It's very important not only for your plants but also for your home that mold does not get started. If you're smelling it now you could already be in trouble so I'd be looking closely under the carpet or anywhere else mold likes to hide and grow and if you find any you ought to be looking for a different closet while the current one gets gutted and thoroughly cleaned out...ASAP!

Put some plastic sheets on the floor or whatever else you have around to keep moisture from going any further than the surface and mop up any and all residue. Molds and mildue are nothing to mess with and have ruined many homes once allowed to take hold.