A termite letter is an inspection
report which shows the existence of active or previous infestation of
subterranean termites and other wood-destroying organisms. The inspection
report is a standard state form which reveals whether there is any
earth-to-wood contact on the property, if there were any areas of the structure
that were not inspected, and if it appears that any previous termite treatment
has been performed. The inspection letter often contains exclusions of
liability printed on the back.
Most lenders require a termite letter
dated within 30 days of the date of closing, indicating that the improvements
are free from active infestation and damage. Depending on the type of loan,
lenders may have heightened requirements concerning the termite letter. As soon
as the termite inspection is performed, the buyer should ensure that his lender
receives a copy of the report. Some states do not require that a seller provide
a termite letter for closing; however, the contract generally places the burden
of supplying this letter on the seller.
A termite bond is a contract between a
property owner and a termite treatment company which addresses future termite
infestations. There are two basic types of termite bonds: a retreatment bond
and a repair bond. A retreatment bond obligates the termite company to retreat
the property in the event that a future termite infestation is detected. A
repair bond not only obligates the company to retreat the property if
termites are found, but also to repair any damage caused by the infestation.
Generally, a dollar amount limit for the repairs is specified in the bond.