Am I liable for selling a home that has a mold problem I did not know about?

My husband and I bought a home in WI and remodeled to to resell. We gutted pretty much everything and put new materials in it. It ended up that we lived in it ourselves for about 4 months while finding a new house to buy. We saw no evidence of mold or did we have any bad health affects while living there. My husband has asthma and didn't have any problems and my daughter lived with us while being pregnant. None of us had any problems. We did encounter a small amount of mold while remodeling, but removed anything that had the mold on it and cleaned the area according to the proper methods for mold removal. The couple that purchased it from us has been there aprox. 6 months and is now saying there is a mold problem. They waived their right to a home inspection.

Rice Lake, WI -

Attorney Answers (3)

Peter M. Navis

Peter M. Navis

State, Local, and Municipal Law Attorney - Juneau, WI
Answered

Because of the nature of this issue and the potential ramifications, you should immediately contact an attorney directly who has experience in real estate litigation issues.

The foregoing is intended to merely provide additional information to the individual posting the question and to... more
Maxwell Charles Livingston

Maxwell Charles Livingston

Contracts / Agreements Lawyer - Brookfield, WI
Answered

I agree with Mr. Navis. It is likely you will not be liable for failing to disclose a problem you had no way to know about. Hence, whether you are liable might depend on the reasonableness of your search before selling.

Janice Rourke Hugener

Janice Rourke Hugener

Business Attorney - San Francisco, CA
Answered

You may wish to consider promptly reporting the buyers' claim to the homeowner’s insurer who insured your WI home. Although homeowner insurance policies commonly contain exclusions precluding coverage for mold claims, some mold exclusions contain exceptions and do provide coverage if: (1) the mold was hiding within the walls or ceiling or beneath the floors, or (2) the mold results from a leaky pipe or appliance. It would be wise to read your insurance policy to see what kind of mold exclusion your policy contains; it is usually found in the section entitled Exclusions, under the heading Mold, Fungus or Wet Rot.

If your insurer accepts coverage, it will negotiate a settlement with the buyers and, if necessary, appoint local defense counsel to represent you and your husband if a lawsuit is filed.

If your insurer denies coverage, you may wish to consider hiring an insurance coverage attorney to protest the declination of coverage. Even if your policy contains an absolute mold exclusion (i.e., no exceptions), the attorney can assess whether you can make an end run around the exclusion by arguing that a covered risk was the efficient proximate cause of the damage. In this regard, AVVO's Find A Lawyer page is a good resource.

This response is general legal and business analysis and not legal advice; thus, other attorneys may analyze this... more

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