The weather isn’t the only thing that heats up during the summer in the natural state…so does the housing market. If you’re involved in any part of that equation, you’re inevitably going to hear something about Termite Clearance Letters. Most people need one but few have any idea what it is, how they get it and why lenders require it.
In Arkansas, when you get a mortgage loan to buy or refinance a home or business, the underwriter (bank) will want an NPMA-33 HUD Form, also known as a WDI or WDO inspection report. WDI stands for Wood Destroying Insect and WDO stands for Wood Destroying Organism. Arkansas is a WDO reporting state which requires termite companies to report wood destroying insects, fungi, and water rot; however, this regulation is in the process of changing. Arkansas will soon be a WDI reporting state, which simply requires us to report wood destroying insects – such as termites, powder post beetles, carpenter bees, carpenter ants, and old house bores, etc. The State Plant Board, which is the governing body for the Arkansas Pest Control Industry, provides all the details of Pest Control law through their website – www.agriculture.arkansas.gov/commercial-pest-control
Below is a portion of the law regarding Letters of Clearance:
Letters of Clearance / Wood Destroying Insect and Organisms Report: Any statements as to the condition of a building pertaining to termites, or other wood destroying insects or decay fungi (Rot), other than a bid or proposal for treatment shall be considered a Letter of Clearance. Letters of Clearance shall not be issued by any person, business, or entity without first acquiring a commercial license to perform Classification 1 (Termite and Other Structural Pest Control) work. Letters of Clearance issued in connection with a real estate transaction shall be made on a form officially adopted by the State Plant Board. This form shall be the current Wood Destroying Insect Infestation Inspection Report form prescribed by HUD. Letters of clearance must be accompanied by a signed contract providing a guarantee of at least one year and a graph or diagram showing, if present, the location of active or inactive wood destroying insect infestations and visible damage. If conditions exist in the crawl space that are favorable to the possibility of moisture damage to the substructure the license holder must disclose, in the additional comments section on the form, that a moisture condition exist in the crawl space. Structures upon which letters of clearance are written must meet all conditions stated in the letter as well as all the minimum requirements for structural pest work…”
When a pest control company issues an NPMA-33 form, it must be accompanied by a Termite Contract, Inspection Report and Graph that indicates any infestations, the original treatment date, product used to treat, a one-year guarantee, and the option to renew coverage the next year. The inspection should be dated within 90 days of the loan closing date. Some properties will have existing termite contracts that may be transferable. But, any property without an existing termite contract must be treated. The cost to transfer is usually low. This usually includes an inspection and processing fee, as well as the additional renewal premium needed to extend the contract for a full year. Prices for termite treatments vary from home to home and can be determined with an inspection by a licensed pest control company. Average prices may range from $350.00 to $750.00 before sales tax.
Like many others, you may think the only stamp of approval you need comes from a home inspector. Not so fast…If using a lender, the seller will be required to get a termite inspection and contract, because banks and underwriters require a “Termite Clearance Letter.” This is for a good reason. It lets them know they’re making a good investment. Wouldn’t you want the same assurances?
The Arkansas State Plant Board looks after home buyers by making pest control companies liable for a year for any new termite infestations and the damage that may occur. They must also offer a renewal of contract at the end of their first year. Once you get a termite contract, it is a good idea to keep it up to date. I don’t know if you have priced having a wall of sheetrock and baseboard repaired lately, but it can easily cost over $1500.
So what happens next? Here at Clark Exterminating, we’ll inspect your home at least once every year to make sure your home is still termite free. Your termite contract covers treatment of any new infestations, and we’ll repair damages caused by that infestation. You never know when termites will invade your home—making yearly inspections imperative for us and for you.
As the old saying in our industry goes…
“There are 2 kinds of houses, those with termites and those that are going to get termites.”
Remember at Clark Exterminating “The Bug Stops Here!”
Little Rock: 501-228-0322
North Little Rock: 501-725-0614
Hot Springs: 501-623-2335