When a Mould Complaint Becomes a Property Dispute

A residential mediation offers useful lessons for commercial landlords, site managers, developers and their advisers.

A report of mould can look, at first, like a straightforward maintenance issue. Someone identifies a problem, the cause is investigated and the necessary work is carried out. In practice, the dispute can become much wider. The people involved may disagree about when the problem began, what caused it, who was responsible for investigating it and whether the response was adequate. By the time lawyers become involved, the condition of the property may be only one part of what needs resolving.

I recently mediated a residential landlord and tenant dispute that illustrated this progression. The tenant sought financial compensation in connection with mould at the property. The landlord, who had bought the property with retirement in mind, believed they had acted reasonably and done what they could. The tenant felt that her concerns and personal circumstances had not been treated with sufficient care. Both were representing themselves, and their correspondence had become increasingly emotional. The  mediation took place online without a joint session as, by this point, they couldn’t even be on a screen together. Although the claim had a stated financial value, it was clear from the correspondence that each party also wanted their account of events to be understood.

The details of that residential matter remain private. Its lessons, however, are familiar to anyone responsible for a commercial building: an unresolved defect can quickly become a dispute about communication, evidence, responsibility and trust.

Why the response matters as much as the defect in mould and other property disputes

When a complaint is raised, the first useful question is usually factual: what is happening at the property, and what needs to be done now? Yet correspondence often moves rapidly towards a different question: who is to blame? A landlord may point to the steps already taken. An occupier may point to the time they have spent living or working with the problem. If neither feels heard, each new email can harden their position.

In the residential mediation, discussing the claim as a single figure initially left little room for movement. We therefore examined its elements separately. That allowed both parties to acknowledge parts of the other’s experience. The tenant could explain why particular events mattered to her; the landlord could explain what action they believed they had taken. From those smaller discussions, a settlement figure emerged that the tenant considered a fair acknowledgment and the landlord was prepared to pay to bring the matter to an end.

That outcome did not require the parties to agree on every aspect of the history. It required enough understanding of the issues to find a practical resolution. For property professionals, the earlier lesson is to avoid letting an entire relationship turn on one broad assertion that a complaint was either “dealt with” or “ignored”.

The commercial costs can spread far beyond the repair

In a commercial property, damp or mould may affect stock, equipment, staff working conditions and the occupier’s ability to use part of the premises. Investigations can involve a site manager, managing agent, landlord, tenant, surveyor, contractor and insurer. Where a building has several occupiers, a water ingress or ventilation problem may raise questions about common parts or adjoining units. In a newly developed property, the developer or original contractor may also need to be involved.

None of this establishes who is legally responsible for a particular defect. That will depend on the facts and, often, the lease and other contractual documents. A repair obligation, a tenant’s alterations, access arrangements and insurance provisions may all be relevant. The source of moisture may itself be disputed. A stained wall might be evidence of a building defect, condensation associated with how the space is used, or a combination of factors requiring proper investigation.

While those questions are being answered, the practical costs may continue to grow. A tenant may have to move stock, restrict access to an area or spend management time arranging inspections. A landlord may incur surveyor’s fees, further contractor visits and the cost of coordinating work around an operating business. If communication deteriorates, the parties can also find themselves debating rent, remedial works and alleged losses through solicitors before anyone has agreed a reliable account of the underlying problem. Some losses may ultimately be contested or unrecoverable, but that does not stop the dispute itself consuming time and money.

A better approach from the first report

The strongest starting point is a clear record. The person receiving the complaint should note what has been reported, where the issue appears, when it was first noticed and whether there is an immediate operational concern. Photographs, inspection findings, contractor recommendations and dates of attempted access should be kept together. A record should distinguish between what someone has observed, what a professional has concluded and what remains uncertain.

The response also needs an owner. If a site manager arranges an inspection but the landlord must approve works, the occupier should know who is coordinating the next step and when to expect an update. Silence can be interpreted as inaction even while people behind the scenes are trying to resolve the matter. Equally, a quick assertion about the cause, made before an adequate investigation, can make it harder to have a constructive conversation later.

Commercial parties should review the relevant lease and obtain advice where responsibility is unclear. They can still take sensible steps to investigate and limit further damage while reserving their respective positions. A joint inspection, an agreed scope for an independent surveyor or a shared timetable for works may preserve both the property and the working relationship. The purpose is to establish dependable facts and deal with what can be dealt with, even if questions of liability remain open.

Where mediation helps

There will be disputes in which correspondence and expert evidence are enough to reach agreement. Others become stuck because each party has developed a firm account of what happened, and every proposal is read through that history. Mediation gives them a structured opportunity to examine the issues together, with the assistance of an independent mediator, without requiring them to abandon their legal position.

In a commercial mould dispute, that discussion can go beyond a demand for payment or a denial of responsibility. The parties might address access for investigation, the choice of expert, temporary measures, a programme of works, communication with occupiers and how any financial claim will be assessed. If the evidence is incomplete, they may be able to agree the next step needed to obtain it. If some issues are ready for resolution and others are not, they can explore a partial agreement.

My experience in the residential case reinforced the value of breaking a dispute into its component parts. It helped the parties move from entrenched positions towards a figure they could both accept. In a commercial setting, the same approach can be particularly valuable because the parties may need to continue dealing with one another after the immediate problem has been resolved. An agreement that addresses both the building and the way future concerns will be handled can be more useful than a settlement figure alone.

A mould complaint deserves prompt investigation. It also deserves careful communication. When a commercial property dispute has already developed, mediation can help the parties establish what matters most, test workable proposals and regain control over a problem whose cost may otherwise keep rising.

If you are dealing with a similar situation, please contact me for a confidential conversation about your options.

Marianne Clark, Calm Waters Mediation