Is this Snell Isle property a 'lovely' home or a mold-infested teardown?

The listing agent on this foreclosed Snell Isle home in St. Petersburg says he was unaware a former owner had moved out after it was flooded by sewage.
The listing agent on this foreclosed Snell Isle home in St. Petersburg says he was unaware a former owner had moved out after it was flooded by sewage.
Published Feb. 19, 2016

ST. PETERSBURG — Several years ago, a sewage pipe backed up and flooded a home in St. Petersburg's upscale Snell Isle neighborhood.

Mold began to grow. It grew on the furniture, it grew on the walls. It grew in the walls. The mold got so bad that the owner was hospitalized with respiratory problems and finally moved out. Two years ago, facing foreclosure, she put the house on the market with this prominent warning:

"Property being sold for land value. Seller discloses that property has been contaminated by sewage and mold. Property may not be habitable in current condition."

A contract to buy and knock down the house fell through when the bank rejected the offer. The house was pulled from the market, foreclosed and relisted this month. Here is how it is described now:

"Lovely and spacious pool home."

How could a house become "lovely" after being so "contaminated" that almost everyone agreed it needed to be torn down? Christopher Hounchell, the original listing agent, is among those wondering.

"I saw it go back live and thought, 'Interesting,' " Hounchell said. "I can tell you that when I had it listed, it was not a safe environment."

The saga of the Snell Isle house illustrates one of the major drawbacks of buying a foreclosed home, especially one that has sat vacant for months. It may be difficult to tell what has transpired since the borrower moved out, what if any work has been done and whether the people who did the work corrected all the problems that might be present — if not always obvious.

The current listing agent on the house, Gus Mistak, told the Tampa Bay Times that he was aware only of water damage in a back room caused by a leaky roof.

"I don't say it was or wasn't (a mold issue) because I don't have any inspection reports," said Mistak, who was hired by Fannie Mae, the government-backed mortgage insurer, to help sell the house.

But after the Times inquired further, Fannie Mae temporarily pulled the home off the market.

"There's no evidence in anything we have at this time to suggest an environmental issue," spokesman Andrew Wilson said Thursday, "but we're going to do some testing to make sure."

Mold can irritate the eyes, skin and throat, and cause nasal stuffiness, coughing and wheezing, according to the Centers for Disease Control and Prevention. People with chronic lung illness may get serious infections in their lungs when they are exposed to mold.

Mold grows in places with a lot of moisture, such as around leaks in roofs, windows or pipes where there has been flooding. That is what started the problems in the 1970s-era house at 1559 Eden Isle Blvd.

Lizbeth Perez bought the house in 1988 and moved out in mid 2013, city utility records show. She could not be reached for comment. The court file of a 2008 case in which Perez sued a restoration company she hired to try to remedy the problem has been destroyed. But Hounchell, who listed the house in 2014, fills in some details.

"It started a handful of years ago with a sewage backup from the main sewer pipe coming from the house," he said. "She came home to inches of sewage in the house. She went to do remediation and that was unsuccessful, then did another that was unsuccessful. She could never get ahead. She was hospitalized because of the degree of mold infestation, every bit of her furniture was covered with it."

When he entered the house, Houncell said, he noticed a moldy smell and saw both black mold and what looked like a "dusty, yellow-green mold."

"Most of it started in the back where there was a hole in the roof — the roof issue led to most of the water intrusion by the end — but there was mold in other areas. For example, she tried to remove and replace a wall, but that didn't resolve the problem and, unfortunately, it had traveled to other areas as well."

Hounchell said Perez was "very adamant" about fully disclosing the mold and sewage issues when she listed the house as a short sale in July 2014 for $250,000.

"We did not want to risk anybody buying the property and moving in" without knowing of potential hazards, he said. Everyone who wanted to see the property was asked to sign a disclosure statement before going in.

Hounchell said even seasoned real estate flippers, who repair and resell existing homes, were taken aback by the extent of the mold.

"They would say, 'I'm not afraid of anything,' then they got there and said, 'Wow, this is interesting,' " Hounchell said. "Almost everybody I talked to said, 'Yes, I would tear it down.' "

The lender rejected two offers, one from a prospective buyer who definitely planned to raze the house, the other from a person who wanted to wait until he owned the house to decide, Hounchell said. The house was withdrawn from the market after Fannie Mae, which had insured the mortgage, foreclosed last July.

On Feb. 4, Fannie Mae put the house up for sale for $419,000 through its HomePath program. The descriptions on both the HomePath website and in the Multiple Listing Service touted it as:

Lovely and spacious Eden Isle Pool Home. Large living room opens to dining area. Second master suite could be used as an in-law apartment. The large back yard with its sparkling pool is certain to be an oasis perfect for entertaining. Property has brand new roof!

Most Fannie Mae single-family foreclosures are sold through HomePath, which gives people who intend to live in a house the first crack at buying it. If no owner-occupiers emerge within a certain period, anyone can bid. All properties are sold "as is," although Fannie Mae sometimes pays for work, including mold remediation, to "increase a home's marketability."

Fannie Mae didn't authorize any remediation on the Snell Isle house.

Mistak, the current agent, said he was aware of the previous listing description, which said the house had been "contaminated by sewage and mold." He said he thought, however, that any problems might have been exaggerated so the lender would be more likely to approve a short sale. He then referred further questions to Fannie Mae.

Wilson, the spokesman, said that neither the appraisal on the house nor a broker's price opinion mentioned any environmental issues.

"We're skeptical of it," he said of mold problems, "but we're going to do our due diligence to see what, if anything, we can find. We certainly want to make sure there are no issues with the property."

Fannie Mae did pay $13,000 to repair the leaky roof — that work was done in December, five months after Fannie Mae acquired the house. It also paid to replace drywall in one room, which Mistak said appeared to be caused by water damage, and then paint the home's interior.

Scott Samuels, a Realtor who handles foreclosed properties, though not Fannie Mae homes, said mold is not uncommon in houses that have sat vacant in steamy Florida. Most banks pay to have mold-infested areas remediated "because they don't want the liability," but generally do not replace the drywall that is removed, he said.

"You go into a house where sometimes the wall has been cut from the baseboard 4 feet up and you know what happened. There was water in the house that seeped into sheetrock, that's where mold grows," he said. "When I say remediate, they generally cut it out and leave for somebody else to fix."

His recommendation for anybody buying a home, bank-owned or not, visible mold or not: Hire a home inspector. "They're the first ones to put up a red flag and say, 'I think you need to take this further,' " Samuels said.

For now, the Snell Isle house remains on the HomePath website. But the price has been removed and a note says: Coming soon.

Susan Taylor Martin can be contacted at or (727) 893-8642. Follow @susanskate.