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A landlord has 21 days from the date that the tenant vacates the property to refund the security deposit. However, if the tenant owes rent, because the tenant has vacated without providing 30-days notice -- or, if a fixed-term lease, then before the lease end date, then the landlord does not have to refund the deposit, if the unpaid rent exceeds the security deposit amount.
The tenant would have to prove that the rental unit was untentantable as of the date that the tenant vacated the property, in order to recover the security deposit. The presence of mold, may or may not be sufficient cause. In my opinion, however, it's not the mold, itself that is in play, but rather the water in the basement. The tenant is entitled to live in an environment free of standing water, because there are other water-born illnesses that are more serious than mold, which can negatively affect the tenant's health.
That said, it remains the tenant's burden to prove in court that the rental was untenantable. Otherwise, the court will not order a refund of the security.
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