A tenant fell in love with a property at first sight before renting, only to discover after moving in that it was riddled with mold, with mushrooms even growing on the walls. Must one simply accept such misfortune? Does the landlord leasing such a "mushroom house" constitute a breach of contract? Recently, the Minhang District People's Court in Shanghai concluded a case concerning a housing lease contract dispute.
In June 2023, tenant Xiao Li, accompanied by a sales agent from a certain property management company (the lessor), viewed a two-bedroom apartment that was still occupied but about to be vacated. At the time, although the unit contained a large amount of furniture purchased by the previous tenant, Xiao Li was very satisfied with the apartment's layout and overall decoration style. Consequently, Xiao Li signed a written lease contract with the property management company on the same day and paid the security deposit and first installment of rent based on a "one-month deposit, three months' rent" standard.
However, on the day of taking possession, after the previous tenant's furniture was cleared out, Xiao Li discovered that the walls in the bedrooms and balcony had extensive mold, peeling wallpaper, and even mold growth culminating in mushrooms, resulting in a pungent odor inside the unit. Simultaneously, the bathroom required complete demolition and reinstallation due to waterproofing issues, rendering it unusable in the short term. Xiao Li repeatedly contacted the property management company to report these issues, but the progress on the wall repair plan was slow, taking a total of 12 days from the initial report until the repairs were substantially completed. During this period, Xiao Li personally purchased the necessary paint for the wall repairs. Furthermore, for the two days the bathroom was under repair, making the unit completely uninhabitable, Xiao Li had no choice but to stay temporarily in a hotel.
After the repairs were finished, Xiao Li believed the property management company should refund the rent for the 12 days the unit was under repair and compensate for the expenses incurred on paint, cleaning fees, and hotel accommodation, totaling over 5,000 yuan. When negotiations over the responsibility for these costs failed, Xiao Li sued the property management company in court.
During the proceedings, the property management company argued that Xiao Li had inspected the property on-site before signing the lease and should have been aware of its condition, claiming the wall issues did not significantly affect livability. Therefore, the company only acknowledged that the two-day bathroom repair impacted Xiao Li and refused to accept liability for the other repair periods or the costs Xiao Li paid independently.
After hearing the case, the Minhang District People's Court determined that providing a living environment meeting safety and hygiene standards is a core obligation of the lessor. This duty encompasses not only providing facilities with basic functionality for rental purposes but also ensuring the property does not endanger the tenant's health, life, or property safety. Evidence, including chat records, indicated that repairs to the wallpaper, walls, and bathroom all caused significant inconvenience to the tenant's basic living conditions. From both biomedical and general public standards, it was difficult to conclude that the defendant had fulfilled its obligation to provide a healthy, safe living environment for the plaintiff, thus constituting a breach of contract.
The court rejected the lessor's defense for exemption based on the tenant's pre-contract inspection. At the time of viewing, the apartment was filled with the previous tenant's furniture, which objectively concealed severe issues like wall mold. It was reasonable that Xiao Li could not fully discover such defects during a brief viewing. Unilaterally inferring that the tenant voluntarily accepted all existing flaws, especially major ones impacting health and safety, thereby absolving the lessor of fundamental contractual duties, was inconsistent with the law, and this ground for exemption was unsupported.
Given that both parties agreed to continue the contract, the plaintiff was entitled to demand the defendant bear liability for breach through repairs or rent reduction. Considering the severity of the defects, the scope, and duration of the repair impact, the court found the costs claimed by the plaintiff necessary, aligned with market rates, and reasonable, thus warranting support.
Ultimately, the court fully supported plaintiff Xiao Li's claims, ruling that the defendant property management company must pay various fees totaling over 5,000 yuan. Neither party appealed the first-instance judgment, which has now taken effect.
In a housing lease relationship, the lessor has the right to lease the property and collect rent, but this right is bounded by clear legal limits: the lessor must ensure the property meets safe and hygienic living standards, fulfilling the fundamental responsibility of guaranteeing the tenant's residential safety. According to Article 708 of China's Civil Code, the lessor must deliver the leased property as agreed and maintain its suitability for the intended use throughout the lease term. Combined with relevant judicial interpretations and industry management norms for housing leases, the property provided by the lessor must meet basic living conditions like safety and hygiene, protecting the tenant's health and property safety.
In this case, the involved property had severe conditions at delivery—extensive wall mold, peeling wallpaper, and failed bathroom waterproofing—that seriously compromised living safety and hygiene, even leading to mold growth and mushrooms. This clearly violated the fundamental health and safety standards required for a habitable dwelling, constituting a breach of the core contractual obligation of "habitability." Therefore, the tenant had the right to claim compensation under relevant laws.
When a leased property has defects, such as severe mold growth potentially endangering the tenant's health and safety, these are not minor flaws easily remedied by general repairs. Following the spirit of Articles 563 and 731 of the Civil Code, such defects can directly lead to the "frustration of the contract's purpose." Here, the tenant's purpose was to obtain a safe, hygienic living environment, a core objective substantially undermined by the "mushroom house" condition. Thus, before the lessor effectively repaired the property and restored its habitability, the tenant had the right to refuse acceptance or request a rent reduction. Furthermore, reasonable expenses incurred from self-help measures taken to mitigate losses, directly resulting from the lessor's breach, could be claimed as damages by the tenant.
The lessor's duty of habitability and the tenant's right to proper use form the legal balance in fulfilling a housing lease contract. Disputes in practice often stem from neglecting or improperly fulfilling these statutory obligations. Lessors should ensure structural safety, hygiene compliance, and functional integrity—free from leaks, mold, and with usable water, electricity, kitchen, and bathroom facilities. Before delivery, potential hazards should be proactively identified and repaired; after delivery, repair requests from tenants should be promptly addressed. Good faith performance is the cornerstone of avoiding disputes and building reputation.
For tenants, a thorough pre-contract inspection is crucial, potentially with photos or videos for evidence. If serious habitability defects are discovered after moving in, the lessor should be notified immediately, and evidence preserved to facilitate subsequent amicable negotiations or legal action to protect one's rights. Integrity and responsibility are the soil that nourishes the healthy development of the rental market. May every handover of keys carry trust and peace of mind.