom wall is most likely because the roof is leaking. But if just the basement is leaking, and if the mold has crawled all the way up the wall, it could be in the structural framing of the property – and you might never get it out. Mold remediation costs are very expensive, and getting rid of mold could end up costing a lot of money.

Please call your real estate attorney to assist you on getting out of this transaction. If you don't have a real estate attorney, find one – and fast.

If for some reason you do decide to go through with this transaction, do not agree to close until you have another set of inspectors (mold specialists and professional home inspectors) go through the property again with a fine tooth comb and give it a clean bill of health.

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