In our market, real estate agents typically use either the AS IS Residential Contract (“AS IS Contract”), or the Residential Contract For Sale and Purchase (“Standard Contract”). When using the AS IS Contract, the Inspection Period allows the Buyer to conduct any type of inspections as they see fit. Conversely, when using the Standard Contract, the Inspection Period allows for only three types of home inspections: General Repair Inspection, Wood Destroying Organism (“WDO)” Inspection, and a Permit Inspection. The Standard Contract does not require the Seller to permit any inspection other than the required three, nor does it specify the course of action in the event of any other type of inspection is performed. Buyers commonly request two other inspections:
1) a mold inspection, and
2) a pest inspection for rodents, bees, and bats.
Neither of the aforementioned inspections are warranted under the Standard Contract. So, how would these inspections be able to occur under a Standard Contract?
How Do I Add a Mold Inspection to the Standard Contract?
Incorporate Rider I. Mold Inspection (“Mold Inspection Rider”) into the Standard Contract to enable the Buyer to inspect the property for mold presence. The Mold Inspection Rider details that the Buyer has a certain number of days after the Effective Date to have the property inspected for mold. If left blank, the Mold Inspection Rider defaults to 20 days. The Buyer must deliver a copy of the written mold inspection report to the Seller upon discovering any evidence of mold or related damage.
Further, if the mold inspection reveals the presence of mold that requires remediation or repair at a cost which exceeds the value agreed to between the Buyer and the Seller (if left blank, then the cap defaults to $500), then the Buyer is able to cancel the contract by providing written notice to the Seller within the Mold Inspection Period and obtain the deposit back. If mold remediation amounts to equal or less than the agreed-upon threshold in the Mold Inspection Rider, the Seller must treat the property, and the parties will proceed with the Closing Date.
How Do I Add an Inspection for Pests to My Contract?
The Standard Contract defines WDO as “arthropods or plant life, such as termites, powder-post beetles, old house borders, and wood-decaying fungi, which cause damage or infestation in seasoned wood within a structure, excluding fences.” Section 9(a)(ii) of the Standard Contract discusses the WDO limit in dealing with WDO treatments and repairs. Excluded from the WDO definition are rodents, bees, bats, and other non-wood destroying organisms. Many Buyers request pest inspections as part of their due diligence when purchasing a property in Florida.
Unlike the Mold Inspection Rider, the FAR/BAR does not offer a rider for additional pests. However, you can add language in the Additional Terms section of the Standard Contract or create a formal addendum to include a pest inspection. Parties can either amend, in the Additional Terms section or in an addendum, that the WDO definition shall include rodents, bats, and bees, or amend Section 9(a)(ii) to equally apply to treatments and repairs for rodents, bees, bats, and other pests that may be found in a pest inspection report. By including either language, the Seller will be required to treat the property for rodents, bees, and bats, up to the set limit in the Contract.
As always, should you have any questions or specific concerns on how to include a Mold Inspection, a Pest Inspection for bats, rodents, or bees, or any other type of home inspections under the Standard Contract, please contact an experienced real estate attorney.