The following is the opinion of this company to the best of our understanding. Any clarification of Real Estate law should be obtained from a licensed Real Estate agent or broker. The following is listed with the paragraph designations of the Residential Purchase Agreement 01/06.


4. ALLOCATION OF COSTS:
Paragraph 4 defines by checkbite which reports, inspections, tests , or services will become part of the purchase agreement and which party is paying for such reports, inspections, tests , or services.

"Wood Destroying Pest Inspection"

Paragraph 4 A(1) defines which party is to obtain the Wood Destroying Pest Inspection, which inspection company is agreeable to both parties and which structures are to be inspected. Negotiations as to who pays for recommended repairs is described in paragraph 14 B(2). This option seems to leave the contract contingent for a specified time frame to allow the buyer to perform an adequate investigation of the condition of the property and to then negotiate repairs.

Paragraph 14 B(2) states the time period for the buyer to perform inspections/investigations and request the seller to make repairs or take any other action regarding the property (default 17 days). If paragraph 4A(1) is checked, the seller has no obligation to agree to or respond to the buyers request. Within the time specified, the buyer must approve the reports and remove contingencies. Further agreement to make repairs or take any other action regarding the property would be listed in an "Addendum" to the Purchase Agreement. If agreement is not reached concerning repairs within the specified time, the seller appears to have the right to cancel the contract and return the deposit.

Paragraph 4 A(2)
If this option is checked instead of paragraph 4 A(1), responsibilities for costs associated with recommendations made in the Wood Destroying Pest Inspection are defined in advance and made part of the Residential Purchase Agreement on a form called the "Wood Destroying Pest Inspection and Allocation of Cost Addendum", C.A.R. form WPA. Other details of paragraph 4 A(1) appear to be the same (see above). The only exception appears to be that 4 A(1) does not require the report to be "Separated" into Section One and Section Two whereas the Addendum does specify a "Separated" report. Most Brokers I know are using the Addendum.

KEY RECOMMENDATIONS for the WDO Addendum

Only the main building will be inspected unless the appropriate boxes are checked to indicate inspection of a detached structure. I would not limit myself to the first two check boxes as not all detached structures will be called a "garage", "carport" or "deck". Detached structures such as a Barn, Cabana, Gazebo, Pool House or Patio may be more descriptive and written in under "Other Structures". Advise us of the structures to be inspected when you order an inspection. We recommend that all structures you are concerned about be inspected and that the main residence inspection be issued on a separate report so that Certification can be issued on the main residence. Give thought to how you will provide the reports on the detached structures and which, if any, of these detached structures the seller is willing to perform recommended repairs. If the check boxes are used and detached structures described, the terms of the Addendum would seem to apply to those structures as well. Unless otherwise directed, we will inspect the main building and structures physically attached or abutted to the main building only.

For Condominium Units, the WOOD DESTROYING INSPECTION REPORT may be limited to the interior of the condominium only as most Home Owners Associations are responsible to maintain the common areas. The inspection should be limited to the "separate interest and exclusive use areas being transferred" as spelled out in the contract. However, we are required by the Structural Pest Control Board to inspect the entire unit up to the common wall (for full disclosure) unless otherwise directed. It is our advice that if the owner is responsible for the "interior only", that the owner or agent should request the inspection be limited to the interior only. We are required to disclose in the report the person requesting the limited inspection. The owner or agent should be careful to have all areas inspected which they are responsible to maintain. Some common areas, hot tubs, decks, patio covers or enclosure fences may be areas which are considered "separate interest and exclusive use areas being transferred".

Watch out for Inaccessible Areas listed on the report. Buyers should request further inspection or risk purchasing hidden problems. Some areas are more likely than others to have significant hidden problems. Inaccessible areas below wood decks are one example where significant section one problems may exist (especially on decks more than 5 years old). If the buyer requests the inaccessible are be made accessible and inspected, the cost of opening, closing and inspection are the responsibility of the buyer. However, if infestation, infection or damage are found in the course of this further inspection, the cost of corrective measures become the responsibility of the seller of the property.

Certification only applies to visible and accessible areas inspected. Certification is not a warranty. Hidden problems may still exist (especially if further inspection was recommended and not completed). These are commonly discovered when a new owner remodels upon moving in. Termite companies do not legally bear any liability in such circumstances.

Certification means that the property free of visible evidence of active wood destroying pests (termites, beetles, etc.) and organisms (fungus). Other significant problems may still exist (roof leaks, shower pan leaks, etc.).

REPAIRS

Generally, repairs are completed prior to the close of escrow. However, due to busy schedules, it is often not possible to complete the recommended work prior to the close of escrow. In such cases, adequate additional funds should be held in case hidden problems or unforeseen costs are disclosed during the course of repairs.

All work is to be completed in accordance with local building code. Some repairs may result in a different appearance due to the availability of matching materials.