Gilbert, AZ asked in Real Estate Law for Arizona

Q: I bought a 4plex, found mold and water leaks were not disclosed. Inspections proved covered/hidden mold. Next steps?

During the purchase period about 6 months ago, the tenants saw the Seller’s property management company discover mold and were told by them not to disclose the hidden mold or any of the other leaks or defects to me (the buyer) until purchase was completed, so that it would be “my problem.” Due to the amount of undisclosed leaks, and the faulty installation of the new roof (that was included with my purchase of the building but installed by a company closely affiliated with the Seller’s property management company) I have no idea how much mold and damage has actually occurred. I know that they hid the mold and leaks and told the tenants to withhold those important material facts. Am I required to remediate the mold immediately now that I’ve found it? Is the Seller’s management company able to be prosecuted or sued for this if they are not the Seller on the purchase agreement? Is criminal prosecution possible? What is the cheapest way to recover damages from the reasponsible party?

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1 Lawyer Answer
Peter H. Westby
Peter H. Westby
  • Scottsdale, AZ
  • Licensed in Arizona

A: This is a serious matter. If you have tenants living in the property you must re-mediate the mold immediately and take steps to protect your tenants. Based upon your tenant's comments, you appear to have a good claim against your seller and his agents for the active concealment of this issue. I recommend speaking with a real estate attorney to discuss in more detail. Your attorney will be able to let you know your legal rights and help you recover all of your damages. In addition, I recommend having this property inspected carefully by a licensed contractor that you have confidence in. Your seller failed to disclose water leaks and mold and he may have failed to disclose other problems as well. The results of this inspection should be given to your attorney.

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