03/16/09: Swarming Termites

Housing Counsel

By Benny L. Kass

Q: We recently bought a house in Maryland. The pest report from the seller only reported some termite damage in the basement where there was water damage. Right after we moved in, we saw lots of swarming insects in the bedroom. We were horrified. We called a few pest control companies and they all identified the flying insects as dampwood termites. And they also said it most likely happened in the past, especially when the previous owned lived in the house for over 20 years. We talked to the neighbors and they said it has happened many times before. But the sellers didn’t disclose anything about termites. When asked, the sellers said they never saw the swarming termites before. It is going to be costly to find out the source of the problem and to fix it. This was totally unexpected. Are the sellers responsible for some of the repair?

A: I have never heard of “dampwood termites” but learned from an internet search that this is a breed of insects found primarily in the Pacific coast. Are you sure that your termite people didn’t say “drywood”?

Your first mistake was to allow the seller – or the seller’s agent – to arrange for the termite inspection. I make no accusations, but always prefer to do my own investigations, rather than rely on the other side. This way I can only blame myself for any mistakes.

You received a report that there was termite damage in the basement. Did you pursue this further? What kind of damage was there? If you used the Regional Sales Contract – the form generally used in the Washington Metropolitan Area – it states (in paragraph 16) that any “extermination and structural repairs identified in the inspection report will be made at Seller’s expense”. Did you ask the seller to make any repairs, or at least give you a credit at settlement?

Did you get a disclosure from the Seller? Although sellers in the District of Columbia are required to provide full disclosure of the condition of the house, in Virginia and in Maryland, seller’s can opt not to make any such disclosures. In those situations, potential homebuyers must retain the services of a qualified home inspector who will carefully review each and every inch of the house. In fact, I recommend that all potential buyers have a contingency built into their sales contract, giving them the right to terminate the contract (or at least negotiate for a credit at settlement) should the inspection report find problems.

Did you use a home inspector? Although inspectors are not pest inspectors and are not obligated to disclose the existence of termites, my experience is that most will at least flag potential termite problems for you during their inspection.

You may have a case against three possible parties:

– the sellers, especially if they provided you with a disclosure form that did not mention the termite situation;

– the pest inspection company. Here, you will need to hire another termite company that will inspect the property and be prepared to testify.

– the home inspector. If you had an inspection before closing, and the inspector did not disclose that he has no legal obligation to determine the presence of termites, you may have a case. However, Maryland law protects these inspectors. If you signed a contract with inspector stating that should you find problems, the inspector’s liability will be limited to the money you paid for the inspection, that is all you will get. It should be noted that the District of Columbia Court of Appeals recently modified this; if you can prove negligence on the part of the inspector, you may be able to get actual damages, rather than only the cost of the inspection. Hopefully, someone will bring a case in the Maryland Courts so that this law can be changed to at least track the D.C law.

Contact the Maryland Department of Agriculture, since they regulate and license Pest Control companies.

You should consult with your attorney as to the merits and the feasibility of filing a lawsuit. Litigation is time consuming, expensive and always uncertain.

If you are planning to buy a house, here are some suggestions:

– insist on obtaining your own home inspector. Ask your real estate agent and your neighbors for suggestions. A competent agent should give you at least two names, so as to avoid any appearance of a conflict of interest. You can also get names from the American Association of Home Inspectors (www.ashi.org). Take time to walk the property with your inspector. Good inspectors play three roles. First, they inspect the house to make sure that there are no problems – minor or major. Second, you will be advised as to short and long term maintenance that will be required should you decide to buy the property. Third – and in my opinion – equally important, you will learn how the various mechanical and electrical equipment works. For example, you should know where the main electric box is located, how to turn off the water and where the various utility meters are.

– arrange for your own termite inspection and once again, attend the inspection.

– if the seller provides you with disclosures, read the document very carefully. You should get this no later than when there is a final sales contract. Show it to your home inspector, who can confirm the validity of those disclosures.

If you find problems before settlement, you have leverage against the seller. After closing, it may be too late.