What in the Mold: What Texas Real Estate Agents, Buyers, and Sellers Need to Know About Mold Disclosure and Certificates of Mold Remediation
Mold isn’t just an unsightly nuisance; it can be a legal landmine in Texas real estate transactions. With Texas’s humid climate, mold issues are common, and the state has strict rules to ensure transparency when it comes to properties that have undergone mold remediation. Whether you are a buyer, seller, or real estate agent, understanding your duties under Texas law is crucial to avoiding delays, disputes, and potential lawsuits.
This guide breaks down what the law says, what to do if mold is discovered (or not), and the steps required to comply with mold disclosure and certification rules.
The Legal Foundation: Texas Occupations Code Section 1958.154
Under Texas Occupations Code Section 1958.154, a seller must provide the buyer with a copy of any Certificate of Mold Remediation (CMR) issued for the property within the five years preceding the sale.
This statute ensures that potential buyers are fully informed of any mold issues the property has had and can make an educated decision about their purchase. The law also helps protect sellers who have properly addressed mold problems by proving that remediation was completed by licensed professionals and that the underlying cause of the mold has been resolved.
In other words, this law serves both sides. It protects buyers from hidden or recurring mold problems and protects sellers who followed the law from future accusations of concealment or misrepresentation.
Texas’s mold disclosure laws are part of a broader effort to protect consumers and promote accountability in real estate. The Certificate of Mold Remediation system was designed to provide a clear record of professional mold cleanup, prevent concealment of past problems, and ensure that health and safety remain a top priority in property transactions. With mold’s potential impact on both well-being and property value, these laws bring clarity and structure to what could otherwise be a murky issue.
Changes to the TREC Contract
The Texas Real Estate Commission (TREC) updated its One to Four Family Residential Contract (Resale) to specifically include mold remediation disclosure. This addition ensures that both buyers and sellers understand their legal obligations regarding mold certificates.
In the current contract, under Section E: Title Notices, it states:
“(11) CERTIFICATE OF MOLD REMEDIATION: If the Property has been remediated for mold, Seller must provide to Buyer each certificate of mold damage remediation issued under §1958.154, Occupations Code, during the 5 years preceding the sale of the Property.”
This means that sellers are required by contract, not just by law, to disclose all Certificates of Mold Remediation within five years of the sale. Agents should make sure their clients understand this requirement and have all supporting documentation ready before listing or closing.
Understanding the Certificate of Mold Remediation (CMR)
A Certificate of Mold Remediation is not just a receipt; it is a legally recognized document issued after mold cleanup is performed by a licensed mold remediation company.
How It Works
- Mold is discovered through testing or visible inspection.
- A licensed mold assessor evaluates the affected area and prepares a mold remediation plan.
- A licensed mold remediation contractor completes the cleanup according to the plan.
- Within ten days of completion, the remediation company must provide the property owner with a Certificate of Mold Remediation.
- The certificate must include:
- Confirmation that the remediation was completed under an approved plan.
- A statement from a licensed mold assessor verifying that the mold was remediated according to state standards.
- A note indicating whether the underlying cause, such as a roof leak or plumbing issue, was properly fixed.
This certificate provides valuable documentation for sellers, buyers, lenders, and insurers. It essentially serves as proof that the property has been properly treated and is safe from the previous mold issue.
The Seller’s Duty to Disclose
When selling a home in Texas, disclosure is everything. State law requires sellers to share any Certificates of Mold Remediation issued in the past five years. This disclosure is typically made alongside the standard Seller’s Disclosure Notice form that covers property condition, repairs, and known defects.
Key Points for Sellers
- You must provide copies of all CMRs issued within five years.
- This applies even if the mold issue was minor or completely resolved.
- If you fail to disclose, the buyer may later have grounds for legal action, including fraudulent misrepresentation, concealment, rescission of sale (the buyer may back out), or damages if the buyer suffers financial or health losses.
Failure to disclose mold remediation is taken seriously by Texas courts because it can impact a buyer’s decision to purchase and their perception of the home’s safety.
Tip for Sellers
Keep a dedicated file with the remediation plan, before-and-after photos, assessment reports, invoices, and all Certificates of Mold Remediation. These records not only fulfill your legal obligation but also reassure potential buyers that the issue was responsibly handled.
What If No Mold Was Found?
Here’s an important clarification that confuses many sellers and agents. If a licensed mold assessor determines that no mold requiring remediation was found, or that the mold is below the threshold requiring state-licensed remediation, no certificate is issued.
In that case, you simply note in your disclosure that no mold remediation was required. Keep any reports from inspectors or assessors to prove that the property was evaluated and found to be within acceptable limits.
Even if there is no official certificate, having documentation from a licensed professional stating that no remediation was necessary can protect you from future disputes.
The 25-Square-Foot Rule: When a Certificate Is Required
Not all mold requires professional remediation under Texas law. The Texas Department of Licensing and Regulation (TDLR) sets a threshold of 25 contiguous square feet for when a licensed remediation project, and therefore a Certificate of Mold Remediation, is required.
Here’s How It Works
- If the affected area is less than 25 contiguous square feet, it is considered a minor mold issue. The homeowner or a general contractor can clean it up without a license, and no certificate is required.
- If the affected area is 25 square feet or more, then a licensed mold assessor must prepare a remediation plan, a licensed remediator must perform the cleanup, and a Certificate of Mold Remediation must be issued once work is completed.
This 25-square-foot rule applies to visible, contiguous mold, meaning mold that is physically connected in one area, not spread out in separate small patches.
Example Scenarios
- A 5-square-foot patch of mold under a sink: No certificate required.
- 30 square feet of mold along a wall after a pipe leak: Requires licensed remediation and a certificate.
- Several small spots of mold in different rooms, each less than 25 square feet: May not require a certificate, depending on whether they are related or contiguous.
When in doubt, it is best to consult a licensed mold assessor who can determine whether the issue meets the regulatory threshold.
How Buyers Can Protect Themselves
From a buyer’s perspective, mold is more than a cosmetic concern; it affects health and home value. Mold exposure can cause allergic reactions, respiratory issues, and even structural damage if moisture persists.
Before You Buy
- Ask for Mold Documentation: Request all Certificates of Mold Remediation for the past five years. If none exist, ask whether the property has ever been tested for mold.
- Order a Mold Inspection: A general home inspection might not cover mold specifically. Hire a licensed mold assessor for an air quality test or visual assessment.
- Check for Underlying Causes: Mold often results from water damage, roof leaks, plumbing issues, or poor ventilation. Ensure the source has been fixed, not just the visible mold removed.
- Consult Your Agent and Attorney: A real estate agent familiar with Texas mold laws can guide you through the disclosure process. If there are any red flags, consult a real estate attorney before closing.
If No Certificate Exists
This does not necessarily mean the property has never had mold; it simply means no licensed remediation has taken place. If there is evidence of past water damage, investigate further before finalizing your purchase.
Best Practices for Sellers and Agents
To stay compliant and transparent, follow these best practices:
- Document everything. Keep records of mold testing, remediation, and repair.
- Disclose promptly. Provide any Certificates of Mold Remediation as soon as possible in the selling process.
- Only use licensed mold professionals for assessments and remediation above the 25-square-foot threshold.
- Address root causes. Fix leaks, drainage issues, or ventilation problems that could cause future mold growth.
Mold happens. It does not have to ruin a real estate deal. The key is transparency, compliance, and documentation. By following the rules and staying informed, everyone in the transaction can breathe a little easier, both literally and legally.
Sources:
https://statutes.capitol.texas.gov/docs/OC/htm/OC.1958.htm Texas Occupations Code – OCC § 1958.154. Certificate of Mold Remediation; Duty of Property Owner – last updated January 01, 2024
Certificate of mold damage remediation: https://www.tdi.texas.gov/forms/pcpersonal/pc326mdr1.pdf
