Can a Real Estate Lawyer Help With Termite Issues?

Termites damage more than $5 billion worth of property annually in the U.S. Researchers have found these pests in every state in the U.S. except for Alaska. According to a journal of science, termite activity increases in warmer temperatures and occasionally with increased rainfall.

A standard homeowners insurance policy does exclude termite destruction, which puts homeowners at risk of facing financial problems. In relation to this issue, most homeowners bring up the question, “Can a non-termite company make termite repairs?” One common question that might arise is whether termite infestations in real estate properties can be addressed by a real estate attorney.

A real estate lawyer would not be able to do away with termites in the property but their expertise in the legal system helps guarantee that termite problems mainly originating from property transactions or issues between buyers and sellers are adequately addressed. Termite damage can severely reduce the property's value in the United States along with its structural integrity and may even result in a legal obligation when nondisclosure is part of the whole transaction.

A real estate attorney plays an indispensable role in reviewing contracts. These legal professionals will see to it that proper disclosures are made. Lawyers will also help in facilitating negotiations involving property repairs and credit. A real estate attorney would work for the client to resolve disputes arising from termite inspection reports.

Let's discuss the function of a real estate lawyer concerning termite issues.

Why Termite Issues Matter in Real Estate Transactions

Termite infestations provide no warning signs for their arrival. Termite infestations normally start within building materials which include walls and subfloors and structural beams. By the time the termite damage is discovered, the structural damage caused by these pests could quickly approach the amount of $100,000. 

The National Pest Management Association has estimated that in 600,000 U.S. homes, termites are causing damage per year. Since termite problems are preventable, most homeowners' lease agreements specifically do not cover them.

The financial stakes extend beyond mere repair costs. A documented termite history can affect market value and buyer demand. Lenders may delay or condition closing on a property with active infestation. Certain loan programs require a clear wood-destroying insect report before funding. 

Wood-destroying insect inspections are required for VA loans in moderate-to-heavy or extreme infestation risk zones for northern to nearly all southern states and mid-Atlantic states. The inspection results are entered onto the NPMA-33 form, which remains valid for 90 days until the closing date.

Homes with existing termite issues can complicate the buying process, which is why consulting an experienced lawyer is recommended before making a purchase. According to New London real estate lawyer Raymond L. Baribeault, real estate attorneys will help guarantee that the purchase or sale of your home is as easy and stress-free as possible.

Disclosure Requirements and How They Vary by State

Most states have laws that require home sellers to reveal any known material defects about the property. Heavy termite infestation or damage typically falls under this obligation if the seller knows about it. The statutes of various states determine how and to what extent a disclosure will be made.

Many states have specific questionnaire-style forms that address current and prior pest infestations and treatment. Other states use material defect language to show that termite damage requires disclosure, but the assessment of disclosable conditions remains open to disagreement between parties.

A few states retain modified forms of “caveat emptor," which places greater inspection responsibility on the buyer and narrows what the seller must affirmatively disclose. The jurisdiction permits parties to file fraud claims when termites damage a property and the defendant actively hides the issue or makes false statements. 

A real estate lawyer can confirm what the governing disclosure statute requires in the transaction's state and whether the facts in a particular case support a claim for breach.

Legal Remedies When Termite Damage Is Discovered

When a buyer discovers undisclosed termite damage after closing, the typical legal theories available include breach of the purchase contract, breach of warranty, fraudulent misrepresentation, negligent misrepresentation, and violation of the applicable state disclosure statute. 

The most common remedy that people seek through their legal actions involves monetary damages, which typically include the expenses needed for repairs and to compensate for the decrease in value of the property. 

The court system permits rescission of the sale as a remedy, which completely cancels the transaction. Courts only provide this remedy in rare cases when the property defect makes the property unrecognizable from what the parties agreed to or when the plaintiff proves intentional fraud.

The success of any legal claim that arises after a closure depends on the strength of the available proof. A buyer who wants to bring a claim against a seller must show two things: what the seller understood about the property damage and the complete extent of the actual damage. The damages to be presented should include those not found during standard pre-closing inspections. 

State law varies depending on whether liability requires actual knowledge from the seller or extends to facts the seller reasonably should have discovered. 

A real estate attorney can evaluate whether the collection of documents, which includes inspection reports and disclosure statements and contractor assessments and communications with the seller, supports the claim before the buyer chooses to start a lawsuit.

Negotiating Before Closing

Termite extermination does not always result in legal action. The parties involved in the transaction usually need to reach an agreement. The inspection for wood-destroying insects should show both current pest activity and previous damage before the deal reaches completion. 

Negotiations should lead to a seller-financed treatment before the sale date, a buyer credit at closing for treatment and repair expenses, a decrease in the sale price, or an escrow arrangement that holds funds until treatment completes. 

An attorney who specializes in real estate law can develop written contracts for these agreements, defining payment responsibilities for pest control treatment, the selection process for pest control vendors, the necessary documentation to be presented during or before the closing process, and the seller's responsibilities if new damage occurs during the treatment period. 

The presence of precise terms within the agreement keeps both parties from entering into legal disputes that typically arise after a deal is finalized.

When to Involve an Attorney

Most termite discoveries do not need legal representation. The standard process for handling an infestation, which the seller discovered before closing and which they treated with standard methods, permits the transaction to proceed without needing attorney work beyond standard contract evaluation. 

Legal representation will become important in situations wherein either party disputes estimated treatment and repair bills. A lawyer’s help is necessary if the inspection report raises major structural concerns or when a seller's disclosure document does not go in line with actual site conditions. A skilled lawyer must be called in when the buyer discovers hidden damages after the close or when the transactions involve loans requiring special inspection and clearance under VA, FHA, or other programs.

Key Takeaways

Termite problems create legal conflicts that involve multiple aspects of real estate law. These issues involve concerns such as state disclosure requirements, contract provisions lender obligations, and fraud or breach post-closing resolutions.

The party involved in the termite-affected transaction needs to schedule a wood-destroying insect inspection at an early date. This action allows negotiation to happen before closing while keeping all inspection documents, disclosure documents, and written communication with the other party. 

The party needs to comprehend state regulations, which determine both mandatory seller disclosures and available remedies for insufficient disclosure. The party must also seek legal advice from a real estate attorney whenever the situation indicates a dispute about responsibility distribution, cost sharing, and post-closing obligations.