Yesterday, I looked at paragraph 12A in the San Francisco Real Estate purchase contract. That’s the paragraph that gives a buyer the right to inspect the property to their heart’s content, and walk away from the purchase if they aren’t satisfied with the condition of the property or aren’t able to come to a new understanding with the seller after the inspections disclose additional (unknown) information. Today we look at paragraphs 12C and 12D, in which the buyer either stipulates a structural pest control inspection contingency (12C) or waives their right to one (12D).
If you are working with a good agent, and the property has been on the market for more than 10 minutes, you will hopefully review a disclosure package before making an offer. Disclosure packages often contain a structural pest inspection that was paid for by the seller. Depending on who completed the structural pest inspection, your agent will either advise you that they are a reputable and trust-worthy firm providing reliable information that you can rely upon for the purchase or they are a company that they are not familiar with, and you may wish to ask for the right to do a pest inspection with a firm of your own choosing.
Structural Pest Control inspections are regulated by the California structural pest control inspection board, and any reports generated are considered public information, a copy of the report can be requested by any interested party (they are available for two years after the date of inspection). This is different from other types of inspections, which are considered a private report between the inspector and the party paying for the report.
Liability, in a pest inspection, runs with the property, not with the individual who contracted for the report. As I understand it, this is why it is common practice to accept a pest inspection in San Francisco paid for by the seller and performed by a reputable company.
We will look in detail at a pest inspection report in tomorrow’s post, but there are several common misperceptions about the contingency:
- If a pest report in San Francisco contains what are known as Section I items (areas of active damage), the seller is not required by law to repair or credit the buyer for the cost of the repair. If your bank is aware of the inspection report, they may require repairs, but it is not law. Local custom varies by area, and in San Francisco the local custom is that as a buyer you should not expect work to be completed prior to the close of escrow.
- Despite the name “pest” a structural pest inspection is really looking for signs of damage and decay to wood from contact with the ground, moisture or other conditions that cause decay. It is concerned primarily and most useful for understanding the condition of wood windows, doors, and foundation of a wood framed property.
- Just as with an inspection contingency, you have the right to ask for repairs, a credit towards your costs, a reduction in the contract price, or any other item that you wish to request. If you cannot come to agreement with the seller, you have the right to terminate the agreement and walk away with a full refund of any deposits you have made.
Disclaimer: Real Estate transactions are governed by a contract. I am not an attorney, nor am I qualified or attempting to give legal advice. This blog post looks at one specific version of one specific contract (published by SFAR) and I discuss how the pest inspection contingency generally works in San Francisco real estate transactions. This post is not intended to be nor is it a substitute for legal advice, and if you are currently in a deal, there may be specific circumstances, documents or agreements that modify the operation of this contingency. Do not operate heavy machinery while under the influence of drugs or alcohol. Brush your teeth and floss daily.