Tuesday, April 5, 2016 / by Nicole Solari
Amidst the complexities and potentials for misunderstanding in a residential real estate transaction, the subject of termite work is surely a standout. Not only do buyers and sellers often have mistaken beliefs about what is and isn't required, but also agents are liable to be unclear about various options that may be open to them and their clients. (To be clear: we are not just talking about termites here, but also other wood-destroying pests such as dry rot or some kinds of beetles).
We should begin, then, by noting the most common misperception: that a termite clearance is required by law before a residential property can be transferred. It simply isn't so. Nor, as is commonly believed, is a termite clearance required by all mortgage lenders. Some may have such a requirement, just as some programs, like V.A., may require a termite clearance. What is common, though, is that if a termite clearance is called for in the contract between buyer and seller, the lender will not fund until the work -- if needed for a clearance -- is done.
Corrective termite work can be very expensive. Again, there may be programs such as V.A. that require the seller to pay; but this is generally open to negotiation. It wasn't that many years ago that, in Southern California, agents treated it as a matter of course that sellers would be responsible to pay for corrective termite work. This has changed over the past few years as a result of changes in both the standard purchase contract form and in the repair-request forms. While it is probably true that sellers most often pay for termite repairs, it is clearly a negotiable item. A seller may limit the amount he will contribute to repairs, or he may refuse to pay anything at all. (Of course the buyer may walk away, too.)
Oftentimes a seller may already have a recent termite report for the buyer to examine. Indeed, he may have already had the corrective work done. This would be similar to the seller having a completed home inspection (and possibly having had the work done) available for the buyer's review. While such reports -- whatever they say -- would be material facts that should be given to the buyer, they do not preclude the buyer from ordering his own inspection. Indeed -- especially if the first inspector is unknown to the buyer or his agent -- that would be a prudent thing for a buyer to do. Even though pest control inspections follow a more standardized format than to general home inspections, there's still enough room for individual differences and judgment calls that seeking a second opinion may well be warranted.
When a report shows that work is needed, and the buyer requests that the work be done (regardless of who is to pay for it) he wants to be sure to specify that any statement of completion will include a pest control certification or "clearance" stating that there is no longer evidence of active infestation or infection by wood-destroying pests. It wouldn't be sufficient, for example, simply to receive a statement from a handy-man that he had replaced all the wood that had dry rot.
Moreover, it is not uncommon for pest control reports to offer alternative methods of treatment. Typically, tenting (fumigation) will be the recommended and preferred form of treatment. Often, though, the report may also offer a secondary form of treatment (e.g. "spot" treatment), and sometime this may be for a good reason. For example, a condominium that shares roof and attic space with other units may not be able to do tenting. Nonetheless, if alternative methods of treatment are indicated in the report, the buyer wants to be sure he is clear as to which kind of treatment he requests. Buyers should not simply request that corrective work be done without first seeing the report.
California consumers who have questions about these things can go to the Structural Pest Control Board web site at www.pestboard.ca.gov.
Nicole Solari | RE/MAX Gold | Top Producing Agent in Solano County