Mould in rental houses and home units can be a health risk for tenants and a ‘wealth risk’ for landlords if it is not treated quickly.  

This is a guide to the law which applies to mould in rental properties, including case studies which illustrate the tenant’s legal rights to have the mould treated, their rent reduced, to receive compensation and to terminate the tenancy because of the mould.

The Law – the landlord must provide premises fit for habitation / fit to live in

Residential Tenancy Law imposes a legal obligation upon the landlord to provide rental premises which are fit for habitation / fit to live in.

In NSW the landlord must provide:

the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant. (s 52(1) Residential Tenancies Act 2010 (NSW)), and provide and maintain the residential premises in a reasonable state of repair (s 63(1) RTA)

In Queensland the lessor must ensure that:

the premises are fit for the tenant to live in (s 185(2)(b) Residential Tenancies and Rooming Accommodation Act 2008 (Qld)).

In Victoria the residential rent provider must ensure that:

the rented premises are provided and maintained … in a reasonably fit and suitable condition for occupation (s 68(1)(b) Residential Tenancies Act 2007 (Vic)).

This legal obligation forms part of the standard Residential Tenancy Agreement.

It follows that if mould appears, the tenant should give notice to the landlord to treat the mould under the Residential Tenancy Agreement because it affects fitness for habitation. And the landlord should take steps to treat the mould and its source, as soon as possible.

In NSW a tenant may give an immediate termination notice to the landlord if the premises … become wholly or partly uninhabitable (otherwise than as a result of a breach of an agreement) (s 109 RTA). Equivalent provisions apply in Qld and Vic.

Who is responsible to treat mould?

Black Mould (Aspergillus niger) is a fungi which releases spores which cause health or allergic reactions such as asthma and dermatitis in some people. It grows in moist places which lack ventilation.

The responsibility to treat the mould usually falls upon a landlord, sometimes on a tenant.  Consumer Affairs Victoria provides these illustrations and advice:

  • A tenant may have allowed mould to develop in a bathroom by not using ventilation fans. If so, the landlord may serve the tenant with a notice requiring them to fix the problem.
  • A defective window frame has allowed rainwater to leak into the property, causing mould to develop. If so, the tenant may serve a notice to repair and the landlord must deal with this as a non-urgent repair.
  • It will be an urgent repair if the tenant proves that the mould is dangerous and/or is causing a health issue. The proof required is an expert’s assessment report by an occupational hygienist or an environmental health professional or a local council inspector; and a medical report if the tenant has an existing health issue such as asthma.

The Tenancy Tribunal (NCAT, QCAT or VCAT) decides mould disputes for rental property.

Four Tenancy Case Studies on rent reduction, compensation and termination for mould

#1 Andrew Fletcher and Song Fletcher; v Luke Bunbury [2015] NSWCATCD 60 – 2015

Facts The tenants leased a three bedroom house at Greenwich for a term of 2 years from 23 March 2013 at a rent of $930pw. At the open inspection they had noticed a scented candle was burning, which they later realised disguised the musty odour they discovered when they moved in. The tenant and her daughter suffered nasal irritation and allergic symptoms. She kept the property cleaned and kept the windows open for ventilation, used a dehumidifier, damp rids and a condenser dryer. In April 2014, the tenants stopped using bedroom 3 because of mould - they discovered the cause was that the underfloor was very damp. They notified landlord’s agent who had 10 sub-floor vents installed. This did not solve the mould problem. On 14 November 2014 the tenants found new premises and gave a 14 day termination notice citing dampness and mould. On 28 November, the tenants obtained an expert’s report which concluded:

“The property is considered a Grade 4 Building Contamination as per the Australian Mould Guideline (AMG-2010-1), whereby visible mould growth occurs on greater than 25% or more than 10m2 on interior surfaces; this means that the house is not fit for habitation until mould remediation has been completed. No personnel/occupants should enter the property without the appropriate full Personal Protective Equipment…”

Decision The Tribunal found that the tenant was justified in giving the termination notice before the lease had ended because the premises were affected by rising damp ‘giving rise to high levels of condensation facilitating the growth of mould’. The Tribunal Member rejected the landlord’s argument that the tenant had misused the property by failing to ventilate. The landlord had not solved the damp/mould problem since being notified. The landlord was ordered to refund excessive rent (under s 44(1)(b) RTA) of $230 pw (for bedroom 3 based on comparable rentals) from 11 April 2014 to 28 November 2014, in the amount of $7,590; and to pay compensation of $15,000 to reimburse the cost of professionally decontaminating the tenants’ goods before they could be relocated to their new accommodation (under s 63(1) RTA). The bond was refunded in full and no break costs were claimed for early termination of the lease.

#2 Raats v Zein [2016] NSWCATCD 62 – 2016

Facts The tenants had just moved into a townhouse at Waitara when they noticed mould infestation in the air conditioner filter, in the linen cupboard and in the ceiling (caused by water entry) and throughout Bedroom 3 which could not be occupied due serious health risk (respiratory disruption). The mould gave off a foul odour. They notified the managing agent, but soon afterwards they decided to vacate because the premises were not habitable. They gave immediate notice of termination of lease (only 14 days after the lease started).

Decision The Tribunal found that the premises were not ‘fit for habitation’ because ‘the mould infestation was extensive and constituted a serious health risk’. This was a very serious breach by the landlord of his obligation under the lease to provide habitable premises, and the tenants were entitled to terminate the lease and vacate the premises immediately. The landlord was ordered to reimburse the tenants $1,741.00 for removal costs and $22.08 for a special reading of the electricity meter.  The rent paid in advance and rental bond were refunded.

#3 Waller v Pacorp Holdings Pty Ltd [2017] NSWCATCD 5 – 2017

Facts The tenant had leased a one bedroom home unit at Cremorne since 2005. In August 2015, the tenant contacted the landlord’s agent to report mould on the ceiling and on the walls (water entry from roof / guttering). The agent recommended the property be properly ventilated and the tenant purchase a spray and wipe product with clove oil. The tenant requested that the corroded window fixings be replaced to allow the windows to be opened to improve ventilation. Nothing was done. In April 2016, the landlord’s agent advised that the mouldy blinds would be replaced, the walls and ceilings sanded back and re-painted. Nothing was done. The landlord issued a 90 day termination notice in September 2016. In November 2016, the tenant began sleeping in her lounge room because the bedroom was affected by mould throughout.

Decision The Tribunal granted a rent reduction of 25% for the period from October 2015 to January 2017 (64 weeks) of $6,015 for loss of services and facilities because the premises were affected by mould and inadequate ventilation arising from lack of proper window locks (s 44(1) RTA). The Tribunal ordered the landlord to pay compensation for mould damage to pictures and prints of $1,380, curtains $108, and 30% of the replacement costs for bedding, clothing and accessories and a travel bag, in the amount of $3,063.75 (s 63(1) RTA), after taking into account their age and prospects of rejuvenation.  Finally, the landlord was ordered to reimburse the tenant $999 for the expert mould report she obtained.

#4 Jupiter St James Pty Ltd v Jin; Jin v Jupiter St James Pty Ltd [2019] NSWCATCD – 2019

Facts The tenant had leased a two bedroom luxury apartment at Potts Point since 2016. He entered into a new 12 months lease from 16 July 2018 at a rent of $5,518 per month. He lived alone and occupied the second bedroom. When his mother visited, she occupied the main bedroom. On 16 July 2018 he notified the landlord’s agent of water damage to the carpet in the main bedroom from a leak in the vanity in the ensuite. The agent responded quickly, but the leak was not quickly fixed and mould and odour became a problem over the next 3 weeks. The tenant obtained a medical certificate on 8 August, and on 15 August moved to a hotel on account of ‘significant health risk’ due to the mould, although his mother stayed on. On 30 August he gave an immediate termination notice and moved out that day.   

Decision The landlord claimed the break fee of six weeks rent of $7,620 was payable for the early termination of the fixed term lease because the tenant had abandoned the premises (s 106 & 107 RTA). The Tribunal rejected the tenant’s argument that the premises had become uninhabitable (under s 109 RTA), because the ‘impact could have been contained by closing the door to the ensuite bathroom and keeping it sealed’ and there was another bathroom that could be used. Therefore, the premises were habitable and the break fee was payable because immediate termination was not justified. But the tenant was successful in claiming compensation of 25% of the rent payable for the period 17 July 2018 to 30 August 2018, in the amount of $2,041. This was for loss of quiet enjoyment because of the removal of parts of the carpet, the damp and mould odour, and the unsightly damage to the skirting boards and baseboards; the visits to the premises by the landlord’s insurer, plumbers, and other tradespersons; and the communications necessary with the landlord’s agent (under s 50 RTA). The Tribunal rejected the tenant’s claim for reimbursement of the cost of hotel accommodation.

What do the case studies tell us about mould in rental houses and home units?

  • Landlords must provide habitable premises and take pro-active measures to prevent mould. This means preventing moisture building up through rising damp or trapped moisture by installing passive and mechanical ventilation (vents and fans) and fixing and sealing leaky rooves, gutters, faulty pipes and leaky windows to prevent water penetration.
  • If mould is present at any time during a tenancy, it is the landlord’s legal obligation to treat the mould and its cause.
  • Tenants have an obligation keep the premises ventilated by opening windows and doors and to report mould and dampness to the landlord.
  • An expert’s mould report may make recommendations to a landlord and provide evidence for a tenant to claim compensation and to terminate. But expert reports can be costly. Photographs and correspondence with the landlord or the rental agent are acceptable evidence in many cases.
  • The tenant may receive a rent rebate in the order of 25% from the time they notify the landlord’s agent of the mould until they are able to fully use the premises again.
  • If the mould is severe, the tenant may immediately terminate the lease without paying a break fee and be reimbursed moving expenses.
  • If the mould is severe, the tenant may also be entitled to claim the cost of decontamination of personal possessions and compensation for damage to clothing and goods.
  • Landlords should replace carpet (which soaks up water and is prone to mould) with timber floors, vinyl floorcoverings or tiles when renovating.
  • Where the premises are a townhouse or home unit, and water is entering from outside, the owners corporation should be notified and requested to fix the water entry.