General information, not legal advice

Termite Inspections When Buying or Selling a Home in Tennessee

Buyers and sellers in Manchester and Coffee County often ask me about the termite inspection, often called a termite letter. This guide explains what that inspection is, who in Tennessee is allowed to do it, what the report covers and what it leaves out, when VA and FHA loans call for one, and what sellers should know about termite contracts and the disclosure form.

Everything here comes from the Tennessee Code, the Tennessee Department of Agriculture, the U.S. Department of Veterans Affairs, HUD, the EPA and UT Extension. This is general information, not legal advice. For your own home, talk with a chartered pest control company, your lender and, for legal questions, a Tennessee attorney.

What a wood destroying insect report is

Tennessee law calls the termite letter a wood destroying insect infestation inspection report. Under TCA 62 21 102, it is a report written by a chartered commercial pest control operator that employs someone licensed in the category of wood destroying organisms. The report shows whether there are visible wood destroying insects, and visible damage from them, and it must be issued after an inspection at the property.

The national form most companies use is the NPMA 33, Wood Destroying Insect Inspection Report. The copy posted on HUD's website says the form is approved for FHA and VA loans, and it lists the insects it covers: termites, carpenter ants, carpenter bees and reinfesting wood boring beetles. It does not cover mold, mildew or other wood destroying organisms that are not insects.

A home inspection does not cover termites

Under TCA 62 6 302, a Tennessee home inspection report must state that it does not address wood destroying insects and organisms. That is why the termite inspection is a separate step from the home inspection, done by a different kind of professional. My home inspection guide explains what a home inspector does cover and how to verify a home inspector license.

Who can do a termite inspection in Tennessee

TCA 62 21 201 says that a wood destroying insect report issued with the sale or transfer of real property may only be issued by a chartered pest control operator that is licensed, or employs people licensed, in the category of wood destroying organisms. The inspection itself must be done by someone licensed in that category, or by a certified technician working under the direct supervision of that licensee.

The Tennessee Department of Agriculture (TDA) issues the charter, and it says a charter is required for each business location. Its license category for wood destroying organisms covers termites, various wood borers, carpenter bees, carpenter ants and decay. TCA 62 21 205 makes it a Class A misdemeanor to issue a wood destroying insect report without a valid charter and a license in that category.

How to check a company, from the TDA consumer tips:

• Look up the company in the TDA charter company search, or check the TDA list of chartered companies if you do not know the firm.
• TDA says a pest control company may do business legally in Tennessee only if its charter number is visible on the company vehicle.
• Ask to see the applicator's pesticide certification or license card.
• A company representative selling services should have a solicitor card issued by TDA.

What the report must include

TCA 62 21 202 says the report is submitted on forms prescribed by the National Pest Management Association and HUD, and it must include at least:

• The address of the property
• A graph or other diagram showing the layout of the property
• The areas of damage or active infestation, if any
• The name of the licensed or certified employee who did the inspection
• The pest control operator name, address and charter number
• The date of the inspection
• Any recommendations for corrective action

The law also says obstructions and inaccessible areas must be noted. The NPMA 33 has a section for them, with examples such as stored items, floor coverings, insulation and areas with no access.

The 90 day warranty in Tennessee law

This is the part of Tennessee law that matters most to buyers. TCA 62 21 202 says a wood destroying insect report is a warranty for 90 days of the accuracy of what it says. The person the report is issued to may recover damages for a breach of that warranty, including repair costs that are proximately related, and a company that knowingly issues a false report, or issues one without physically inspecting the site, is liable for three times the damages.

TCA 62 21 203 adds a step before a lawsuit for damages: the company that issued the report must be given a chance to inspect the home and, within 30 days of that inspection, offer a proposal for repair and treatment.

Two details are worth knowing:

• The warranty covers the accuracy of the report. The report describes visible insects and visible damage on the day of the inspection. It is not a promise that the home will never have termites.
• The form language is not the whole story. The national NPMA 33 form says it is not a warranty unless one is required by state regulations or a written warranty is attached. In Tennessee, the statute supplies the 90 day warranty, and TDA says the same thing in its consumer tips.

What the inspection does and does not cover

The NPMA 33 describes a visual inspection of the readily accessible areas of the structures listed on the report, including attics and crawl spaces that allow entry, with probing or sounding of accessible areas. The form says:

• It is not a structural damage report. If insects or damage are found, some degree of damage, including hidden damage, may be present, and the form recommends asking a qualified structural professional about the extent of damage and any repairs.
• Hidden areas are not opened up. The inspector does not remove moldings, floor coverings, wall coverings, siding, insulation, furniture or personal items.
• Tight crawl spaces may be skipped. A crawl space, or part of one, may be called inaccessible if there is less than 24 inches of clearance below the floor joists.
• The inspector is independent. The form states that the company and the inspector have no interest in the property.

If an area was listed as inaccessible and is later opened up, the form says the company can be contacted for another inspection.

VA loans in Tennessee

VA's local requirements page lists Tennessee among the states where wood destroying insect information is required for the entire state before the Notice of Value is issued. VA training materials based on the VA Lenders Handbook say:

• The appraiser must report any apparent evidence of wood destroying insects, fungus growth or dry rot.
• The pest control operator must meet all state requirements, and state required inspection forms are acceptable.
• Inspection reports are valid for 90 days.
• For new construction, a soil treatment guarantee from the builder is preferred and satisfies the condition.
• Units in stacked condominium buildings generally do not need an inspection unless the appraiser notes a possible problem.

VA Circular 26 22 11 says repairs identified on the report that are needed to meet VA's Minimum Property Requirements must be completed before VA guarantees the loan. It also says veterans may be charged for the inspection where the Notice of Value requires it, and may pay for required repairs, and it encourages veterans to negotiate those costs with the seller. My VA loan guide covers the rest of the VA process.

FHA loans

HUD Handbook 4000.1 says that for an existing home, the FHA lender must confirm the property is free of wood destroying insects and organisms. The FHA appraiser must look at the foundation and perimeter for evidence of wood destroying pests. If there is evidence or notice of infestation, including a prior treatment, the appraiser makes the appraisal subject to inspection by a qualified pest control specialist, and the lender must then obtain that inspection and evidence of any required treatment. The loan file must include the NPMA 33 or the state mandated infestation report, as applicable.

For new construction, the handbook generally calls for a builder's subterranean termite guarantee on form HUD NPMA 99 A, or a service record on form HUD NPMA 99 B when certain treatments or barriers are used, unless the county is on HUD's exception list. My FHA loans guide and home appraisal guide explain how the appraisal fits into an FHA loan.

Lenders can have their own requirements for any loan, including conventional and USDA loans, so ask your lender early whether it needs a wood destroying insect report and how recent it must be.

If you are buying a home

Your purchase contract decides who orders the inspection, who pays, the deadline and what happens if insects or damage are found, so read it closely. A few practical steps:

• Plan the timing. VA treats a report as valid for 90 days, and the NPMA 33 says the report is invalid for a mortgage or settlement if it is not used within 90 days of the inspection. A delayed closing can mean a new report.
• Read the whole report. Look at the findings, the recommendations and the list of obstructed or inaccessible areas, not just the check box at the top.
• Ask about an existing termite contract. If the seller has one, ask for a copy and whether it can transfer to you.
• Get the right expert for damage. If damage is noted, ask a qualified structural professional or contractor to look at it, as the NPMA 33 recommends.

The NPMA 33 also has a place for the buyer to sign that they received both pages, and a place for the seller to disclose what they know about past insects, damage, repairs and treatment. My earnest money guide explains when your deposit may be at risk if you miss a contract deadline.

If you are selling a home

• The disclosure form asks about a termite contract. The Tennessee Residential Property Condition Disclosure form in TCA 66 5 210 lists a current termite contract among the items the seller checks if the property includes it. The form says it is not a warranty and is not a substitute for inspections. My seller disclosure guide explains who must give the form and when.
• Gather your records early. Treatment contracts, annual inspection records and any repair receipts help answer buyer questions. The NPMA 33 lets the seller disclose known insect, damage, repair and treatment history.
• Expect the buyer's lender to ask. With VA financing, a report is required anywhere in Tennessee, and with FHA it depends on what the appraiser sees. Many buyers order one on other loans too.

My prepare to sell checklist covers the rest of getting ready, and my guide to selling as is explains how repairs work when you would rather not make them.

Termite treatment contracts in Tennessee

Tennessee rule 0080 09 04 .08 sets what a chartered company's contract for wood destroying organism control must include:

• A written contract signed before treatment, with a copy for the customer
• The inspection date and a graph of the property showing where visible insects or damage were found
• A provision allowing the contract to be transferred to later owners or renters during its term
• A unique contract number
• For termites, a one year warranty that provides for retreatment
• Any damage guarantee is optional, and a contract without one must say so in letters one half inch tall on the front

The same rule requires the company to inspect each property under contract every year and to retreat and update the graph if new termite activity is found. Copies of annual inspection and treatment records must be available within 48 hours of a request by the contracting party, and the company must keep contracts for two years after they expire.

TDA's consumer tips add that you should ask to be shown the damage and verify that termites are present before you sign a treatment contract, and ask about treatment options, since bait systems and liquid treatments work differently. UT Extension says that if termite damage is found, do not be pressured into buying services before you do your homework, because there are many treatment options. The EPA says firms offering termite services must be licensed by the state, and that you can ask for a copy of the product label.

Signs of termites and prevention

UT Extension calls subterranean termites the most destructive wood feeding insects in Tennessee. Colonies live in the soil and enter homes through wood or foundation walls that touch the soil, and on slab homes through expansion joints, cracks and utility openings. Signs to know:

• Mud tubes. Workers build shelter tubes, usually about the width of a pencil, on foundation walls and wood.
• Swarmers. Winged termites are often found at windows. UT Extension says people often mistake winged ants for termites. The EPA says termite wings are roughly equal in length with straight antennae, while ants have longer front wings and bent antennae.
• Damaged wood. UT Extension says damaged wood will be soft and channeled. The EPA suggests probing exposed wood for hollow spots.

Prevention tips from the EPA, UT Extension and the NPMA 33:

• Keep soil around the foundation dry with good grading, gutters and downspouts
• Fix leaks right away
• Keep vents clear and plants off the siding
• Keep mulch, firewood, landscape timbers and wood debris away from the foundation
• Avoid wood in direct contact with soil
• Have a professional inspect regularly. UT Extension suggests an inspection at least once a year.

If something goes wrong

TDA says it can investigate substandard termite treatments when there is a current contract, a failure to issue a termite contract and a failure to retreat an active termite infestation. It does not handle pricing, payment disputes or property damage disputes. Problems with a wood destroying insect report itself fall under the warranty and dispute steps in TCA 62 21 202 and 62 21 203, so talk with a Tennessee attorney. For questions about a pesticide, the EPA points consumers to the National Pesticide Information Center at 1 800 858 7378.

Termite inspection steps at a glance

1. Check your contract for who orders the inspection, the deadline and how findings are handled.

2. Ask your lender whether it requires a report and how recent it must be. With a VA loan in Tennessee, it does.

3. Hire a chartered company licensed in wood destroying organisms and check it in the TDA charter search.

4. Read every page of the report, including obstructed and inaccessible areas.

5. Ask the seller about any termite contract and whether it transfers.

6. Keep my home buyer checklist and real estate glossary handy.

Keep reading:

• Home inspections in Tennessee
• Radon testing when buying or selling in Coffee County
• Tennessee seller disclosure explained
• Buyer closing costs in Tennessee
• Buying a home in Manchester, step by step
• All Manchester guides

Fair housing laws protect every buyer and seller, and I work with every client the same way.

Buying or selling in Manchester?

I help buyers and sellers in Manchester and across Coffee County plan inspections, read the reports and work through repair talks so the closing stays on track. Call or text me at (615) 497 1658, or request my buyer guide below and tell me what you are looking for.

Common questions

Matt Sargent is a Tennessee licensed affiliate broker with Keller Williams who helps buyers and sellers in Manchester and Coffee County. Call (615) 497 1658 or send a message.