Mold when buying or selling a house in Ontario

This is general information, not legal advice. Disclosure obligations depend on the facts, so speak to your real estate lawyer or agent about your situation.

Keep it in proportion

Some mold exists in most houses: on a bathroom ceiling, a basement window frame, the back of an attic. It tells you there has been moisture. The questions that matter in a sale are:

• Where is the moisture coming from, and has it been fixed?
• How much is affected?
• What will it cost to remediate and to correct the cause?

A small patch from poor bathroom ventilation is a minor item. Mold across an attic roof deck from years of condensation is a known, priceable repair. Mold from an unresolved foundation leak or a hidden plumbing failure is more serious, because the cause is the expensive part.

For buyers

What to look for at a viewing

• Musty smell, particularly in the basement and closed rooms. Be wary of heavy air freshener.
• Stains on ceilings and at the tops of walls
• Fresh paint on one ceiling or one basement wall only
• Bubbling paint, warped baseboards, lifting flooring
• White deposits or tide marks on basement walls
• A dehumidifier running, which may be good practice or may be hiding something
• Condensation between or on window panes
• Finished basements with carpet on the slab
• The attic hatch: ask to see above it

What a home inspection covers

A standard home inspection is visual and non-invasive. The inspector does not open walls, lift carpet or move stored belongings. They report visible signs of moisture and suspected mold and recommend further evaluation. They should look in the attic and at accessible parts of the basement, and many use a moisture meter and a thermal camera.

An inspection cannot guarantee a house is free of mold. Growth inside walls, under flooring and behind finished basement walls is found only if there are outward signs.

Should you test?

Air sampling is often offered as an add-on. Its value is limited. Health Canada does not recommend routine air testing for mold, because there are no health-based exposure limits to compare results with, and results vary from hour to hour. Where mold is visible, testing adds little. You already know it needs removing.

Testing is more useful where there is a strong smell or a history of water damage with nothing visible, to help decide whether to investigate further. Even then, a careful inspection for moisture usually tells you more.

If mold is found

1. Identify the cause. A roofer, plumber or drainage contractor may need to look.
2. Get a written quote from a remediation contractor for removal and from the relevant trade for fixing the cause.
3. Decide how to proceed: ask the seller to remediate with documentation before closing, negotiate the price, or, if your offer is conditional on inspection and the problem is larger than you want, walk away.
4. If the seller does the work, ask for the contractor’s scope, photographs and, for larger jobs, a post-remediation verification by an independent party.

Do not accept “it was sprayed” or “we painted over it” as remediation.

Ask about history

Ask whether the house has had water damage, flooding, sewer backup, roof leaks or previous mold remediation, and ask for invoices. In Ontario, sellers sometimes complete a Seller Property Information Statement, which is voluntary. Your lawyer or agent can advise on what to request and how to word conditions and warranties in the offer.

For sellers

Before listing

• Fix the moisture. This is what buyers and their inspectors care about most.
• Have visible mold removed properly, not painted over. Inspectors recognise fresh stain-blocking primer in an attic.
• Keep the records: the contractor’s scope of work, photographs, invoices and any clearance report. A documented repair reassures buyers. An undocumented one raises suspicion.
• Consider a pre-listing inspection so that you find problems before a buyer does.

Disclosure

Ontario law distinguishes between defects that can be seen on a reasonable inspection and hidden ones. Sellers are generally expected not to conceal known hidden defects that make a home dangerous or unfit to live in, and must not misrepresent the condition of the property. Deliberately covering up a known mold or water problem can lead to a claim after closing. Real estate agents have their own professional disclosure duties.

How this applies to a particular house is a legal question. Talk to your lawyer before deciding what to say or not say.

Past problems that were fixed

A repaired problem with paperwork is far better than an unexplained stain. Be ready to show what happened, who fixed it and when.

Common situations

Attic mold. Very common in Ontario. Usually from bathroom fans venting into the attic, air leaks from the house and blocked soffit vents. Fix: remove the growth, correct ventilation and air sealing. See attic mold removal.

Basement mold. Ranges from surface growth caused by summer humidity to hidden growth behind finished walls from seepage. The cause determines the cost. See mold in the basement.

Bathroom mold. Usually ventilation. Check that the fan works and vents outdoors, and look at the ceiling below upstairs bathrooms.

Former grow operations. Houses used for cannabis cultivation can have extensive mold and altered electrical and ventilation systems. Municipal remediation requirements may apply, and lenders and insurers may ask questions.

Condos. The source may be in the common elements or another unit. Review the status certificate and ask about water incidents in the building.

Financing and insurance

Lenders and insurers may ask for evidence that a significant mold or water problem has been corrected. Home insurance generally does not cover mold as such, or damage from long-term seepage and condensation. It may cover mold that results directly from a sudden, insured water loss, depending on the wording. A buyer cannot rely on insurance to deal with a pre-existing problem.

What proper remediation looks like

So that either side knows what to ask for:

• The moisture source identified and corrected
• The work area isolated, with HEPA-filtered negative air for larger jobs
• Moldy porous materials such as drywall and insulation removed
• Wood and other solid surfaces cleaned by HEPA vacuuming and physical removal
• The area dried to normal moisture readings
• A written report with photographs
• For larger jobs, verification by an independent consultant

More: mold removal and remediation.