Mould in a NSW Rental Property: Landlord Responsibilities and Liability

The Core Question: Is It Structural or Lifestyle?

NSW law draws a hard line between mould caused by building defects and mould caused by tenant behaviour. Where that line falls determines who pays.

Structural and building defects — rising damp, subfloor water pooling, leaking internal plumbing, compromised roof tiles, inadequate structural ventilation — are the landlord's problem. These constitute a direct breach of Section 52 of the Residential Tenancies Act 2010, which requires premises to be in a reasonable state of repair, not subject to significant dampness, and not allowing water penetration.

Tenant lifestyle factors — drying laundry indoors without ventilation, failing to operate installed exhaust fans, neglecting basic cleaning — shift liability to the tenant. But the evidentiary burden rests heavily on you as the landlord: you must demonstrate that adequate ventilation infrastructure was provided and fully operational.

What the Law Actually Requires of Landlords

If mould results from a structural defect, you must fix the underlying cause — not just the visible mould. Surface treatments like wiping mould with bleach or painting over damp plasterboard do not fulfil your statutory obligations if the wall structure or carpet fibres remain contaminated.

Section 52(1B) specifically states that premises must be in a reasonable state of repair, not subject to significant dampness, and not allow water penetration. Mould from a leaking roof, failed waterproofing, or a cracked pipe is a clear breach.

NCAT Rent Reductions and Compensation

When landlords fail to address structural mould, tenants can apply to NCAT for rent reduction orders. Precedent shows reductions of 20% to 30% for properties with significant mould problems, plus compensation for damaged belongings and, in severe cases, emergency lease termination.

NCAT can also issue repair orders requiring specified work. If you do not comply with a work order, the tenant can apply to renew the proceedings; NCAT orders may also be enforceable through criminal, civil penalty, or contempt proceedings.

The Ventilation Defence

If you believe the mould is caused by tenant behaviour, your strongest defence is proving the property has adequate ventilation. That means:

• Working exhaust fans in every bathroom and kitchen
• Openable windows in habitable rooms
• Documentation showing these were functional at the start of the tenancy (condition report entries, photos)
• Evidence you responded to any reported exhaust fan failures

Without this documentation, it is harder to show that tenant behaviour caused the mould. The evidentiary burden rests heavily on you to show that adequate ventilation was provided and working.

What to Do When a Tenant Reports Mould

1. Inspect within a reasonable time — not weeks later
2. Identify the source — is it coming from inside the wall, from a roof leak, from a plumbing failure, or from surface condensation?
3. Engage the right tradesperson — a plumber for plumbing leaks, a roofer for roof damage, a building inspector for structural damp. Not a cleaner with a spray bottle
4. Document everything — photos with timestamps, trade invoices, the condition before and after remediation
5. Follow up — check whether the mould returns. If it does, the source was not adequately fixed

Common Mistakes

Blaming the tenant without evidence. Forum discussions are full of landlords who assumed mould was a cleaning issue, only to discover (at NCAT, at cost) that the property had a waterproofing failure behind the tiles.

Cosmetic fixes. Painting over mould, wiping it with bleach, or replacing only the visible plasterboard while leaving contaminated insulation or framing in the wall. These treatments do not meet the statutory obligation if the underlying cause or contaminated materials remain.

Ignoring it. Mould does not resolve itself. A small patch in the bathroom corner today becomes a major structural remediation in twelve months.

The Rental Minimum Standards in New South Wales guide covers the full Section 52 habitability framework, including the ventilation and dampness standards that apply to mould situations, and includes a compliance tracking log for documenting your response to repair requests.

See more New South Wales guides →