Termite Tutorial: Don’t Let Your Largest Investment Get Eaten

There’s a joke about there being two kinds of homes in the South – those with termites and those that will have termites. The little insects cause big problems and most homeowner’s insurance policies don’t cover the damage. Here’s what you need to know if selling, buying or building a home in the Charleston area.

The four most common species of termites in South Carolina are subterranean. These termites feed on cellulose found in wood and other construction materials. They look like ants and have wings approximately equal in length to their body. Now that it’s spring, you may see them swarm. But thousands of dollars of damage can occur before there are outward signs.

The CL-100 Explained

The CL-100 (a.k.a. termite inspection) is the official South Carolina wood infestation report. It can only be performed by a licensed South Carolina inspector, who is required to carefully inspect for termites, other wood destroying insects and fungi. The inspection for fungi or fungi damage (water-damaged wood, wood rot or decay) is limited to any areas below the first main floor of the structure. If an inspector finds a moisture level over 20%, he or she will recommend some type of moisture control. For example, they may suggest installing a moisture (vapor) barrier in a crawl space.

The inspector is required to report any evidence of active or past infestation of termites or other wood destroying insects or fungi in the CL-100 letter. Just as in a home inspection, the report specifically excludes hidden areas and areas not readily accessible.

Most property sale contracts include a CL-100 contingency clause. The listing agent and buyer agent negotiate who orders and pays for the inspection on behalf of their clients at the time an offer is made. The report is valid for up to 30 days and is due prior to a stipulated number of calendar days before closing (typically 10 to 15).

Many banks, lenders and buyers require that sellers correct problems prior to closing. Sometimes a licensed contractor or engineer may advise on whether there is structural damage to the property.

A clear CL-100 is good for closing but does not guarantee that there won’t be a future infestation. Home owners should take preventative measures to protect their investment.

Why You Want a Termite Bond

A termite bond is a contract or “insurance” or “warranty” policy that a homeowner has with a termite control or an exterminating company. There’s usually an initial treatment and annual inspections.

Companies differ in cost and what they provide. Be sure to compare and clarify your coverage. Review the fine print. Do they cover all insect and fungi damage? Do they cover treatment but not associated repairs? What amount of repair coverage do they provide? To check a licensed pest control operator, visit an official review site maintained by the state Department of Pesticide Regulation. 

There are different types of bonds. In the Charleston area, a Repair Bond makes sense. The company agrees to pay for damages caused by termites up to a limit. The company I use (Palmetto Exterminators) covers up to $250,000.

Termite bonds are expensive to renew or initiate versus the cost to maintain one. So, it’s a plus to be able to transfer an existing one. If the home you’re purchasing has a transferrable termite bond, call to initiate the transfer. Some companies, but not all, charge a transfer fee. But prevention is far less expensive than repairing. 

Susan Matthews is a Realtor with Coldwell Banker in greater Charleston, SC. Contact her for more information.

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