Mold contamination in residential properties is a serious issue—one that can affect health, property value, and legal liability. In California, sellers are legally required to disclose known mold problems during real estate transactions. Buyers, in turn, have the right to full transparency before committing to a purchase. This article outlines California’s mold disclosure laws, the risks of non-disclosure, and how both parties can protect themselves during a home sale.
Why Mold Disclosure Matters
Mold can cause:
- Respiratory issues, allergic reactions, and chronic illness
- Structural damage to walls, ceilings, and flooring
- Decreased property value and buyer hesitation
- Legal disputes if not properly disclosed
California law treats mold as a material defect—meaning it must be disclosed if known to the seller. Failure to do so can result in lawsuits, rescission of the sale, and financial penalties.
Key Mold Disclosure Laws in California
1. California Civil Code § 1102.6
This statute requires sellers of residential property (1–4 units) to complete a Transfer Disclosure Statement (TDS). Sellers must disclose:
- Known mold contamination
- Past water damage or leaks
- Repairs related to moisture or mold
- Any environmental hazards affecting the property
The TDS is a legally binding document. Omitting mold issues—intentionally or negligently—can expose sellers to liability for fraud or misrepresentation.
2. Health & Safety Code § 26147
If mold exceeds permissible exposure limits or poses a health threat, sellers must provide written disclosure. While California has not adopted enforceable mold exposure limits, visible mold, musty odors, or water damage are considered health risks by the California Department of Public Health (CDPH).
3. Natural Hazard Disclosure (NHD)
While not mold-specific, the NHD report may include flood zone status or other conditions that increase mold risk. Sellers must disclose if the property is in a flood-prone area, which could contribute to moisture intrusion.
What Sellers Must Do
To comply with California law, sellers should:
- Inspect the property for visible mold, leaks, or water damage
- Disclose any known mold issues—even if remediated
- Provide documentation of past repairs or remediation efforts
- Include mold-related information in the TDS and other required forms
- Consult a real estate attorney or agent to ensure compliance
Transparency protects sellers from future legal claims and builds trust with buyers3.
Risks of Non-Disclosure
Failing to disclose mold can result in:
- Legal action for fraud, negligence, or breach of contract
- Rescission of the sale—the buyer may cancel the transaction
- Financial damages—including repair costs, medical expenses, and attorney fees
- Loss of reputation in the real estate community
Buyers have up to two years after discovering a non-disclosure issue to file a lawsuit4.
What Buyers Should Look For
Buyers should:
- Review the TDS and NHD carefully
- Ask direct questions about past mold issues or water damage
- Request inspection reports and repair records
- Hire a licensed home inspector to assess moisture-prone areas
- Consider mold testing if there are signs of dampness or odor
If mold is discovered after purchase and was not disclosed, buyers may have legal recourse.
Real-Life Example
A buyer in Orange County purchased a home with no mention of mold in the disclosure forms. Months later, black mold was discovered behind drywall in the bathroom—linked to a prior leak the seller had repaired but failed to disclose. The buyer sued for fraud and breach of contract. The case settled for $450,000, covering remediation costs, medical bills, and legal fees.
Can You Sell a House With Mold?
Yes—but only if you disclose it. Sellers are not required to remediate mold before selling, but they must inform buyers of its presence. Some buyers may accept the risk and negotiate a lower price; others may walk away. Disclosure is key to avoiding legal trouble5.
Role of a California Toxic Mold Lawyer
If mold becomes a legal issue during a home sale, a California toxic mold lawyer can:
- Review disclosure documents for compliance
- Represent buyers or sellers in mold-related disputes
- Negotiate settlements or pursue litigation
- Advise on remediation obligations and insurance coverage
Legal guidance is especially important in high-value transactions or when health effects are involved.
Final Thoughts
Mold disclosure is not optional in California—it’s the law. Sellers must be honest about known mold issues, and buyers must do their due diligence before closing. Whether you’re selling a home with mold or buying one with potential moisture concerns, understanding your rights and obligations is essential. When in doubt, consult a qualified attorney or real estate professional to protect your interests.
References
- California Civil Code § 1102.6. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=1102.6
- California Health & Safety Code § 26147. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC§ionNum=26147
- California Mold Remediation Guidelines: Laws and Property Owner Duties
- Seller’s Disclosure Requirements for Mold – The Own Team
- Selling a House with Mold Problems in California – Osborne Homes
- Seller Disclosures in California – Sara Naheedy Law
- Selling a California Home: Disclosure Obligations – Nolo
- Mandatory Real Estate Disclosures in California – Countywide
