A Maryland-licensed pest control company (“Defendant”) paid a $89,000 settlement for a pre-closing negligent termite inspection. Whitney, LLP obtained the settlement for a client (“Buyer”) who purchased a home with extensive termite damage that was not detected by a negligent termite inspection, formally known as a pre-closing Wood Destroying Insect (“WDI”) Inspection. After moving into their new home, Buyer discovered a major termite infestation and termite damage.
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Whitney, LLP has extensive experience representing homebuyers in negligent termite inspection claims across Maryland.
Negligent Termite Inspection Misses Evidence of Termites
Prior to purchasing the residence, the Buyer hired a pest control company to perform a Wood Destroying Insect Inspection (“WDI”). The WDI inspection includes but is not limited to detecting signs and evidence of termites among insects that are harmful and destructive to wood.
The WDI inspection was performed and a written report was prepared on the state mandated MD-1 Form (“WDI Inspection Report“). The WDI Inspection Report stated: “No Visible evidence of wood destroying insects was observed.”
Failure to Report Visible Evidence of Termites
A properly performed WDI Inspection of the Property would have included an inspection of the exposed main beam and joists in the unfinished basement, which is a typical location where termite inspectors find evidence of termites. There were no obstructions or inaccessible areas to obstruct or prevent a competent WDI inspector from observing the exposed beam and joists, which were visible by looking up.
Photographs taken in the basement at the time of the inspection, show termite shelter tubes on the exposed main beam, which the pest control inspector should have observed and reported on the MD-1 Form.
A termite inspection consultant hired by Whitney, LLP determined that termites had been present for several years prior to the Contract of Sale and that evidence of termite shelter tubes and termite damage in the basement of the Property was visible and obvious to any competent WDI inspector.
Maryland WDI Report
Buyer Relied on the WDI Inspection Report
Pursuant to the Property Inspections Addendum to Buyer’s contract to buy the Property, Buyer had the right to terminate the contract if the results of a WDI inspection were unsatisfactory. Based on the WDI Inspection Report, Buyer was provided with no factual basis for concluding that the results of the inspection were unsatisfactory.
If the inspector had reported the visible evidence of termites, Buyer would have requested an evaluation by a qualified structural professional to determine the scope of damage, including hidden damage, and need for repairs. But based on the careless WDI Inspection, Buyer had no reason to request a structural evaluation. Buyer was led to believe that the Property was free of termite infestation and free of any termite damage.
Buyer read the WDI Inspection Report, and upon being informed of no visible evidence of wood destroying insects, decided to go forward with the purchase. They closed and moved into their new home.
Discovery of Termite Damage
Soon after moving in, Buyer noticed in the front entrance what appeared to be rotted wood and little piles of granular debris which turned out to be termite frass. Another termite inspector inspected the Property and found active termites located in the front sill plate and along the main support beam, and stated that this represented many years of termite infestation and damage.
The contractor hired to open walls discovered extensive termite damage. He evaluated the basement joists, removed insulation, and discovered that the damage was widespread, extending on many joists, subflooring, hardwood flooring, the sill plate, band board, door frame, wall framing up to the second floor, and two door headers. The Property was structurally unsound.
Extensive repairs required replacing the entire front of the Property, removing and replacing damaged hardwood flooring, sub flooring, basement joists, exterior siding and shutters, band board, and sill plate.
Liability for Negligent Termite Inspection
Maryland licensed pest control companies are obligated by Maryland law to comply with the Code of Maryland Regulations, including the standards governing both the general responsibilities for conducting a pest inspection and the specialized responsibilities for performing a WDI inspection made in connection with a property transfer or for the purpose of securing a real estate loan. Failure to comply with the Regulations is evidence of negligence.
The legal requirements and standard of care for pest inspections are set forth in COMAR 15.05.01.14 (“Regulation 14”). Regulation 14.A sets forth the general responsibilities that apply to pest inspections performed by licensed pest control companies. It prescribes that pest inspections be performed by “a person who is competent to determine the presence of target pests or their damage.” See Regulation 14.A. “Each inspection shall include a careful visual observation and thorough examination of the readily accessible area, object, material, structure, or part of a structure inspected.” See Regulation 14.A(1). The inspector shall report all findings in writing and shall indicate “any findings or visible evidence of the target pest or pests.” See Regulation 14.A(1) & (2).
Regulation 14.B. contains additional specific requirements for performing “inspections for wood destroying insects made in connection with a property transfer or for the purpose of obtaining a real estate loan.” See Regulation 14.B. A person performing the WDI inspection, shall “[s]ound or probe readily accessible structural members to inspect for wood destroying insects, and direct particular attention to the following readily accessible areas of the structure under inspection: . . . (c) Interior Basement. The interior basement area shall be inspected.” See Regulation 14.B(1).
Regulation 14.B also requires the results of a WDI inspection to be reported on a mandatory standardized form, known as the MD-1 Form. See Regulation 14.B(2). The MD-1 Form must indicate any visible evidence of wood destroying insects, “including a description of the specific location of damage and insect, or insects involved, and must indicate any visible damage observed.” See Regulation 14.B(2)(i) & (j).
A negligent termite inspection violates these regulations and creates liability for the company that did not meet its standard of care.
Home buyers who are deceived as to the condition of the purchased property have many legal rights.
Violations of the Maryland Consumer Protection Act (“MCPA”)
Defendant misrepresented that there was no visible evidence of termites or termite damage, failed to disclose that its inspection did not comply with COMAR, and failed to disclose that there was visible evidence of termites and termite damage. The MCPA applies to a variety of consumer transactions, including real estate sales.
In performing the WDI inspection and providing the WDI Inspection Report, Defendant impliedly represented that it had performed a proper inspection in accordance with COMAR. Maryland case law recognizes an implicit representation that Defendant complied with the law in conducting its business.
Defendant’s misrepresentations violated MCPA Section 13-301(1) because they were false and misleading and deceived or misled Buyer. Defendant also violated MCPA Section 13-301(2) because it misrepresented that Defendant’s services had a characteristic, use, or benefit that they did not have.
Defendant’s omissions violated MCPA Section 13-301(3) because they were omissions of material facts that deceived Buyer. The sale would not have gone through in the absence of those misrepresentations and omissions.
Negligent Misrepresentations
Based on the facts, Maryland law recognizes a cause of action for negligent misrepresentation, which allows recovery of economic losses.
Under Regulation 14, Defendant had a duty to perform a careful visual observation and thorough examination of all readily accessible areas and to make full disclosures of all material information on the MD-1 Form.
Defendant also had a duty to exercise reasonable care in obtaining and communicating in writing material information, including the fact that the Property had evidence of termites and termite damage. Defendant failed to exercise reasonable care by performing the negligent termite inspection.
Defendant’s misrepresentations and omissions were made in the course of Defendant’s business, in a transaction in which Defendant had a pecuniary interest, and for the guidance of Plaintiffs in their purchase of the Property. Buyer suffered pecuniary loss by their justifiable reliance on Defendant’s misrepresentations and omissions.
Settlement and Compensation for Negligent Termite Inspection
In order to expedite the resolution of their claim, and avoid the expense of depositions and a trial, Buyer agreed to a settlement that accounted for the approximate costs of repairs, renovations and termite treatment.
In addition to repairs, renovations and termite treatment, compensation for a negligent termite inspection can include attorney’s fees, loss of use, other economic losses and emotional distress.
Daniel W. Whitney, Jr. and Daniel W. Whitney of Whitney, LLP
Maryland Negligent Termite Inspection Lawyers – Whitney, LLP
Whitney, LLP has represented numerous home buyers who discovered termite damage after moving into their new homes. In some of these cases, termite damage was hidden on purpose, which is fraud. In other situations, a pest control company performed a negligent termite inspection that the home buyer relied on in deciding to purchase the home. In either case, home buyers have many legal rights and can use Maryland law to hold the necessary parties responsible.
Contact Whitney, LLP for a consultation at 410 583 8000, or use our Quick Contact Form.
We represent clients across Maryland including Annapolis, Baltimore, Rockville, Glen Burnie, Bethesda, Salisbury, Ocean City, Dorchester and Laurel.
Of course, prior results are not a guarantee of future results, and all cases are different.
