Legal Question in Real Estate Law in California

Re: Mold in the House we sold

There is a lot of hysteria and even some legislation these days about so-called 'toxic mold.' You have reason to be concerned, but don't panic and don't yet prepare to write a $45,000 check.

Things to do include:

(1) Confer with the broker who represented you in the sale of the house. The broker has (had) a responsibility to investigate and disclose certain commonly-found defects, and as a potentially co-responsible party, should be able and willing to give you some advice.

2. Inquire whether the mold has been tested for toxicity. Not all mold is toxic. The test is expensive, and the buyers may not have done it.

3. Check insurance coverage. Your past or present homeowner's policies, your broker's professional liability insurance, or even your title insurance might afford liability coverage. It could be a load off your mind to find that an insurance company will defend.

4. If you are sued, seek legal assistance at once. Have your lawyer examine the complaint for hard facts about toxicity and support for the claim of $45,000 damages.

5. It may be a good idea to have an inspection of the supposed mold infestation by your own expert at an early date. Look under 'mold remediation' in the Yellow Pages.

6. Re-read all the sale documents to see what was disclosed, what inspections were made and by or for whom, what representations were made, etc. The Civil Code, Sections 1102 - 1102.6 et seq. call for certain seller disclosures on a prescribed form. Verify that you executed the disclosure form and properly disclosed what you knew.

The Toxic Mold Protection Act of 2001 is found at Health & Safety Code sections 26100-26154. A quick scan of the headings does not show any particular new investigation or disclosure duty on the part of sellers or their brokers.

Finally, if you are served with a summons and complaint, get a lawyer and respond, or you may lose by default.