Can't Mask That Smell? Disclose or Pay Later

Richard Montgomery on Aug 5, 2025

Reader Question: We purchased a property from a bank in March. Now we've found that it has an odor in the house. We have been unable to either identify or fix it so far. Here are my questions: For rental, if the tenant was notified and accepted the condition regarding the odor, could it be addressed by adding terms to the rental contract that would prevent future trouble related to the smell, such as being sued, or? For selling the property, we can hire a professional company to remove the odor, but they cannot guarantee that it will not return. Do we have to disclose the smell even if it wasn't there before closing? Can the buyer sue us for not revealing the scent when it returns after the buyer has purchased it?

Monty's Answer: Foreclosed properties may sit empty, utilities off, windows closed, pets or mold undisturbed, so odors sometimes announce themselves only after heat, humidity or everyday living awakens them.?Your two concerns revolve around the same core issue:?identify the source, not just the symptom.?Here is a roadmap that will likely work well:

No. 1: Start with an experienced home inspector who has many "extra" tools. Sewer cameras, thermal imaging cameras, and air quality monitors are examples of extra tools. If you cannot find such an inspector in your area, hire an environmental or industrial hygienist. Common culprits include mold colonies, sewer gas from a dry trap, decomposing animal remains in walls and many others. Laboratory data will help determine whether you are facing a health hazard or simply a nuisance.?

No. 2: Documentation matters. It forms the backbone of any disclosure, lease clause, or resale packet, and demonstrates that you acted prudently.?If you decide to rent before curing the odor, a transparent lease addendum can help, but it is not a guarantee.?Courts generally enforce clauses that waive claims for known, described defects, provided the tenant entered the deal voluntarily and the defect does not breach the implied warranty of habitability.?However, "habitability" encompasses safe and sanitary air.?A sewer-gas leak or mold spore count above EPA guidelines is unacceptable; a lingering stale-smoke smell may be.?Your addendum must describe the odor, note the investigative report, advise the tenant to conduct independent inspections, and recommend renters' insurance.?Still, if a child develops respiratory issues traceable to hidden mold, the waiver is no longer applicable.?Landlord liability insurance with pollution coverage becomes your next layer of defense.?

No. 3: Preparing a property for resale requires a higher standard of disclosure. All states require sellers to disclose any material condition that could affect value or health. Odor history qualifies.?A buyer who later detects the same smell may argue you masked, not cured, the cause, and pursue damages for misrepresentation or concealment.?Your best shield is a paper trail:?the inspector's initial report, invoices for professional remediation, a clearance report showing post?treatment air quality within normal limits, and any warranties the contractor provides.?Provide these documents with the standard property?condition report and keep copies.

Finally, budget realism.?If testing reveals easily fixed sources, such as dry traps, carpet pad odor or nicotine film, cure them before the tenancy or listing.?If the report uncovers systemic mold or chemical contamination, weigh the remediation estimate against probable resale gain.

Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with options to real estate issues. Follow him on Twitter (X) @montgomRM or DearMonty.com.

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