Hello, I am happy to assist you today.
You did the right thing to contact the health department. Did they issue a violation to the landlord?
Your niece should not have to live there if there is a real mold problem right now, especially with a young child living there. The landlord actually has to give her an alternative place to live. You mentioned moving apartments, is there the same problem in this apartment?
The health department will issue a violation if they test and find that the mold is dangerous. Some types of mold are not dangerous. Your niece should also send a letter to the landlord explaining the problem, if she hasn't already. That is important to have in writing and will give her grounds to break her lease if nothing is done.
The landlord has to take quick action to fix the problem once he is aware of it. So within a reasonable time it should be fixed. In the meantime, she is entitled to stay somewhere else at the expense of the landlord (even a hotel) and also she doesn't have to pay rent while there is this problem.
Worst case, if the landlord does nothing, she can just move out and stop paying rent. If the landlord comes after her for the rent she can explain to the judge what happened and she should be ok.
I hope this helps.