California termite inspection laws do not require a termite inspection every time a home changes hands. No state statute forces either the buyer or the seller to order one. In practice, inspections happen because the mortgage lender insists on one or because the buyer writes a pest contingency into the purchase agreement. Separately, sellers of most single-family homes must disclose any termite problems they already know about, whether or not a new inspection is performed.1California Legislative Information. California Civil Code CIV 1102
When an Inspection Is Actually Required
The Structural Pest Control Board licenses termite inspectors and sets professional standards, but it does not require that any particular sale include an inspection.2Structural Pest Control Board. Mission, Vision, and Values The requirement comes from somewhere else.
Lender-Driven Inspections
Government-backed loans are where inspections become effectively mandatory. The VA requires a wood-destroying insect report for every home purchase in California, statewide, and the report must be completed before the VA issues its notice of value.3Veterans Benefits Administration. VA Home Loans – Local Requirements FHA loans take a slightly softer approach: the lender must confirm the property is free of wood-destroying insects and organisms, and if the appraiser flags potential pest issues, a qualified specialist’s inspection and evidence of treatment are required before closing.4U.S. Department of Housing and Urban Development. FHA Single Family Housing Policy Handbook 4000.1 Conventional loans leave the call to the lender. Many skip the inspection unless the appraiser notices visible damage.
Buyer Contingencies
Even when the lender does not demand an inspection, a buyer can require one through the contract. The standard California residential purchase agreement allows for a pest inspection contingency, making the sale conditional on the results. If the report turns up serious problems, the buyer can push for repairs, ask for a price cut, or walk away. Pest contingencies are among the most common contingencies in California transactions, and sellers should expect to see one in almost any offer.
Reading the WDO Report
When an inspection does happen, the inspector produces a standardized document called the Wood Destroying Pests and Organisms Inspection Report, usually just called the WDO report.5Structural Pest Control Board. Wood Destroying Pests and Organisms Inspection Report It covers termites, wood-boring beetles, fungus, and dry rot, and it sorts every finding into one of two categories that drive the negotiation that follows.
Section 1
Section 1 items are active infestations or infections and the damage they have already caused. Live termites in a wall, visible dry rot in a subfloor, or fungus on framing all land here. These are current problems that need treatment or repair now. In most transactions, Section 1 findings are what drive urgent negotiations, because lenders backing government loans typically will not fund the purchase until Section 1 items are resolved.
Section 2
Section 2 items are conditions likely to lead to an infestation or infection later, even though no active problem exists yet. Soil in contact with a wood beam, a slow plumbing leak building moisture behind a wall, or poor ventilation in a crawl space are typical examples. Section 2 findings do not usually block a loan, but ignoring them is how today’s Section 2 note becomes next year’s Section 1 problem.
Who Pays
California law does not assign the cost of the inspection or the resulting repairs to either side. Everything is negotiable in the purchase agreement. The inspection itself typically costs somewhere between $75 and $300, and the buyer usually pays for it as part of due diligence.
Repairs are where real money changes hands. The most common arrangement is for the seller to handle all Section 1 items, since those represent damage that existed on their watch, while the buyer takes on Section 2 items as future maintenance. Nothing prevents the parties from splitting it differently. Some sellers offer a credit against the purchase price instead of making repairs, giving the buyer cash at closing to arrange the work themselves. That approach is common when the seller does not want to manage contractors during escrow.
If you are buying with a VA loan, pay attention to who the contract says will cover the inspection fee. VA rules prohibit the buyer from paying for the wood-destroying insect report in some circumstances, which means the seller or the real estate agent may need to absorb the cost. Your lender can confirm the specifics for your loan.
What a Seller Has to Disclose
Separate from any new inspection, California law requires sellers of most single-family homes to complete a Real Estate Transfer Disclosure Statement. This obligation comes from Civil Code Section 1102, which applies to sales, exchanges, lease-option transactions, and similar transfers of residential property.1California Legislative Information. California Civil Code CIV 1102 The statute is blunt about enforcement: any waiver of these disclosure requirements is void as against public policy.
If you are selling a home and you know about a past termite infestation, previous treatment, existing damage, or an old inspection report sitting in a drawer, it all goes on the disclosure form. The Transfer Disclosure Statement specifically asks about pest-related issues and requires the seller to provide copies of any prior inspection reports to the buyer. That duty exists whether or not the buyer orders a new inspection.
What Happens If a Seller Hides Termite Damage
Concealing known termite damage exposes a seller to serious legal risk. A buyer who finds out after closing has three years from the date of discovery to file a fraud claim under the California Code of Civil Procedure. The clock does not start when the sale closes; it starts when the buyer actually discovers the concealment.6California Legislative Information. California Code of Civil Procedure 338
The financial exposure goes beyond paying for the repairs. If a court finds that the seller intentionally concealed a material fact, the buyer can pursue punitive damages on top of actual losses. Under Civil Code Section 3294, punitive damages are available when the defendant acted with fraud, oppression, or malice, and the statute defines fraud to include the deliberate concealment of a material fact with the intent to deprive another person of property or legal rights.7California Legislative Information. California Civil Code CIV 3294 In practical terms, a seller who knew about termite damage and hid it could end up paying far more in a lawsuit than the repairs would have cost in the first place.
California courts have also recognized claims against pest control inspectors who fail to identify infested areas, under theories of both fraud and negligent breach of contract. A buyer may have a claim against the inspector’s company in addition to any claim against the seller.
Condos, Townhomes, and HOA Properties
Termite problems in common interest developments like condos and townhomes work differently because the building’s structure is shared. California Civil Code Section 4775 sets the default: the HOA is responsible for repairing and maintaining common areas, while individual owners handle their own separate interest units.8California Legislative Information. California Civil Code 4775 For exclusive-use common areas like a patio or balcony, the owner handles day-to-day maintenance, but the HOA is responsible for repairs and replacement.
The catch is that an HOA’s governing documents can override these defaults. Many CC&Rs shift more repair responsibility to individual owners or define “common area” narrowly. Before you buy a condo, read the declaration carefully to understand who would be on the hook if termites turn up in the building’s framing. Even when the HOA is responsible for a fumigation, individual owners may still bear the cost of relocating during treatment, because Section 4775 places relocation expenses on the owner of the affected unit. For renters displaced by fumigation, the landlord generally must compensate them for reasonable costs during the displacement period, typically through prorated rent or direct reimbursement.